Monmouth County Man Sentenced to 45 Months in Prison for Role in $1 Million ‘Upfront-Fee’ Scheme

NEWARK, N.J. – A Monmouth County, New Jersey, man was sentenced today to 45 months in prison for his role in defrauding multiple victims through a $1 million “upfront-fee” scheme, U.S. Attorney Philip R. Sellinger announced.

Jerrid Douglas, 49, of Freehold, New Jersey, was convicted on Oct. 21, 2022, of wire fraud conspiracy and four counts of wire fraud following a five-week jury trial before U.S. District Judge John Michael Vazquez, who imposed the sentence today in Newark federal court. Two co-defendants were sentenced in June 2023 for their respective roles: Roy Johannes Gillar, 51, of Las Vegas, was sentenced to six years in prison, and Harold Mignott, 60, of Voorhees, New Jersey, was sentenced to three years in prison.

According to documents in this case and evidence at trial:

From March 2016 through June 2016, Douglas, Gillar, and Mignott, along with a fourth conspirator, agreed to defraud the owners of the victim company of approximately $1 million. The defendants fraudulently induced the two victim company owners to enter a joint venture agreement with the defendants’ New Jersey-based shell company. The defendants falsely represented that their company could acquire and provide a “standby letter of credit” (SBLC) backed by either €1 billion in cash or highly lucrative Mexican gold bonds. An SBLC is a guarantee of payment issued by a bank on behalf of a client that is used should the client fail to fulfill a contractual commitment with a third party.

The victim company wanted access to the standby letter of credit so it could purchase raw gold overseas and sell it to gold refineries. As part of the joint venture agreement, the company agreed to pay the defendants $1 million for the bank fee associated with the standby letter of credit.

In order to cover up the scheme and convince the victims to approve the transfer of the funds, the defendants made numerous verbal and written misrepresentations, including providing the victims with a phony letter from a major international bank saying that it was ready, willing, and able to provide a €1 billion SBLC to the defendants’ shell company.

However, after the victim company owners transmitted $800,000 of the $1 million to the defendants, the defendants failed to provide an SBLC or anything of value. Instead, the defendants misappropriated the money for their personal use.

In addition to the prison term, Judge Vazquez sentenced Douglas to three years of supervised release, restitution of $1.1 million, and forfeiture of $44,750.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the sentencing.

The government is represented by Assistant U.S. Attorneys Jason S. Gould and Joshua L. Haber of the U.S. Attorney’s Office Criminal Division in Newark.