Jason Meyer and his get-rich gold scam
Bernie Butts couldn't believe his ears. But there it was, a financial opportunity he couldn't turn down: high-paying gold mines.
"My contract with gold mines guarantees 40 percent per month," Jason Meyer said on the other end of the call. "I can promise you 25 percent per month."
It was July 2009. Butts, a personal injury attorney in Miami, knew that Meyer was talking about a rare opportunity, a chance to be a winner in the worst economic slump since the Great Depression.
But the opportunity was limited, Meyer explained. He could take on only a few investors at a time. He didn't bother to explain where these gold mines were located, and Butts wasn't worried about that.
Instead, the lawyer grilled Meyer about his background.
"What is your education?" Butts wrote in an email.
"College graduate," Meyer replied. "Majored in Architecture. I was also big into real-estate investing. I owned a lot of property in Florida and Arizona."
"How did you start in the leverage business?" Butts typed.
"Got introduced to it by a friend of a friend," Meyer wrote back. "He charged me to show the ropes on how he does it."
Word of mouth through friends seemed to be the way these kinds of deals worked. Butts was introduced to Meyer through his friend Richard Oetting, an Orange County developer with a knack for uncovering opportunities and sharing them.
Meyer recommended that Butts talk to A.J. Watson, a client in Michigan who ran a private investment group. When Watson vouched for Meyer, Butts decided it was safe to invest.
At first, the deal was a lot of fun. Meyer and Butts emailed back and forth constantly, building a friendship as they pictured their future wealth. Meyer sent Butts contracts for his vodka-importing business, and as a favor Butts reviewed them.
The men haggled before finally settling on an initial contribution of $1.5 million. Meyer would pay back the start-up money after 30 days, plus $375,000 a month for nine months, for a total profit of nearly $1.9 million.
After the first payment came through, Butts doubled down with Meyer.
Then things got complicated. Meyer said he wanted to keep some of the money longer.
So the men hashed out another contract with even better terms. If Butts invested $5.5 million, he would get all of his money back, plus close to $14.3 million in profits. Butts signed on the dotted line.
Then the payouts dried up. Butts pestered Meyer constantly for his returns, but it seemed like Meyer always had a reason to stall.
Finally, the men agreed to meet in Chicago over the weekend of November 8, 2009, when the Bears played Arizona. Meyer got tickets to the game for Butts and his wife, Peg, and told them that he and his own wife, Jennifer, would be staying at the Hilton.
But when Bernie and Peg arrived in Chicago, they were chagrined to discover that Jason and Jennifer Meyer weren't exactly rooming at a four-star joint.
"They stayed at some fleabag hotel down in the middle of town," Butts says. "And Peggy says to me, 'Bernie, what is with this guy? If he's worth all this money, why doesn't he stay at the Hilton?'"
AS THE JET engines wound down and the plane taxied toward the terminal, R.J. Rice felt his anxiety rising.
It was May 2008, and Rice had started his day at home in Michigan. He'd just landed in Minnesota, and he was worried that this business trip might go badly.
Rice stepped into the bustling hallway at Minneapolis-St. Paul International Airport and followed the signs toward the rental cars. The route to downtown Minneapolis took about 30 minutes, giving him plenty of time to think about what was at stake.
He checked into the hotel, dropped off his luggage, and headed to the restaurant where he was scheduled to meet Jason Meyer.
Meyer was as confident in person as he'd sounded on the phone. He flashed a grin of even white teeth and offered a solid handshake.
Business was booming, Meyer implied. The International Tropical Timber Council, an arm of the United Nations, was still backing the deal. Soon, everyone would be richly rewarded.
As a token of his sincerity, Meyer made out checks to his investors from his business account, 3 H's Investment Properties, LLC, according to the police report. The "H" stood for "Hooligan"—Three Hooligans. If anything went awry, Meyer promised, the investors could cash their checks.
The details of the investment washed over Rice like soothing liquid. They weren't really important—what mattered was getting paid.
