2 Lexington County gold buyers to plead guilty in national romance, cryptocurrency scam

Two Lexington County men have agreed to plead guilty in federal court in Columbia to being part of a nationwide scam featuring social media romances, cryptocurrency and misusing legitimate third-party businesses email accounts.

Kenneth Brown Jr. and Nicholas Shepard, who operate an Irmo gold and other precious metals exchange, are expected to appear in court during the last week in September to formally plead guilty to a charge of conspiracy of commit wire fraud and mail fraud, according to federal court records.

The crime carries a 20-year maximum sentence and a maximum $250,000 fine. However, maximum sentences are rarely imposed except in unusual circumstances.

The information said the romance scam victims were in California, Colorado, Georgia, West Virginia and Florida.

The alleged illegal activity in the case took place during 2021 and 2022 and involved more than $600,000, according to a federal information, or criminal charge.

Brown and Shepard operate the Golden Eagle Precious Metals Exchange, which specializes in buying and selling gold and other precious metals from customers in exchange for cash. The company’s Facebook page features photos of gold, silver and cash and offers customers the option to convert cash into cryptocurrency, according to a criminal charge in the case.

Two Lexington County attorneys who represent Brown and Shepard said their clients are, in a way, victims who innocently sought to grow their business from handling precious metals to also dealing in cryptocurrency.

“What’s uncontested by anyone is that Mr. Brown and his brother-in-law, Mr. Shepard, were groomed into this conduct by members of a well-established and large laundering network. ... Our clients were unaware of how these individuals were fleecing end users,” Brown’s attorney, Lester “Gill” Bell, wrote in an email to The State.

Bell added, “Mr. Brown was devastated when he realized the money he was converting to cryptocurrency was allegedly from victims of a romance scam. He immediately began cooperating [with authorities] and also willingly forfeited a substantial amount of assets to satisfy the majority of the restitution.”

Bell also wrote, “Mr. Brown is a legitimate businessman with a great reputation. It’s very unfortunate he fell into this web but he’s adamant about taking accountability and doing everything possible to make whole those affected by his misplaced trust.”

State Rep. Micah Caskey, R-Lexington, who represents Shepard, added in a separate email, “Both Mr. Brown and Mr. Shepherd have fully cooperated with the government throughout this ordeal. Since the first moment they became aware of this matter they have accepted responsibility and offered to help in every way they could.”

The information on file in U.S. District Court says “others known and unknown” were involved in carrying out the alleged scheme but gives no details.

The information said the scheme involved illegal transfers of hundreds of thousands of dollars to Golden Eagle from two sets of victims.

One group of victims included people in the alleged romance scam who sent their own money to Golden Eagle or money they received from businesses whose assets had been compromised and tricked into sending money from bank accounts of the first set of victims, who then transferred that money by personal or cashier’s checks to Golden Eagle, the information said.

“Golden Eagle received the checks and deposited them into its business account at Truist by defendant Kenneth J. Brown Jr.,” the information said. “Once the funds were deposited into the Truist account, the funds were transferred via wire to an account at Voyager controlled by defendant, Nicholas R. Shepard, (who) then converted the funds to cryptocurrency.”

The judge in the case is U.S. Judge Joe Anderson. Federal prosecutors in the case are Winston Holliday and Scott Matthews.

This story was originally published August 30, 2024 at 10:44 AM.