An Austin business owner who was convicted last year of money laundering and scheming to defraud customers out of millions of dollars was sentenced Thursday to 10 years in prison.
During his trial, federal prosecutors characterized Bullion Direct founder Charles McAllister, 49, as a con man. McAllister took his customers’ money and told them he would invest it in precious metals, when instead he spent their funds on corporate expenses, other investment activities and his own personal use, prosecutors said.
The fraud occurred from at least January 2009 through July 2015, prosecutors said.
In addition to the prison term, U.S. District Judge Lee Yeakel ordered McAllister to pay $16.2 million to over 5,800 victims of his schemes, prosecutors said. Yeakel also ordered that McAllister be placed on supervised release for three years after completing his prison term.
“Today’s sentence should send a clear message … to those who seek to lie, cheat and steal from others for their own financial gain,” FBI Special Agent in Charge Combs said. “The victims in this case trusted the defendant but he took their money and used it fraudulently and for his own personal financial gain. The FBI will vigorously pursue those who carry out these deceitful and fraudulent schemes without regard to their victims.”
A victim testified during the October trial that he never received the 80 Canadian maple platinum coins he purchased through a $97,000 wire transfer in April 2015. Another witness said he paid $12,000 for silver coins he never got.
During trial, McAllister’s attorney characterized his client as a well-meaning businessman who was undone by a series of poor decisions and ineffective employees. His attorney argued that the practice was lawful, citing the terms of service agreement that stated, “Bullion Direct may use or act as if it were the owner of the commodity held for customers.”
Prosecutors said that section of the agreement was nullified by other language in the agreement.
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