"We flew in because we were concerned," Rice recalls. "But everybody thought we were getting our money—at that point."
Meyer owed Rice a $370,000 payout. (Rice won't say how much he invested with Meyer because of pending legal action.) Meyer said he needed two more days. He'd make it worth Rice's while: Instead of $370,000, Meyer would pay $1 million.
"The money will be wired to your account," Meyer assured him.
Rice felt uneasy, but he agreed to the terms. He didn't have much of a choice.
Rice tried to stay calm. Meyer was an experienced businessman with a track record of success. Surely he could be trusted to keep his word.
But Rice couldn't convince himself. As he made his way to the airport to fly home, he tried to suppress his growing fears by trusting in Meyer.
"He seemed very sincere," Rice says. "You want to give people the benefit of the doubt."
MICHAEL'S RESTAURANT IN downtown Rochester emanates the kind of old-world charm that might appeal to the prestige-conscious. Just two blocks from the Mayo Clinic, the restaurant has hosted its share of visiting B-list celebrities—their photos grace the walls like endorsements.
In this swank setting in early June, Jason Meyer agreed to meet another client: Steven Michael Hooks of Woodlands, Texas. When Hooks appeared, Meyer immediately took a conciliatory tack.
"I want to make sure you're taken care of," Meyer said.
Meyer told Hooks how sorry he was for causing an inconvenience. He understood how annoying it was to have $300,000 locked up. He promised to make it up to Hooks.
Hooks, after all, had wanted to invest not in Jason Meyer, but in an Arizona apartment complex. Hooks sent his cash to Bill Watson, an attorney who handled transactions for Clarendon Development Holdings in Florida.
When Hooks traveled from Texas to Florida to pay Watson a visit, the attorney told him that he'd passed the money on to Meyer.
Hooks didn't understand—he thought the money would be safe in an escrow account. Now, he was in Rochester to collect.
As Hooks and Meyer chatted at Michael's, Meyer made out a check from his 3 Hooligans Investments account for $740,000. Hooks could cash it if Meyer didn't get him the money from the Arizona deal.
Hooks seemed placated. Satisfied, he went home to Texas and waited for payday.
R.J. RICE WAS flying again, bound for New York City. It was mid-June, weeks since his Minneapolis meeting with Meyer, and still Rice had received no payment. Not the original $370,000 promised in their deal, and definitely not the $1 million deal-sweetener for giving Meyer the two day extension.
Those days had stretched into weeks and now Rice's patience had worn thin. As his plane landed in New York he hoped—for the umpteenth time—that he wouldn't return to Michigan without his money.
But at the hotel, the scene played out much as it had in Minneapolis. Meyer made more promises that he would pay, and excuses why he couldn't just yet.
"I'm liquidating bonds," Meyer explained.
Rice boarded his flight back to Michigan with a heavy heart and a light wallet.
At the end of June, Rice flew to Minnesota, this time with backup: his wife Deidra. Cassandra Cean, a Long Island attorney, met them there. They drove from the airport straight to Rochester, where R.J. headed to a local hotel to meet Meyer for the third time.
This meeting was no more productive than the others. Meyer cried and begged R.J. not to turn him into the police.
But Deidra and Cean were already in contact with the cops.
Cean told the investigator that the Rices weren't the only investors being strung along by Meyer. She had another client in the same position.
Cean showed the cop the agreement the Rices had signed with Meyer. She pulled out receipts showing the $140,000 in wire transfers from their bank accounts to Meyer's. She explained that the International Tropical Timber Council was involved.
"Is this some kind of Ponzi scheme?" the investigator asked.
"No," Cean said. "The Rices are experienced investors."
The Rochester investigator checked Olmsted County property records and quickly came up with two hits. Meyer and his wife owned two properties in foreclosure. The investigator turned her report over the FBI.
In late 2008, six months after their Rochester meeting, Meyer finally called the Rices. He told R.J. that he felt bad about everything. He promised to pay him back.
