Mining company owner pleads guilty to $7M fraud

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SAN DIEGO — A financier pleaded guilty in San Diego federal court Wednesday to defrauding investors out of nearly $7 million by falsely claiming their funds would be secured by his own mining company, which was supposedly worth billions of dollars.

William Ison, 54, pleaded guilty to wire fraud conspiracy and is scheduled to be sentenced Oct. 24. He faces a maximum of five years in prison and a $250,000 fine, or twice the gross loss.

Ison admitted helping co-defendant Douglas Ellingson solicit investors for “private placement programs” through Ellingson’s company, Destiny’s Partners Ventures.

Among other things, Ison gave presentations to potential investors at seminars throughout the United States, in which he made fraudulent representations to induce individuals to invest with Ellingson, according to the government.

The false representations included the claim that investors’ funds would not be subject to risk as they were backed by Ison’s multibillion-dollar mining company, prosecutors said.

In order to mislead investors, Ison claimed that his role as president of Blue Diamond Excavation Inc., a mining excavation company based in Newport Beach, allowed him to safely secure loans with assets worth $86 billion. In fact, BDE had yet to begin mining operations or produce any income from mining, according to the U.S. Attorney’s Office.

Ison embellished his story by falsely telling investors that he had already used BDE’s assets to secure medium-term notes, or MTNs, valued at up to $2.5 billion.

The defendant went so far as to claim that individuals had committed to purchase one MTN worth $250 million as a “guaranteed exit sale” in the event capital was required to replace investor funds. In fact, Ison had not obtained any MTNs and no buyers had been secured, prosecutors said.

Ison also misled potential investors by claiming that he had been involved with incredibly successful investment programs in which he had personally made more than $100 million, according to the U.S. Attorney’s Office.

He also lied to investors by telling them he managed a consortium of large nonprofit foundations that donated more than a trillion dollars annually to various humanitarian causes, court documents show.

Ellingson previously pleaded guilty and is scheduled to be sentenced the same day as Ison.