FREEHOLD – A Freehold man has been sentenced to 45 months in prison for defrauding multiple victims through a $1 million “upfront-fee” scheme, officials said.
Jerrid Douglas, 49, was convicted on October 21, 2022, of wire fraud conspiracy and four counts of wire fraud.
Two co-defendants were sentenced in June 2023 for their respective roles: Roy Johannes Gillar, 51, of Las Vegas, was sentenced to six years in prison, and Harold Mignott, 60, of Voorhees, New Jersey, was sentenced to three years in prison.
Douglas, Gillar, and Mignott, along with a fourth conspirator, agreed to defraud the owners of the victim company of about $1 million from March 2016 through June 2016.
According to officials, they fraudulently induced the two victim company owners to enter a joint venture agreement with the defendants’ New Jersey-based shell company.
“The defendants falsely represented that their company could acquire and provide a ‘standby letter of credit’ (SBLC) backed by either €1 billion in cash or highly lucrative Mexican gold bonds. An SBLC is a guarantee of payment issued by a bank on behalf of a client that is used should the client fail to fulfill a contractual commitment with a third party,” according to a press release.
Officials said the victim company wanted access to the standby letter of credit so it could purchase raw gold overseas and sell it to gold refineries. As part of the agreement, the company agreed to pay the defendants $1 million for the bank fee associated with the standby letter of credit.
The defendants covered up their scheme by making numerous verbal and written misrepresentations, including a phony letter from a major international bank saying that it was ready, willing, and able to provide a €1 billion SBLC to the defendants’ shell company.
After the victim company owners transmitted $800,000 of the $1 million, the defendants did not provide an SBLC or anything of value. Instead, they misappropriated the money for their personal use.
In addition to the prison term, Douglas was sentenced to three years of supervised release, restitution of $1.1 million, and forfeiture of $44,750.
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