But the money trickled in slowly, and Meyer never lived up to his promise. In mid-summer, Meyer disappeared—Rice hasn't heard from him since.
"The disturbing part is when we went for help to the authorities we didn't get any," Rice says. "We filed a report with the FBI. But nothing was ever made of it."
ON JANUARY 2, 2009, Officer Bill Verdick of the Rochester Police Department returned a call to Steven Hooks of Woodlands, Texas. Hooks had discovered that the $740,000 check Meyer had written was no good.
Hooks told Verdick his tale of woe: the botched Arizona deal that made its way through Florida and ended up with Meyer.
Meyer's phone number was on the police report filed by R.J. and Deidra Rice. Verdick hit the "on" button of his phone recorder and dialed.
Meyer answered. "I'm in Las Vegas."
The check to Hooks, Meyer said, was no good for one simple reason: Meyer had been scammed. A business associate in Vegas—one Peter L. Macari—was the real culprit. Macari had written Meyer a bad check, which caused Hooks's check to bounce too.
Macari wasn't a household name in Minnesota, but his criminal record was easy to trace. An Arizona crook, Macari had served time for felony money laundering.
Macari and his business partner had promised investors returns as high as 160 percent per month through high-yield notes, discount notes, and prime bank instruments. The partners used counterfeit securities to convince investors that the program was safe.
From 1995 to 2002, Macari and his partner swindled investors in the United States and overseas of $23 million through their fraudulent investment scheme. Finally, in 2002, the partners were sentenced to 30 to 37 months in federal prison.
In 2005, Macari was released. Sometime after that, he encountered Jason Meyer and wrote him a check for $440,000.
Now Meyer was holding a bad check from a man who'd scammed people for seven years without getting caught.
FROM THE QUIET of his suburban home in Clinton Township, Michigan, A.J. Watson—the man who told Butts that Meyer was trustworthy—built a financial empire. Cash Flow Financial, LLC was a private investment club with an air of exclusivity.
The concept was simple: Investors could pool their assets to get leveraged returns they couldn't access on their own. As long as they followed a few simple rules, it was all perfectly legal.
Watson invested the members' money with Trade LLC, a Florida trading company that promised hefty returns through short sales of stock. Initial investors in the Cash Flow club were promised returns of 10 percent monthly, and for a while the checks came rolling in.
Then Watson started making side investments, including one with Jason Meyer.
Meyer told Watson he had an extremely profitable trading program in U.S. treasuries, according to court documents. By July 2009, Watson ponied up $3.9 million of the private club's money.
Around then, the club's deal with Trade LLC unraveled: The Securities and Exchange Commission was investigating the Florida trader for operating a Ponzi scheme.
The investment with Meyer didn't turn out much better. Instead of high returns, Meyer passed the club's money on to four people in Texas, Florida, and New Jersey. The bulk of the cash—close to $3 million—went into Meyer's own accounts. The club got back just $625,000, a fraction of their investment.
In November 2009 the investment club filed a lawsuit against Meyer, accusing him of securities fraud and racketeering, crimes that can be prosecuted under the organized crime provisions of the federal RICO Act.
THE NEXT MONTH, Bernie Butts filed a lawsuit against Jason Meyer for not completing their deal.
Meyer never bothered to respond to any of the court paperwork. He never hired a lawyer—at least not one who did any work for the case. Meyer didn't even bother to show up in court, and Butts won his case by default: a $19.8 million judgment.
Butts filed a complaint with the Minnesota Attorney General's Office. He sent the court documents to the Rochester newspaper, which ultimately ignored them. He posted about the case online, filing a Rip-Off Report entry and telling his story on a special site he set up specifically to warn everyone about Meyer.
Butts collected email addresses for everyone he could find who Meyer owed. He sent them mass messages asking for help in providing information about Meyer.
But after doing this for months, Butts still didn't have his money back—not his initial investment, and definitely not the return that Meyer had promised. So he hired a Minnesota attorney to track Meyer down and force him to pay up or to go to jail.
