Idaho coin shop owner sentenced

People who feel they were swindled by a North Idaho coin shop that took their payments for gold and silver but failed to deliver the goods finally got their day in court Thursday.

Before the shop’s owner was sentenced to jail time, the victims spoke of how they had trusted CoiNuts with their savings – retirement funds, investments for their children – and were left wondering if they’d ever see any of the money again.

Delia Beck, of Blanchard, Idaho, said she and her husband gave Kevin E. Mitchell a check for $20,000 for three gold coins and 500 ounces of silver in December 2011. They expected to get their precious metals within weeks but never received anything before Mitchell closed his strip mall store in July 2012.

“Kevin, you are disguised as a harmless sheep, but you really are a wolf that tore us all apart,” Beck told him from the witness stand.

Mitchell, 49, was sentenced to six months in jail for six counts of petty theft in a plea deal that spared him going to trial on felony charges of grand theft. He entered an Alford plea to the misdemeanors – not admitting guilt but acknowledging he could be convicted by a jury.

First District Judge Fred Gibler also sentenced Mitchell to four years of supervised probation and ordered him to pay his victims what they are owed. That includes $80,952 to four victims, with the amounts still to be determined for the other two.

Mitchell’s stepdaughter, who helped run the shop, received a suspended jail sentence for her Alford plea to one count of petty theft. Gibler gave Sarah M. Mitchell, 32, two years of probation and 240 hours of community service, and ordered her to repay more than $100,928 to five victims.

Lori-Ann Tierney, a Dalton Gardens resident who paid the Mitchells $18,025 for gold she never got, said the punishments were not what she had hoped for but were probably the best the victims could get.

“And it is certainly better than them being able to walk away with no consequences,” Tierney said.

Earlier, she testified about the stress and anguish her family endured from losing the money, which Tierney had pulled out of a retirement account when she and her husband were expecting another child.

“Our marriage has suffered greatly as a result,” she said.

Michael Haenke, of Coeur d’Alene, gave CoiNuts $50,000 for gold and silver in May 2012. He said he wanted to invest the money for the benefit of his two daughters, who have disabilities.

“That money was going to be for their future,” he said.

Haenke also sued Mitchell and received a civil judgment covering his losses, but has yet to be paid.

Hartmut Leuschner, of Hayden, walked into CoiNuts early in 2012 and handed Sarah Mitchell a check for $103,000 for 60 gold coins. Instead of receiving the gold within two or three weeks, as she had told him, he got only 15 of the coins over the course of several months. He is still owed almost $78,000.

“That was money for my retirement, security. That’s what you buy gold for, you know, it’s insurance,” Leuschner said.

Kootenai County Prosecuting Attorney Barry McHugh said Mitchell misled his customers and strung them along with “lie after lie.”

“It was his conscious choice and his business plan to deceive these people,” McHugh said.

Mitchell’s attorney, Linda Payne, asked the judge not to impose any jail time. She said Mitchell has a new business – growing basil using hydroponics for sale to restaurants in Coeur d’Alene and Spokane. Also, he lost his house through foreclosure and now lives with his family in a large barn with no shower or kitchen, Payne said.

Kevin Mitchell told the judge he completed millions of dollars in transactions each year and was trying to fill orders as fast as he could in 2012, but that he was forced to close his store because of a business expansion dispute with an investor, Larry Brandenburg of Coeur d’Alene.

“When the store closed, my business in effect was over, my reputation in this town was shot, whether I was guilty or not,” he said.

Mitchell did not apologize or express remorse. “I did not intend to not fulfill any of their orders,” he said.

Gibler said Mitchell’s disagreement with Brandenburg doesn’t explain all of the instances of customers not receiving their metals or refunds on their orders.

“Everyone stated they went back in to see you Mr. Mitchell on a number of occasions, and for the most part you refused to talk to them … and that is not the way a legitimate businessman conducts his business,” the judge said.