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Dealer Pleads Guilty in Gold, Silver Scheme : Faces Maximum Sentence of 15 Years in Prison, $12,000 Fine for Fraud, Tax Evasion Counts

Times Staff Writer

A precious metals dealer who disappeared from his Newport Beach offices four years ago and resurfaced recently in West Germany pleaded guilty Thursday to federal charges linking him to a scheme that allegedly bilked investors out of millions of dollars on gold and silver purchases.

U.S. District Judge A. Andrew Hauk in Los Angeles scheduled sentencing of Kent Gordon Alexander for June 10 after accepting his pleas to two counts of mail fraud and one of income tax evasion.

Alexander, 39, faces a maximum sentence of 15 years in prison and a $12,000 fine on the three felony counts.

He was brought back to California in February to face federal charges after his real identity was discovered in Munich, where he had pleaded guilty to fraud charges while operating a videocassette business. German officials subsequently contacted the U.S. Consulate.

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False Named Used

Assistant U.S. Atty. Anita Dymant said Alexander gained entry to West Germany by obtaining a passport under a false name from the U.S. Embassy in Mexico City, shortly after he dropped out of sight in Orange County in July, 1981.

His departure, Dymant said, came about a month after FBI agents seized business records from his company, Newport Investment Management Corp., which later used the firm name NIMC Inc. The indictment returned against him also alleged that he defrauded investors through a separate company, NIMC Strategic Metals Inc., which dealt in metals stored in European warehouses.

Future Delivery Program

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The U.S. fraud and tax evasion charges stemmed from Alexander’s selling gold and silver, through NIMC, on a future delivery program. But instead of using the money he received from investors to buy corresponding amounts of the precious metals, Alexander used most of it to operate the business and for personal expenses, according to Dymant.

She said Alexander defrauded customers of NIMC Strategic Metals Inc. in a different way. Investors were supposed to receive warehouse receipts showing they owned metals stored mainly in Holland. But they never got the receipts, Dymant said, and instead, Alexander converted the metals to his own use. At the time of his 1981 departure, Alexander was on probation from a 1978 conviction for illegally intercepting radio communications from law enforcement agencies while working as a Redondo Beach private investigator.

In that case, Alexander and his wife, Cheryl, were convicted of monitoring transmissions between U.S. Drug Enforcement Adminstration agents and passing along information to a person under surveillance.

Arizona authorities also were seeking Alexander for allegedly violating state parole there on a 1975 conviction for unlawful possession of narcotics.


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