5 Are Sentenced in Metals Scam Based in O.C.

LOS ANGELES —  Five men convicted of carrying out a nationwide fraud in a $5-million “boiler room” telephone solicitation scam, were given sentences Monday ranging from three years’ probation to five years in prison.

They were among seven men indicted on federal charges last December for fraud and a variety of tax-related offenses in connection with a $5-million telemarketing scam in which hundreds of investors were conned into purchasing phony contracts for precious metals.

Federal prosecutors alleged that the seven--two of whom were acquitted--assembled a staff of about 20 telephone sales agents working out of two Orange County offices called boiler rooms. The investors, most of them from out of state, were duped into believing that they were buying rights or options on precious metals that would increase in value, Assistant U.S. Atty. David Sklansky said. Instead, what most of the investors got were worthless documents, he said.

Authorities estimated that the fraud ring took in about $5 million during the two years the scam operated in 1985 and 1986 under the names B.N. Goldberg Associates in Laguna Hills and M.S. Sawyer & Co. in Irvine.

Sentenced Monday by U.S. District Judge A. Andrew Hauk were: Barry Neil Goldberg, of Laguna Niguel, who received a five-year prison sentence and was ordered to pay more than $22,000 in restitution; Lawrence Scott Hartmann, of Huntington Beach, who received three years’ probation and was ordered to pay back $7,000 to victims; Matthew E. Lothian, of Newport Beach, who received a one-year sentence; Lester Charles Thompson, of Riverside, who got five years in prison; and Mark Steven Ott, of Sunrise, Fla., who received three years in prison.

Lothian, Thompson and Ott were all ordered to pay $300,000 in restitution.

Two other defendants--Merlin B. Riley, of Mission Viejo, and Gary J. Kummer, of Laguna Hills, were acquitted.