Man sentenced in buried gold fraud scheme
Freeman Carl Reed was sentenced to prison for running an elaborate buried gold fraud and failing to file income tax returns. / AFP/Getty Images
GRAND RAPIDS — A former Michigan man has been sentenced to prison for failing to file income tax returns and a scheme involving the bogus recovery of gold bars supposedly buried by Japanese soldiers during World War II, federal prosecutors said Friday.
Freeman Carl Reed, 45, was sentenced to seven years and three months in prison. He said he concocted the gold fraud scheme after his direct-marketing business failed, according to the U.S. attorney’s office in Grand Rapids.
Money was solicited to recover Yamashita’s gold, reportedly hidden in the Philippines at end of the war. Investors were told their money was needed to extract it.
Investors also were told that Reed had access to gold certificates worth millions of dollars.
“Mr. Reed was not selling an investment; instead, he developed an elaborate hoax meant to enrich himself,” said Internal Revenue Service Acting Special Agent in Charge Jarod Koopman. “The prosecution and sentencing of Mr. Reed, who diverted investor’s funds for his benefit and then intentionally failed to file income tax returns, is a fundamental element in maintaining public confidence in our tax system.”
A federal jury convicted Reed in February of failing to file tax returns. Authorities said evidence showed he had not paid taxes for nearly 10 years, despite earning more than $1 million over a three-year period. His extravagant lifestyle included five luxury vehicles and an expensive home, the U.S. Attorney’s office said in a release.
Reed, formerly of St. Joseph in southwestern Michigan, pleaded guilty to the gold fraud after the tax trial.
“Reed was able to obtain $1.3 million in connection with the two schemes,” the release said. “Instead of using the investors’ money as promised, Reed admitted that he spent it on himself so that he could maintain his façade of wealth.”
He was ordered to pay $1.3 million in restitution to victims of the fraud.
Money was solicited to recover Yamashita’s gold, reportedly hidden in the Philippines at end of the war. Investors were told their money was needed to extract it.
Investors also were told that Reed had access to gold certificates worth millions of dollars.
“Mr. Reed was not selling an investment; instead, he developed an elaborate hoax meant to enrich himself,” said Internal Revenue Service Acting Special Agent in Charge Jarod Koopman. “The prosecution and sentencing of Mr. Reed, who diverted investor’s funds for his benefit and then intentionally failed to file income tax returns, is a fundamental element in maintaining public confidence in our tax system.”
A federal jury convicted Reed in February of failing to file tax returns. Authorities said evidence showed he had not paid taxes for nearly 10 years, despite earning more than $1 million over a three-year period. His extravagant lifestyle included five luxury vehicles and an expensive home, the U.S. Attorney’s office said in a release.
Reed, formerly of St. Joseph in southwestern Michigan, pleaded guilty to the gold fraud after the tax trial.
“Reed was able to obtain $1.3 million in connection with the two schemes,” the release said. “Instead of using the investors’ money as promised, Reed admitted that he spent it on himself so that he could maintain his façade of wealth.”
He was ordered to pay $1.3 million in restitution to victims of the fraud.
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