A federal jury in Portland this week convicted a 78-year-old man of fraud and money laundering for his role in an Oregon-based gold mining scam that investigators said bilked $3.2 million from 140 investors.

Harry Dean Proudfoot III formed a Tigard-based company to attract investors and promised to use their money to mine two gravel pits in Ohio, according to court records and information disclosed at his trial.

In return, Proudfoot and his adult children told investors they would get a big payoff: up to 10 percent of gross revenues once the gold-mining operation started up, according to the government.

But Proudfoot and his children used the money for living expenses, cars and travel and to pay credit card bills and medical costs, federal officials said.

The jury on Wednesday found Proudfoot guilty of conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering and money laundering.

He created 3 Eagles Research and Development in 2008 and sought investors through 2012, according to a news release from the U.S. Attorney’s Office in Portland. He didn’t tell people that he had received cease-and-desist orders from Alaska and Oregon for selling unregistered securities in the past and that his son and co-defendant, Matthew Proudfoot, had filed for bankruptcy in 2010, federal officials said.

“Mr. Proudfoot and his children built a ‘house of cards’ with their false promises,” said Darrell Waldon, special agent in charge of Internal Revenue Service-Criminal Investigation. The agency investigated the case with the FBI.

Harry Proudfoot faces a maximum sentence of 20 years in prison, a $250,000 fine and three years of supervised release on each wire fraud count. He faces 10 years in prison, a $250,000 fine and three years of supervised release on each money laundering count. Sentencing is set in April before U.S. District Judge Michael H. Simon in Portland.

Matthew Proudfoot pleaded guilty to wire fraud and money laundering last year. He will be sentenced next month.

-- The Oregonian/OregonLive