Posted on: Friday, June 7, 2002

Ex-Hawai'i couple ordered to pay victims

Associate Press

OMAHA, Neb. — A former Hawai'i couple has been ordered to pay $860,000 to nearly 60 victims of a nationwide telemarketing scam that the couple operated from the Islands.

James and Kim Novak had pleaded guilty to felonies related to their scam, which involved the sale of silver and gold coins over the telephone to senior citizens.

Besides paying restitution, James Novak was sentenced Tuesday to three years in prison, and Kim Novak was given five years probation and three months home imprisonment.

About $100,000 in cash and silver coins seized by the U.S. Postal Inspection Service also will be returned to the victims.

U.S. Attorney Mike Heavican said the Novaks purchased the coins for $6 to $7 and sold them for $25 to $30 apiece, promising their victims that the coins' values would increase by 20 to 30 percent within six months.

James Novak also induced sales by telling people the coins could be exchanged for cash within 48 hours, but without mentioning it would be done at a loss, court documents said.

The Novaks, both 53 and originally from Omaha, lived in a beachfront house in Hawai'i while operating the scam from 1995 to 1999. They used runners to operate the business out of Omaha. They now live in Malibu, Calif.