An Eagle Rock man pleaded guilty Thursday to a federal charge stemming from a scheme involving the sale of “ancient slag,” a mining waste byproduct that supposedly contained precious metals.
Michael Godfree, 80, entered his plea via Zoom to a single mail fraud count, which carries a sentence of up to 20 years, according to the U.S. Attorney’s Office.
However, prosecutors agreed to recommend no more than 51 months imprisonment, according to Godfree’s plea deal filed in Los Angeles federal court. At sentencing on May 12, he is expected to be ordered to pay $8.4 million in restitution to victims of the scheme.
Godfree was co-founder of The Minerals Acquisition Co., a Pasadena-based outfit that offered to sell slag to “investors” 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.
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 said.
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. Prosecutors say he raked in at least $8.4 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, Godfree used the cash to pay for, among other things, sales commissions and his personal expenses, which included the purchase of luxury items.