"I think with me, he bit off more than he can chew," Butts says.
ON NOVEMBER 4, 2010, Jason Meyer came to Long Island with his attorney. For nearly a year, Meyer had avoided repeated requests to be interviewed in the case that A.J. Watson had filed against him, coming up with excuse after excuse and avoiding calls and letters. Now, finally, he would talk.
Meyer and his lawyer sat down in the small interview room. Watson's attorney, Harry Wise, directed the video technician to start rolling the tape. The stenographer fired up her shorthand machine.
Wise opened his line of questioning with a few softballs.
"What is your name, please?" he began.
"Jason Michael Meyer."
"What is your address?"
"P.O. Box 7728, Rochester, MN, 55903."
"My name is Harry Wise, I am a lawyer," Wise continued. "I represent Cash Flow Financial, LLC, in the lawsuit against you and various other defendants. Are you familiar with that lawsuit?"
"I am invoking the right to plead the Fifth Amendment," Meyer replied.
"You believe that answering the question I just asked you might lead to evidence of criminality?" Wise said.
"I plead the Fifth."
"Do you intend to plead the Fifth to every question I ask here today?"
"He does," interjected Meyer's attorney.
Wise wasn't ready to give up.
"Mr. Meyer, what is your address?" he said.
"I plead the Fifth."
"Do you own any real estate?"
"I plead the Fifth."
"Are you a high school graduate?"
"I plead the Fifth."
For more than an hour, Wise continued to ask Meyer basic questions about his business dealings in general, and with A.J. Watson. Over and over, Meyer gave his stock answer: "I plead the Fifth."
Wise was so incensed by the extremely unusual behavior, he filed a three-page letter to the judge complaining.
THE DAY BEFORE Thanksgiving, squad cars pulled up a tree-lined street in a tony neighborhood of Rochester, Minnesota. The squads stopped before an imposing two-story home. Five deputies piled out.
They'd been warned: The suspect might try to flee.
Two men flanked the back of the house and stood guard. Three approached the stoop and rang the bell. For several minutes, they waited.
Finally, an attractive blond woman cracked the front door.
"Olmsted County Sheriff's Department," a deputy announced.
They were there to arrest her husband, Jason Michael Meyer.
The woman stared at the deputies. Inside the house, her three towheaded children would have no clue why deputies wanted to take away their daddy. Meyer's wife decided she wouldn't help them, either. She refused to say where Meyer was.
So the deputies stormed past her. They swept through the house and into the master bedroom, where they found him hiding in a linen closet.
Cowering there, Meyer, with his neat goatee, clear blue eyes, and close-fitting gray T-shirt, looked more ready for a GQ photo shoot than a mug shot.
Deputies cuffed Meyer and drove him to Olmsted County Jail, where he spent his Thanksgiving holiday.
WHEN THE OLMSTED County Sheriff's deputies arrested Meyer on the day before Thanksgiving, they were acting on behalf of Bernie Butts.
Months after he'd won his lawsuit, Butts still hadn't received a cent. Meyer ignored requests from Butts's Minnesota attorney and missed a court hearing. So Judge Robert Birnbaum signed a warrant for his arrest.
In recent months, Meyer has been emailing people he's worked with in the past, attorneys who have gone to battle against him, and individuals who have lost money by investing with him. He is sending them statements saying that anything negative they ever said about him was a lie, and asking them to sign affidavits.
Recently, Meyer made a settlement offer to Butts, but the Miami attorney declined. Butts says the men are closer to reaching an agreement. Meyer is also in settlement talks with A.J. Watson's attorney.
A few weeks ago, the FBI and the IRS raided Meyer's home. Federal agents are also looking at Butts's friend Richard Oetting, the man who recommended Meyer.
Meyer agreed to two separate phone interviews, but failed to answer his phone for either one. He then declined repeated interview requests.
