Four men, including three from New Jersey, are accused of defrauding a commodities trading business out of $800,000 in what they initially pitched as a possible joint venture to buy and sell Mexican gold.
Harold Mignott, 54, of Voorhees, James Adkins, 64, of Hillside, Jerrid Douglas, 43, of Freehold, and Roy Johannes Gillar, 44, of Las Vegas, are each charged with one count of wire fraud.
The men falsely stated their company could provide a "standby letter of credit" from a major international banks backed by Mexican gold bonds so the victims' company could purchase gold oversees and sell it to gold refineries, authorities said.
The letter is a guarantee of payment issued by a bank should a client fail to fulfill its contract.
The victims of what authorities described as an "advance fee" scheme never received the letter.
Douglas was a long-time friend of one of the victims, according to the criminal complaint.
The conspirators used the money to buy luxury cars, high-end watches and make mortgage payments on their homes.
All four men charged are either owners or high-ranking officials of the following companies: Grupo Munidal Baloboa, an investment holding company in Panama City, Panama; Brilliant Petroleum Comany of Voorhees; All Bloom Trading Limited of Hong Kong and Gillar Worldwide Group Limited.
While Gillar was held, the other three men charged were released on $200,000 bond following an appearance in federal court in Newark on Wednesday.
The two victims are residents of Matawan and Watchung, court papers say.
The Associated Press contributed to this report.