MANHATTAN (CN) - Federal prosecutors accused Philadelphia promoter Tyrone Gilliams Jr. of running a $4 million securities and wire fraud scam in which he claimed to invest in U.S. Treasury Strips. Gilliams already faced wire fraud charges after being arrested on Oct. 5.
Gilliams, 44, the owner of TL Gilliams LLC "personally solicited $4 million from an investor for purposes of trading in United States Treasury Strips" in the summer of 2010, the U.S. Attorney's Office said. "Upon receiving the money from the investor, Gilliams misappropriated almost all of it.
"A substantial portion of the investor's money was used by Gilliams to fund a black-tie gala called the 'Joy to the World' festival, which was held at the Ritz-Carlton hotel in Philadelphia on December 18, 2010. Gilliams spent more than $1 million on that event and on promoting the 'Gatta Be Jokin Comedy Jam' in the Bahamas in December 2010. He used another $450,000 of the $4 million to refund a deposit from a prior investor. Gilliams also misappropriated approximately $1.6 million for what he claimed was a gold investment in Ghana."
Gilliams is accused of wire fraud and securities fraud. Each count is punishable by up to 20 years in prison and a fine of $5 million or twice the gross gain or loss from his offense.
Treasury strips is an acronym for Separate Trading of Registered Interest and Principal Securities. They are fixed-income securities sold at discount to face value because they do not pay interest and mature at par.
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