Resident Of Spain Pleads Guilty In Manhattan Federal Court To $16 Million Investment Fraud Scheme
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that ANTHONIE R. SPARROW pled guilty for his role in perpetrating a $16 million investment scheme that victimized hundreds of investors around the world. SPARROW, who was charged in December 2009 and extradited from Spain in August 2013, pled guilty today in Manhattan federal court before U.S. Magistrate Judge Debra Freeman.
Manhattan U.S. Attorney Preet Bharara said: “Anthonie Sparrow engaged in a flagrant fraud, stealing millions of dollars from hundreds of innocent victims around the world, and then fled to Spain to try to avoid the consequences of his crime. His prosecution, possible only through an extradition from Spain, shows this Office’s resolve in holding accountable those who victimize innocent investors.”
Assistant Director-in-Charge George Venizelos said: “Sparrow minted his own destiny by lying to investors and cheating them out of millions of dollars. When the game was up, Sparrow fled to Spain where he thought he was beyond the reach of the FBI. Today, Sparrow finds himself guilty as charged, agreeing to forfeit all 16 million dollars made in his illicit scheme.”
According to the allegations contained in the Indictment and statements made at court proceedings:
From 2002 to January 2005, SPARROW and co-defendant Masroor A. Khan (“Khan”) orchestrated and carried out an extensive fraudulent coin investment scheme. The defendants solicited victims to invest in rare, collectible coins through Lloyd’s & Associates Asset Management Ltd. (“LAM”), a purported collectible coin and precious metal business run by SPARROW. The victims were directed to wire funds – purportedly for investments in rare coins – to LAM bank accounts in New York that SPARROW controlled. Khan and SPARROW told the victims that these funds would be used to purchase coins and that the coins would then be held at Pinnacle Depository Service (“Pinnacle”), a purported coin depository and secure storage area, which was also run by SPARROW.
However, rather than purchase coins with the victims’ funds as the defendants had promised, SPARROW simply diverted the vast majority of the money, totaling approximately $16 million, to a bank account in Cyprus controlled by LAM. To prevent the victims from discovering the theft of their investments, SPARROW maintained a website where victims were given false information about the value of the coins they supposedly owned. SPARROW deliberately discouraged victims from coming to view their coins in person and, when certain victims insisted on doing so, he staged elaborate ruses to prevent them from seeing more than a few coins.
Beginning in late 2004, victims began to demand the return of their funds. In response, in January 2005, SPARROW closed the New York office of LAM and fled to Spain.
SPARROW, 53, of Estepona, Spain, pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud. He faces a maximum sentence of 20 years in prison on each count. SPARROW is scheduled to be sentenced by Judge Robert W. Sweet on June 2, 2014, at 4:00 p.m. As part of his guilty plea, SPARROW also agreed to forfeit $16 million to the United States. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Khan remains a fugitive from the charges contained in the Indictment.
Mr. Bharara praised the outstanding investigative work of the FBI. He also thanked the Spanish National Police for their assistance in the arrest and extradition of SPARROW.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorney Alexander J. Wilson is in charge of the prosecution.
The pending charges against Khan are merely accusations, and he is presumed innocent unless and until proven guilty.