MADISON – A Baldwin man who defrauded 46 elderly clients out of more than $1 million through transactions with his coin brokerage, pleaded guilty Tuesday, Sept. 17, in federal court to mail fraud.

Jamie Smith, 51, had operated American Platinum Gold & Silver in Hudson in 2014 to 2016 before moving the brokerage to River Falls where it is known as American Independent Gold & Silver. The firm’s website still lists an address on 11th Avenue in Baldwin.

Smith defrauded people he never sent them or returned their money, according to Assistant U.S. Attorney Daniel Graber.

“He went after elderly individual," Graber said after court. "Even after the state of Minnesota issued an injunction against his engaging in fraudulent conduct there."

Through his website, Smith had clients in several states.

At Tuesday’s plea hearing, Graber detailed one of Smith’s client/victims as a 77-year-old Stockbridge, Ga., man who Smith visited in August 2015 and picked up 7,410 U.S. silver dollars. Smith told the man he was going to Dallas to appraise the coins and exchange them for Canadian silver dollars minted from 1935-67. Smith left his $200,000 check with the Georgia man as a guarantee for the coin exchange.

Smith also convinced the man to buy 1,800 Canadian silver dollars for $22,500. Smith was going to deliver the Canadian dollars to the man instead of shipping them. However, the Georgia man never received the 1,800 Canadian dollars and the $200,000 check bounced because Smith had no money in his business bank account, Graber said. The Georgia man’s loss from his dealings with Smith totaled $179,000, according to Graber.

A year later, the Georgia man filed a complaint against Smith with the Wisconsin Department of Agriculture, Trade and Consumer Protection.

In 2016, clients began to demand the return of their money or coins and Smith stalled them by lying that the money or the coins were in the mail. He then falsely promised to pay any interest, penalties or taxes they may owe on their missing assets, Graber said.

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 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

“He took the nest eggs of some of his clients,” Graber said earlier this year.’

Although Smith paid off five or six clients, it was part of a Ponzi scheme where he used money from new clients to pay off longer term ones, Garber said.

“When the music stopped, 46 people were left holding the bag,” he said.

Graber didn’t know on Tuesday how much money could be recovered from Smith to repay his victims. Several sleeves of coins were recovered from Smith’s property during the execution of a search warrant. The coins will be appraised and sold with the proceeds distributed to the victims, Graber said.

Smith also agreed to a $1.019 million asset forfeiture, which Graber said allows the government to seize and sell certain assets Smith has or will ever have in an effort to pay back his victims.

In exchange for his guilty plea, the government will recommended a reduced sentence.

Smith faces a statutory maximum penalty of 20 years in prison, However, District Judge William Conley will impose a sentence after consulting advisory guidelines which are less severe but factor in the amount of loss, number of victims, the advanced age of his victims and other relevant conduct.

Conley continued Smith’s release on standard conditions under his Dec. 11 sentencing.