L.A. Man Linked to $8.3 Million Precious Metals Scheme Sentenced to Prison

A Los Angeles man was sentenced Thursday to three years behind bars for conning investors out of $8.3 million in a scheme involving the sale of “ancient slag,” a mining waste byproduct that supposedly contained precious metals.

Michael Godfree, 80, a United Kingdom citizen who lives in the Mount Washington area, was also ordered to pay $8.3 million in restitution to victims of the scheme, according to the U.S. Attorney’s Office.

Godfree pleaded guilty last year to a single mail fraud charge.

The defendant “was nothing more than a glorified con man,” federal prosecutors wrote in a sentencing memorandum.

“At bottom, (Godfree) was selling nothing more than worthless dirt along with a non-existent `process’ to extract value from the dirt … Unsurprisingly, not a single victim-purchaser has ever seen any return on their purchase. Instead, the money was spent on lavish goods and personal expenses.”

Godfree was co-founder of The Minerals Acquisition Co., a Pasadena- based outfit that offered to sell slag to “investors” who were told the company possessed “proof of concept” of a method to extract precious metals from the slag, which was generated from copper mining, according to the indictment.

TMAC sold ton-quantities of the slag with promises of refining the material and recovering precious metals, and provided buyers with supposedly attorney-certified “Certificates of Title” that purported to transfer ownership of the slag to the buyer, prosecutors said.

According to the indictment, Godfree and TMAC did not actually own the vast majority of the slag sold; there was not a commercially viable process for extracting precious metals from the slag; and the business operation had not been endorsed by an attorney.

TMAC was dissolved in 2015, but its operations were largely taken over by Precious Metals of North America Inc., another of Godfree’s companies. Prosecutors say he raked in at least $8.3 million in sales from more than 100 victims.

Rather than using the victims’ money for the purchase of slag and to develop an extraction process, Godfree used the cash to pay for, among other things, sales commissions and his personal expenses, which included the purchase of luxury items.

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