Jai Mahtani, a Ketchikan jewelry shop proprietor and member of the Ketchikan City Council, has agreed to a settlement with the state over allegations that he twice misrepresented the authenticity of items in his Gold Rush shop to undercover investigators.

Attorneys for Mahtani and the Alaska Department of Law signed a consent judgment filed June 16 in Ketchikan Superior Court. As of June 18, it was awaiting final approval by a judge.

The consent judgment would require Mahtani to pay $10,000 to the state and subject him to a “permanent injunction designed to prevent further misrepresentations.”

Speaking with the Daily News on June 17, Mahtani said he had been in the business for 32 years, 30 of which in Ketchikan. “I’ve never had issues about fake product or misrepresented product, and things happen. … I’ll take responsibility for it and move on.”

According to a Department of Law news release and a civil complaint, Mahtani “misrepresented his products to an undercover investigator” employed by the Department of Law’s Consumer Protection Unit. One instance occurred in 2023; the other in 2025.

In the 2023 case, the state alleges that Mahtani represented a “white stone flecked with gold as being naturally occurring gold quartz” mined in Alaska.

“Mahtani even disparaged other stores which sold Chinese-made imitation gold quartz and told the investigator ‘mine is local,’” according to the press release.

The state later identified the stone “as likely being fake gold quartz.”

“When the state presented a picture of the stone to Mahtani during an investigative interview, he was readily able to identify the object as a German-made imitation of gold quartz,” said the media release.

“The issue was, a piece was issued a certificate of authenticity,” Mahtani said. “Instead of a German certificate of authenticity, the product said they’re from Upper Alaska and the Yukon region, and that got me into this sting.”

He later said “the product was in the wrong tray, and I take full responsibility for that. That happens, and we gave the person the wrong certificate of authenticity. The person turned out to be an inspector who was doing a sting against the vendor and people that use that vendor, and that's where I got caught in.”

In the 2025 circumstance, the state alleges that Mahtani greeted an undercover investigator and stated that “all our product is locally sourced.”

Asked to show the investigator “something Alaskan,” Mahtani is alleged to have directed the investigator to jewelry that he described as “Alaska’s gold and Alaska’s gold-bearing quartz,” according to the complaint, which added that Mahtani described the gold quartz as “totally Alaskan, totally locally sourced” and that he had gotten it from “Fairbanks or Anchorage.”

He sold the investigator a ring with gold nuggets and pieces of gold quartz, which Mahtani is alleged to have represented as gold nuggets from Nome and gold quartz from either Anchorage, Soldotna, the Nome area, or the Yukon and the Canadian border, according to the complaint.

“But during the state’s subsequent investigation, Mahtani admitted that none of his jewelry was locally sourced and that he does not know if he has ever sold a piece of gold bearing quartz that was mined in Alaska,” states the press release.

Speaking with the Daily News, Mahtani said he takes responsibility for the mismarked product and the state’s “misunderstanding” of what locally sourced means.

“I mean, if a vendor is going to sell me a product and get paid right in my premises, to me that’s locally sourced, and they didn’t like that,” he said. “Now I know better.”

The agreement requires Mahtani to “truthfully represent the origin of his products, and will not indicate or imply that a product is from Alaska or manufactured in Alaska, or use the words ‘Alaska,’ ’Alaskan,’ ‘local’ or ‘locally sourced,’” unless he has documentation showing that the product was made in Alaska or that the raw materials for the product are sourced from Alaska.

In a similar case earlier this month, Alaska’s acting attorney general announced a $20,000 settlement with a jewelry company that operates in Ketchikan, Juneau and has two locations in Skagway.

That settlement stems from a 2025 investigation into the sale of fake gold quartz that was advertised as genuine and originating from Alaska. Neither claim was true. The product was being sold by SAI Investments, doing business as Miner’s Gems.

Gold quartz is a milky-white gemstone with veins of gold. It’s a rare gemstone, often used in jewelry. The man-made version can be difficult to distinguish from the genuine article.

The state said that on two separate instances, Miner’s Gems employees told undercover agents that the gold quartz was found in Alaska glaciers. But the gold quartz was man-made and originated from outside the state.

In a Department of Law press release in the Mahtani case, Acting Attorney General Cori Mills said Alaska businesses that sell their products honestly should not have to compete with products sold through falsehoods, and that the many Alaska miners and artisans that actually mine or make products from Alaska’s abundant minerals should be protected.

 “We will continue to deploy undercover investigators in Southeast ports to protect consumers from deceptive sales pitches and to uphold a fair marketplace,” Mills said.

In March, the attorney general’s office reached a $60,000 settlement in a state consumer protection lawsuit against Soni Inc., a jewelry retailer that does business in Ketchikan as Flawless Fine Jewelry, and one of Soni’s corporate officers, Sunita Lakhwani.

The state alleged that in 2023, Soni employees sold man-made facsimiles of naturally occurring gold quartz and gold nuggets to undercover investigators.

“In fact, Soni Inc. had obtained these objects from a California company called TT Jewelry,” the state said. “The ‘gold nuggets’ sold to investigators were low-purity 14 karat gold shaped to resemble a gold nugget, and the objects sold to investigators as Alaskan ‘gold quartz’ were pieces of quartz which had been infused with a low-purity alloy of gold, or in one case, contained no gold whatsoever.”