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Baldwin man pleads innocent in federal court to wire and mail fraud counts

MADISON — A Baldwin man who allegedly took more than $1 million from clients of his coin brokerage, pleaded not guilty Thursday in federal court to multiple wire and mail fraud counts

and making a false statement to a bank.

The 23-count indictment alleged that:

Jamie Smith, 51, operated American Platinum Gold & Silver, Inc., in Hudson from 2014 to 2016

before moving the brokerage to River Falls where it is known as American Independent Gold & Silver, Inc.

The firm's website now lists an address on 11th Avenue in Baldwin.

In his alleged scheme to defraud clients, individuals sent Smith coins to appraise. He promised

not to sell them without their approval.

Instead, he sold the coins and used the proceeds for his own purposes. When clients

demanded their money or their coins back, Smith lied saying the money or the coins were in the

mail.

To further stall clients taking action against him, Smith promised to pay them interest, penalties

and any taxes they owed due to the payment extension he needed.

In December 2016, Smith informed clients that he needed two years to repay them because an

employee had embezzled from his company. Smith asked the clients not to file lawsuits or

complaints because that would force him to file bankruptcy and they would lose what he owed

them.

Clients eventually filed civil lawsuits against Smith and told authorities who contacted the FBI to

investigate Smith's businesses.

The FBI executed search warrants at Smith's house and business and a 23-count indictment

followed on Nov. 28.

Smith has paid off "five or six" clients who sought judgments against him, said his attorney

Gregory Dutch.

However, that does not clear him of the criminal allegations, Graber said.

The FBI has identified about 238 clients of Smith's who have allegedly been defrauded; their

combined losses total $1.12 million, Graber said.

In other instances, Smith offered to help elderly clients concerned about their investments in the

fluctuating stock market.

"These are elderly people who gave him their nest egg to convert to coins and he took them and

didn't gave them anything back," said Graber after Smith was arraigned Thursday.

The 11 mail fraud counts alleged use of the mail, or private accounts to steal coins from clients.

The 10 wire fraud counts allege use of communications to transfer funds from client bank accounts to his after misrepresenting how the funds would be used.

The false statement to a bank charge alleged Smith falsely included the amount of earnest

money and purchase price on a residential loan applicant to Westconsin Credit Union in

January 2016.

Each fraud conviction has maximum penalties of 20 years in prison, a $250,000 fine and

mandatory restitution.

A false statement conviction has a maximum penalty of 30 years in prison, a $1 million fine and

mandatory restitution.

The Magistrate Stephen Crocker set a June 17 trial date for the case which Graber said should take about a week.

When Crocker asked Graber about Smith's conditions of release, Graber responded," I have

grave concerns about that."

Graber said he was "horrified" that Smith wants to continue his coin brokerage.

"I hope to get some press on this," Graber told Crocker.

Smith is required to inform clients that he is under indictment for defrauding clients, Graber said.

Graber wanted a list of Smith's clients in order to verify with them that Smith is telling them of

the charges pending against him.

Graber also wanted Smith's business records because he has reported an average monthly income in excess of $7,000 but contradictory statements report a negative cash flow of $15,400.

Ryan Plender of pre-trial services told Crocker that "We're super concerned that this business is

ongoing but because he's presumed innocent we can't ask him to stop."

Besides posing a financial danger to the public, Graber said Smith poses a physical danger due to his three prior drunk driving convictions and convictions for disorderly conduct and bail

jumping.

State authorities have conducted an alcohol and drug assessment and a domestic violence

assessment of Smith, but Graber said he wanted federal pre-trial services to test Smith for

drugs and alcohol while on pre-trial release.

Crocker said "Let's not go looking for trouble," but told Smith that "If you drink, you'll be revoked

and detained until your trial."

He also cautioned Smith to make sure all his business transactions are "clean" or he'll be

revoked.