An Eagle Rock man was arrested Tuesday on federal fraud and money laundering charges stemming from an alleged scheme involving the sale of "ancient slag," a mining waste byproduct that supposedly contained precious metals.
Michael Godfree, 77, is scheduled to be arraigned Tuesday afternoon on a seven-count indictment in Los Angeles federal court, according to the U.S. Attorney's Office.
Godfree was co-founder of The Minerals Acquisition Co., a Pasadena-based outfit that offered to sell slag to victims who were told the company possessed "proof of concept" of a method to extract precious metals from the slag, which was generated from copper mining, according to the indictment returned Friday by a federal grand jury and unsealed this morning.
TMAC sold ton-quantities of the slag with promises of refining the material and recovering precious metals, and provided buyers with supposedly attorney-certified "Certificates of Title" that purported to transfer ownership of the slag to the buyer, prosecutors allege.
According to the indictment, Godfree and TMAC did not actually own the vast majority of the slag sold; there was not a commercially viable process for extracting precious metals from the slag; and the business operation had not been endorsed by an attorney.
TMAC was dissolved in 2015, but its operations were largely taken over by Precious Metals of North America Inc., another of Godfree's companies, according to federal prosecutors, who allege that he generated at least $7 million in sales from more than 100 victims.
Rather than using the victims' money for the purchase of slag and to develop an extraction process, prosecutors allege that Godfree used the cash to pay for, among other things, sales commissions and Godfree's personal expenses, which included the purchase of luxury items.
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Godfree is charged with five counts of mail fraud and one count each of money laundering and aggravated identity theft for allegedly misusing the name of an attorney. If convicted of all counts, Godfree would face up to 112 years in federal prison, according to the U.S. Attorney's Office.