While Meyer wouldn't talk by phone, he was quite willing to email. In his written correspondence, Meyer assures us that everything is going according to plan.
"I won't discuss my companies, lawsuits are settled except Butts so really the only thing to discuss is him," Meyer wrote. "U don't hear Donald Trump talking about past lawsuits do U?"
Gold Scams Nationwide
Jason Meyer wasn't the only one to try to scam investors with the promise of gold-backed riches...
1. American Coin Company and Northeast Gold and Silver, Long Island, New York. Brothers Joseph, Michael, Salvatore, and Vincent Romano ran a boiler-room call center and stole $80 millionby selling supposedly valuable coins. In fact, the coins were worth only about 10 to 20 percent of what customers paid.
2. Stephanie Brown, Upper East Side of Manhattan. Brown, a rare-coin expert in Arizona, convinced a fearful 83-year-old Manhattan mom and her 56-year-old daughter that banks and mutual funds were going under and gold coins were their only hope. The pair invested $1.1 million, and Brown stole about $430,000 worth of coins she sold the women. Brown pled not guilty in state Supreme Court in Manhattan in November, and is awaiting trial.
3. David Bell, William Gary, and Gerald Gary a.k.a. Hakeem Shaheed, Kinnelon, New Jersey. The trio showed jewelry stores and pawn shops a real Canadian Gold Maple Leaf coin—worth as much as $50—and said they had more to sell. But the scheme flopped when none of the store owners wanted to buy the coins, and the men decided to try armed robberies. They were charged in September.
4. Cash4Gold, Pompano Beach, Florida. The online and 1-800 gold-buying company pays between 11 and 29 percent of the daily market price for gold, far below the typical pawn shop rate of 35 to 70 percent, according to an investigation by Consumer Reports and Rep. Anthony Weiner, D-N.Y.
5. Tom Noe, Toledo, Ohio. The millionaire coin dealer and GOP fundraiser used his political connections to get $50 million from the Ohio Bureau of Workers' Compensation for his rare-coin business. In 2006, he was convicted of 29 felony counts for stealing $13 million from the fund, and sentenced to 18 years in prison.
6. John Missitti, Flint, Michigan. Missitti and the other smooth talkers at GetMoni.com held lunchtime seminars to convince people to invest in gold and silver mines. GetMoni defrauded four people out of amounts ranging from $15,000 to $119,000 before state regulators shut them down in 2009.
7. Traveling coin buyers, Beaumont, Texas. Several companies swept through Beaumont promising the best prices on the market for gold coins. But they grossly underpaid, in one case offering $60 for an antique coin worth $10,000, according to an investigative series in the Beaumont Examiner.
8. Goldline, Santa Monica. Goldline sponsors conservative talk-show host Glenn Beck, who dedicates entire segments of his programming to claiming that gold is the only safe investment now that Barack Obama is president. Goldline sells coins at an average mark-up of 90 percent over their melt value.
9. Superior Gold Group, Santa Monica. The company allegedly sold customers coins and bullion, but never provided the gold, according to a lawsuit filed by the Los Angeles County District Attorney in December. Superior also charged prices for the coins that were significantly higher than their value, and gave misleading information about rare specialty coins.
10. Gold bar dealers, San Jose. Two men in Silicon Valley approached a 75-year-old woman last month and convinced her to withdraw $12,000 on the spot to pay for a phony gold bar. Police say this scam is a copycat that has been going on around the country.
Get the This Week's Top Stories Newsletter
Every week we collect the latest news, music and arts stories — along with film and food reviews and the best things to do this week — so that you’ll never miss City Pages' biggest stories.
- Sketchy Toby Keith's I Love This Bar and Grill empire crumbles
Sat., Oct. 17, 12:00am
Sun., Oct. 18, 12:00pm
Fri., Oct. 23, 7:00pm
Sat., Oct. 24, 7:00pm
- Anti-abortion investigators' shocking revelation: U does research
- Top 5 Hate Mails of the Week: 'I can't believe Shitty Pages...'