‘King of Swindlers’ Gets a Stiff Sentence

A judge Monday imposed one of the toughest sentences ever handed down in a telemarketing fraud case on a former Orange County businessman whom he dubbed the “king of swindlers” for bilking investors of $12 million--much of it diverted to a subsidiary of the now-infamous Bank of Credit & Commerce International.

Gilbert Traylor Jr., 44, was sentenced in U.S. District Court in Los Angeles to 30 years in prison for his role as co-owner of First American Currency of Laguna Hills. The company solicited investors by telephone to invest in silver and other precious metals, then diverted their funds into lavish executive salaries, luxury cars and houses, hiding about a quarter of the money in the Panamanian branch of BCCI.

Luxembourg-based BCCI was shut down last summer, the focus of a worldwide investigation because of its reputation as a haven for money launderers and drug traffickers.

“This is indeed a massive fraud,” U.S. District Judge James M. Ideman said of First American Currency. “The defendant is in the first rank of people who have committed this offense.”

Ideman also sentenced former First American sales manager Lester Thompson, 47, of Riverside to 10 years in prison. Both men were ordered both to pay restitution, though the judge said he doubted whether victims of the scam would ever be reimbursed.

Federal investigators have never been able to account for more than $2.3 million of the $16 million invested with the firm--little of which was ever converted to precious metals, according to Assistant U.S. Atty. Steven M. Bauer. Instead, Traylor used it to give himself a $1-million a year salary, pay an additional salary to his wife and to buy a $650,000 oceanfront home in Carlsbad.

During the sentencing, Traylor stood stone-faced in a blue prison outfit. “I lost everything I own,” he said. But Ideman retorted, “I think you have a couple million out there waiting for you,” adding that Traylor’s penalty should serve as a deterrent to others.

At another point, Traylor’s attorney, Lupe Martinez, suggested that his client should be treated like any other American. “Any other American who steals millions, you mean,” the judge interjected.

Bauer said the company, which operated from 1983 to 1985, was one of the first in a long line of precious-metal investment scams that were prosecuted.