2 People Indicted on Federal Fraud Charges

A federal grand jury indicted two people, including a New York physician, Friday in a scheme to defraud Chemical Bank and Continental Coin and Jewelry Corp. in Van Nuys using interstate wire communications, the U.S. attorney’s office said.

Tracy Weatherby, of Pismo Beach, Calif., and Dr. Miles Galin were charged in Los Angeles with fraud by wire for allegedly submitting counterfeit checks totaling $500,000 to purchase Krugerrand gold coins from Continental Coin, said Assistant U.S. Atty. Brent A. Whittlesey.

The checks were purportedly drawn on Chemical Bank. Continental Coin employees discovered that they were counterfeit before delivering the coins, which retail for about $400 each.

“It was such a large amount of money, we were suspicious,” said Ken Gerston, chief executive of Continental Coin. “We looked at the checks, looked at the amount and said something’s not right.”

Galin, 64, allegedly arranged for the delivery of a package he thought to be the Krugerrands directly from the store to Weatherby, 35, who in turn allegedly took them to Galin.

Gerston praised the FBI for “all their hard work” in investigating the case, which began in December 1994.

“It’s always nice when you catch someone trying to defraud you,” he said. On average, he said, the store experiences some sort of fraud or theft of a large amount three to four times a year, usually when dealing with coins.

The maximum penalty under federal law for the charges is five years in prison, a fine of $250,000 and three years probation, Whittlesey said in a release.