Top Executives Charged With Bilking Investors : Indictment: A federal grand jury accused the First American Currency principals of selling illegal futures contracts and laundering some of the money.

Four men, including two Orange County residents, were indicted late Wednesday by a federal grand jury in Los Angeles on charges of bilking hundreds of investors in a multimillion-dollar precious metals scheme and then laundering some of the money in foreign bank accounts.

Four executives at First American Currency, based in Laguna Hills, were each charged with 16 counts of mail fraud, and three of them were also indicted on charges of tax evasion, for selling what federal investigators claim were illegal futures contracts for precious metals.

Assistant U.S. Atty. Steve Bauer said Thursday that about $6 million is missing.

“This is one of the largest boiler rooms that’s been indicted in California,” he said.

Prosecutors claim customers were told their money would be used to purchase precious metals or related contracts “when in fact most of the investors’ money was diverted to the personal benefit of the defendants.” The activities are alleged to have taken place between June, 1983, and December, 1985.

Three of the four men were charged with tax offenses because, according to the indictment, they were “diverting customers’ funds through Panamanian bank accounts (so as) to purchase one defendant’s La Costa residence.” Federal officials claim the men diverted $3 million to Panama.

The indictment names First American owners Eric Bryan Kuvet, 39, of El Toro and Gilbert Traylor Jr., 47, of Carlsbad; company accountant William Carl, 48, of Mission Viejo, and Executive Vice President Lester Charles Thompson, 46, of Riverside.

Thompson was convicted in August of mail fraud and tax evasion for running two nationwide boiler room schemes, both based in Orange County. He is serving a five-year sentence. Traylor was arrested Dec. 7 in connection with Wednesday’s indictment and is being held at Metropolitan Detention Center in Los Angeles. Bauer said Carl and Kuvet are fugitives, and Kuvet is believed to be living in Israel.

Former First American salesman Philippe S. Stern of Costa Mesa was charged in a related indictment with tax evasion. Stern was arrested at his home Thursday by agents from the U.S. Postal Inspector’s office and the Internal Revenue Service.

If convicted on all charges, Kuvet and Traylor could receive up to 90 years in jail and be fined $4.2 million. Carl is facing a maximum prison sentence of 103 years and a $4.9-million fine. Thompson faces 80 years in jail and a $4-million fine.

Stern, 40, is facing a maximum penalty of 15 years in jail and a $300,000 fine.

Traylor’s attorney said his client will plead not guilty.

“We expect to go to trial,” said Deputy Public Defender Lupe Martinez. Attorneys representing the other men could not be reached for comment. Prosecutors have set a trial date of March 26.

Wednesday’s indictment claims Taylor lied to a federal judge in a prior civil proceeding in an effort to conceal the firm’s alleged scheme to funnel ill-gotten gains through bank accounts overseas.

First American was put into receivership in late 1985 after a federal judge agreed with claims by the Commodity Futures Trade Commission that the firm was selling illegal credit contracts for precious metals.

Previous disclosures by federal authorities indicated that salespeople at First American were given written instructions describing how to persuade reluctant customers to invest their money.

If a customer, for example, said he wanted to pray before making a decision, then a First American telephone salesperson was instructed to say: “Do you feel that I would be on the phone with you if the Lord felt that this was something you shouldn’t do?”

Salespeople were instructed to tell customers there was a shortage of precious metals to get them to buy right away. They were instructed to say, “If it’s available, do you want the entire 2,500” ounces of a precious metal? If the customer agreed to the order, the salesperson put the customer on hold, waited 30 seconds and then said, “Congratulations! We just bought 2,500 ounces. . . . We just made it.”

Bauer said the four men indicted this week lived in grand style.

Traylor had a Rolls-Royce and a $650,000 ocean view home in Carlsbad, while the other three men each drove Corvettes, Bauer said.