Teacher Is Accused in Gold Scam : Investing: Stanley Gordon of Santa Ana High is criminally charged with defrauding 13 victims of $250,000.

A Santa Ana High School teacher has been criminally charged with defrauding 13 victims--including students, fellow teachers, retirees and disabled investors--of more than $250,000 in an alleged scheme to sell phony gold futures contracts, the district attorney’s office announced Tuesday.

Prosecutors allege that there were 25 victims in all, and the total loss was more than $700,000. However, they chose to file charges on behalf of those victims who actually had direct contact with Stanley Gordon, 54, a jewelry-making teacher for the past 22 years. The others allegedly gave their money to Gordon through third parties, including teachers and students.

Gordon is accused of offering unlicensed or fraudulent gold futures contracts. He also allegedly told victims that he could buy gold at low prices and refine it into a pure form that could be sold at market rates.

Deputy Dist. Atty. William L. Overtoom said that he has accounted for a little more than half of the total loss, although the government has recovered none of the money.

Gordon allegedly bought cars for his girlfriends, including a Jeep, and traveled repeatedly to Las Vegas, where he stayed in $4,000-a-night rooms.

During the height of an investigation into Gordon’s activities by the Newport Beach Police Department, Gordon traveled to Paris and Madrid to visit relatives, Overtoom said. Newport Beach police declared him a missing person. He left the country on March 25 and returned April 28, whereupon he surrendered his U.S. passport to Newport Beach police.

Gordon returned to teaching at the school several weeks ago. He could not be reached for comment Tuesday night.

Prosecutors say Gordon persuaded most of his victims to continually reinvest or “roll over” their earnings, even though Gordon had no way to refine gold.

Investors, many of them students in continuing-education jewelry-making classes, paid as little as $1,000 and as much as $90,000, Overtoom said.

Prosecutors allege that Gordon would tell potential investors that he could buy scrap gold for about $175 an ounce and refine it into 14-karat gold for somewhere between $350 and $400 an ounce.

When investors complained, Gordon would sometimes pay off the promised investment either in cash or gold, prosecutors said.

Gordon has taught high school arts and crafts in the Santa Ana Unified School District since 1971.

Gordon, who lives in Newport Beach, is charged with 50 criminal counts and is expected to appear for his arraignment in Orange County Superior Court on Thursday. A warrant has been issued for his arrest. If he is convicted, Gordon faces up to 12 years in prison.

Under a new state law, Gordon is liable for $12.5 million in penalties if convicted.