Michael Blodgett ran gold scams in Minnesota long before Jason Meyer

This week's cover

​Our cover story this week describes the varied schemes of Jason Meyer, a Rochester entrepreneur who promised huge returns on investments in gold mines.

Recently, Meyer was raided by the FBI and the IRS, and he's up on charges of bilking his investors out of millions of dollars. Turns out the gold mines didn't exist.

Meyer isn't the first Minnesotan to discover the shiny allure of gold--a commodity with increasing appeal to scam artists nationwide.

In the early 1990s, Michael Blodgett lived a lavish lifestyle: a home in Orono and a condo in Key Largo, two Mercedes Benzes, and a $250,000 salary for his work as president of his coin business, Wayzata-based T.G. Morgan Company.

In 1991, the Federal Trade Commission accused Blodgett of misleading customers into buying coins at up to a 200 percent mark-up. Blodgett claimed the gold coins were an effective way to preserve wealth in liquid form.

Sounds a lot like Glenn Beck's endorsement of Goldline today, doesn't it?

Blodgett settled the FTC claims by promising to be more truthful in his business dealings.

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Michael Blodgett was convicted of overpricing gold coins

​But in 1992, Blodgett's firm was forced into bankruptcy. He was accused of defrauding investors of $25 million by selling them coins at 200 or 300 percent markups. A jury found him guilty, and he was sentenced to six and a half years in prison and ordered to pay $500,000 in restitution.

From his prison cell in Duluth, Blodgett filed an avalanche of lawsuits against more than 40 people, including Joan Lancaster and Jim Gilbert, lawyers who were by that time on the Minnesota Supreme Court. In his massive filings, Blodgett proclaimed his innocence and accused others of misconduct.

He also accused his own lawyers--including Ron Meshbesher, famous for defending kidnapper and rapist Ming Sen Shiue--of a conflict of interest in handling his criminal defense.

Blodgett served five years. When he was released, he continued to proclaim his innocence.

He convinced Peter Erlinder, the William Mitchell law professor famed for representing war criminals in Rwanda, to review the 20,000 pages of documents for his case. Erlinder found enough of concern that he asked for review at the Minnesota Lawyer's Responsibility Board to take a look. But the board found no misconduct.