Judge Throws the Book at Head of Gold Scam: 25 Years in Prison

Times Staff Writer

The patriarch of a family of precious metals swindlers that once operated in Los Angeles and Orange counties was sentenced Monday to 25 years in federal prison, a punishment law enforcement experts called one of the stiffest in the country for telemarketing fraud.

U.S. District Judge James M. Ideman of Los Angeles also ordered Joel Fisch, 58, to pay $8.7 million in restitution to his victims. Fisch had pleaded guilty to cheating 1,600 investors out of $8.7 million.

Some of Fisch’s victims lost as much as $100,000 in a four-year investment scam that spanned two continents and nine cities, including El Toro, Newport Beach and Los Angeles.

“I think this is the longest sentence for a fraudulent telemarketing case in the Central District of California and one of the toughest federal sentences (for telemarketing) nationwide ever,” said Terree Bowers, major fraud division head for the U.S. Attorney’s office in Los Angeles.


Ideman’s intent, Bowers said, was to ensure that “boiler room operators in Los Angeles and Orange County will eventually get the message that if they continue with their fraudulent activities, they may end up going to jail for a very long period of time.”

In the past 14 months, federal judges in Los Angeles have been noticeably tougher, sentencing five boiler room operators to 20 years in prison and at least 10 to prison terms of 10 to 18 years, Bowers said.

This sentencing sweep, judicial and law enforcement experts say, is meant to clamp down on the local telemarketing schemes that dupe unwitting investors out of hundreds of millions of dollars annually and make the Orange County-Los Angeles County area the so-called boiler room capital of the country.

According to William M. Rhodes, research director of the U.S. Sentencing Commission in Washington, the average sentence handed down nationally for mail or wire fraud of Fisch’s proportions is currently 5 to 10 years.


Rhodes called the Fisch sentence “pretty darn stiff,” and said that his 1985 database--the most recent statistics available--show no sentence greater than 20 years for a similar crime.

The only stiffer sentence for telemarketing that law enforcement experts could recall Monday was Gary Fox’s penalty for running United Precious Metals, a Ft. Lauderdale, Fla., precious-metals scheme that bilked investors out of $11 million. Fox was convicted last year in a state court on 95 counts ranging from grand theft to racketeering and sentenced to 585 years in prison.

Just last week John Peter Galanis, one of the country’s top white-collar criminals, was sentenced to 27 years in prison after conviction on 44 charges including racketeering. Galanis, 45, was sentenced in federal court in White Plains, N.Y.

He was convicted, along with 14 compatriots, for bribery, fraud and illegal takeovers involving financial institutions and mutual funds in New York, Utah, Connecticut and California.

Fisch and his five accomplices, including wife, Joan, and 26-year-old son, Todd, “gorged themselves on (their) victims’ hard-earned savings in a lust for limousines, yachts and penthouses,” said Leon W. Weidman, assistant U.S. attorney.

The Maximum Possible

Alvin E. Entin, Joel Fisch’s attorney, could not be reached for comment.

Ideman’s sentence was the maximum possible for the crimes to which Fisch pleaded guilty in 1987: four counts of mail fraud and one count of defrauding the Internal Revenue Service. In the plea agreement, Weidman said, he recommended that Fisch be sentenced to 10 years in prison.


After Todd Fisch was sentenced last March to 20 years in prison for his lesser role in the family scheme, Joel Fisch attempted to withdraw his guilty plea and face trial instead. Ideman ruled last June that Fisch could not change his plea.

According to Weidman, Fisch operated boiler rooms in El Toro and Los Angeles under the name First Trading Group from 1982 to February, 1984. Through First Trading, Fisch purported to sell precious-metals futures contracts over the telephone to the public.

Instead, they pocketed their victims’ savings and fled to Vancouver, British Columbia, soon after the California Department of Corporations began investigating their operations. First Trading continued to operate in Vancouver until May, 1984, and took in about $7.3 million in its two years of operation.

The Fischs’ next stop was Bellevue, Wash. There--and through a sister office in Newport Beach--they sold fraudulent oil well partnerships, Weidman said, until late 1984, when local authorities began to investigate again. The oil well scheme netted more than $170,000.

On to Miami, where Fisch and his colleagues opened Suisse-Atlantic Corp. In this scheme, the defendant purported to sell foreign currency and operated mail drops and telephone exchanges in Boston, Washington and Paris.

Suisse-Atlantic came to an end $1.1 million and two years later with the arrests of Joel Fisch; Joan Fisch; Todd Fisch; Danny Hochstein, San Francisco; Richard Tommasi, Miami, and Michael Wallach, Miami.

Hochstein and Joan Fisch were sentenced earlier to probation. Tommasi and Wallach were given six months in prison.