COEUR d’ALENE — Former customers of the now-closed CoiNuts shop in Coeur d’Alene allege the owners swindled them out of hundreds of thousands of dollars.
Those customers say the owners — Kevin E. Mitchell and step-daughter Sarah M. Mitchell — used methods that were simple and twofold at the shop located at 296 W. Sunset Ave.
If a customer was selling, then CoiNuts would many times pay with non-sufficient-funds checks. If the customer was buying, they were asked to prepay and “lock in the rate,” then CoiNuts’ suppliers were supposed to deliver in about two weeks. In either case, the former customers said, the Mitchells kept the money and rarely delivered the valuables.
Additionally, the former customers said they’re frustrated the Mitchells have been able to get away with it all.
Last week, though, multiple default judgments totaling hundreds of thousands of dollars were entered in 1st District Court against the Mitchells, but it’s not clear how or if they’ll ever pay up.
In one of those default judgments, the Mitchells were ordered to pay $240,000 to Harmut Leuschner, of Hayden. Similarly, a judgment for $420,000, which includes interest, was entered for former customer Larry Brandenburg, of Coeur d’Alene.
Court documents show there were several earlier judgments filed against the Mitchells, too.
Former customer Leuschner’s attorney, Robert Romero, of Coeur d’Alene, said Friday, “I think (the judgment is) not really much help for Mr. Leuschner until we can execute on the judgment and try to recoup some of the loss he’s had (allegedly) because of (Kevin Mitchell) and his business and the way he conducted business.”
Romero added, “If we can’t execute on it, then basically it’s just a piece of paper you can hang on the wall. I really hope that Mr. Leuschner and I am able to get this money back from these people.”
Nobody answered the door at Kevin Mitchell’s home at 37593 E. Hayden Lake Road on Friday. The home is currently in foreclosure.
Coeur d’Alene attorney John Magnuson, who represents former customer Brandenburg, said Friday his client paid $470,000 for gold from CoiNuts as an investment.
To date, Kevin Mitchell, 47, never came up with $383,000 worth of the gold, Magnuson said.
“I don’t know what (Kevin Mitchell) did with all the money,” Magnuson said.
He added, “We sought the assistance of law enforcement in June, and our request hasn’t been met with any success to date.”
Coeur d’Alene Police Chief Wayne Longo couldn’t immediately be reached for comment.
So far, Magnuson said, no criminal charges are filed against the Mitchells.
He said the judgments this week are nice, but the court documents won’t be worth much more than “wallpaper” for the courthouse walls if no money or assets can be recovered for alleged victims.
The closure of CoiNuts last summer was a result of Brandenburg’s civil action.
Another judgment this week said the Mitchells must pay Don Macdonald, of Hayden Lake, a former CoiNuts customer, $21,800.
Macdonald said Friday he bought a dozen coins with a total value of more than $20,000 from CoiNuts in May of last year, but only ever received two of the coins.
“I made many, many calls to them and they always had some story” about why they couldn’t deliver the other 10 coins, Macdonald said.
Now, with the default judgment, Macdonald said, he and his lawyer will have to “find out where they’ve hidden the money.”
Macdonald said he’s still really frustrated: “Nobody is protecting the consumer, even though (the Mitchells allegedly) violated the criminal law and consumer protection act. The authorities we rely on have completely ignored it — that’s the completely shocking thing.”
He said he has given up hope the authorities will do anything now. Coeur d’Alene police did investigate, he said, and generated a “6-inch stack of police department complaints.”
He received a copy of the investigation documents. The Press requested the documents months ago but has yet to receive copies.
Macdonald said police knew of customer complaints about CoiNuts as far back as 2010.
“They neither moved against the Mitchells to close their (allegedly) fraudulent business nor alerted the citizenry so we could protect ourselves,” Macdonald said.
In one criminal case, Sarah M. Mitchell, 30, had been charged with six felonies, but the charges were dismissed in November by the Kootenai County prosecutor’s office.
Macdonald said he was told by Prosecutor Barry McHugh that there wasn’t enough evidence. McHugh couldn’t immediately be reached for comment Friday.
Macdonald said the CoiNuts owners exploit a part of the law that requires authorities to prove intent.
CoiNuts would often write checks and post-date them, he said. Later, the Mitchells allegedly would claim some unforeseen business development caused them to be short of money.
In other words, Macdonald said, the Mitchells can claim they intended to have enough money in their checking account when the checks were written, but something unexpected kept them from having enough money in their account when the customer would be cashing it.
“Therefore it was a CoiNuts-to-customer contract that went bad, and as a result (there was) no criminal intent and the only recourse for the customer is a civil lawsuit,” Macdonald said.
Macdonald provided The Press with a list of dozens of former CoiNuts customers who were allegedly swindled. He pulled the names from the investigation documents.
One of those former customers was Kevin and Lesly Ward, of Coeur d’Alene.
Lesly Ward said Friday she ended up getting her money back from CoiNuts, but it wasn’t easy.
“I don’t know who they know,” Ward said. “They never got a slap on the wrist. I didn’t have much confidence in the police department doing anything.”
Her husband Kevin Ward in August 2011 sold $5,000 worth of gold to CoiNuts and received a check for payment, but there was no money in the account when he went to cash it.
But, she said, “I’m hard to stop when somebody rips me off.”
She went to CoiNuts and demanded money for the gold, and they gave her a new check.
“I created quite a scene,” Ward said.
She found a way to monitor CoiNuts’ checking account, and when money went into it she ran to the bank and got her money. She found out several others desperate to get paid tried to do the same thing.
She believes their strategy often was to pay the person they owed money and had become the most angry.
“They knew exactly what they were doing,” she said. They would “get that immediate (angry customer) off their back.”
In an email to Coeur d’Alene police on Aug. 22, 2011, Ward wrote, “I guess I’m naive to this whole process, will this result in Kevin or Sarah being arrested for theft? If not, why not?”
Candyce S. Rohrscheib, part of the police department’s “investigative support unit,” responded, “That’s a question a bit above my pay grade. I can tell you, even in the most clear-cut of cases, things move fairly slow.”