Miami Prosecutors Secure Guilty Plea from Precious Metals Scam Operator
Federal prosecutors recently uncovered yet another precious metals scam. On January 9th, 2015, the U.S. Attorney’s office in Miami announced a plea agreement with Christopher Anzalone, a California resident who confessed to defrauding investors out of millions of dollars with false promises of profits trading in gold, platinum and other precious metals. Anzalone faces up to 20 years in prison and a fine of $250,000 after agreeing to plead guilty to a single charge of conspiracy to commit wire fraud in connection with his scam.
United States v. Anzalone
According to a factual proffer outlining the case had Anzalone chosen to go to trial, prosecutors detailed how Anzalone and another man defrauded investors. Anzalone and his partner started Liberty International Financial Services (LIFS) as a brokerage selling precious metals. Initially, LIFS did what it promised, namely trading metals on behalf of investors. But within its first year of operation, Anzalone and his partners started using investor funds for themselves instead of trades. According to prosecutors, “[f]inancial records reflect that investors sent in several million dollars for metal trades to LIFS and that LIFS only invested around half a million dollars for these metal trades.”
As it turned out, LIFS was just the first in a series of scams operated by Anzalone and his co-conspirators. In 2012, he started a second company, Liberty International Holding Corporation, which traded in so-called “penny” stocks. Anzalone claimed LIHC was backed by millions of dollars worth of precious metals and real estate; in fact, LIHC had no precious metals and its real estate “had very little equity,” according to prosecutors. But investors believed Anzalone’s claims and invested upwards of $15 million in LIHC, most of which went “to fund a lavish lifestyle” for Anzalone.
Finally, Anzalone used a third entity, Allied Strategies, Inc., purportedly to sell valuable shares in LIHC. Once again, this was just a mechanism to defraud investors by offering them worthless assets. Prosecutors detailed how one investor was solicited to buy 650,000 shares of LIHC for $6.5 million (plus an additional 3% “transaction fee”). The investor ultimately transferred $195,000 to what he thought was an LIHC account, but in reality was a personal account for Anzalone and his partners.
Altogether, the U.S. Attorney’s Office estimates investors lost upwards of $3 million on the Allied scam, plus another $9 million through LIHC and over $3 million in the original LIFS fraud. It is not clear whether prosecutors have recovered any investor funds, and if so, whether those investors can expect any restitution. Anzalone will be formally sentenced by a federal judge in Miami in March.
Fighting for Your Interests
While prosecutors got their man, it came too late for the investors swindled out of millions by Anzalone and his associates. Criminal prosecutions are often not enough to ensure compensation for victims of these types of elaborate scams. That is why, if you have been the victim of a precious metals scam or any similar type of scheme, contact Florida securities fraud attorney Gregory Tendrich, P.A., to discuss your rights and how best to proceed.