Brothers sentenced in $9M fraud
The brothers behind an Orlando gold coin Ponzi scheme were sentenced to prison Friday for their hand in defrauding more than 150 people out of more than $9.3 million.
Salvatore and Joseph Esposito, the owners of U.S. Coin Bullion, a precious metals investment firm in downtown Orlando, pleaded guilty to federal charges after an investigation by the Secret Service and Florida Attorney General’s Office. Salvatore Esposito, 47, was sentenced to a little more than seven years in prison, and Joseph Esposito, 43, to almost six years, the Department of Justice announced this week.
From 2014 to mid-2019, the brothers operated the phony gold business, convincing clients to invest, in some cases, their entire retirement savings and promising big payoffs. Customers came from at least 29 states, with some investing as much as $300,000.
The Espositos have been ordered by the court to repay the money they misappropriated from clients, but it’s unclear if that will happen, as most was lost.
Also this week, the Commodity Futures Trading Commission, the industry’s regulating agency, sued U.S. Coin Bullion and its operators demanding that the Espositos face monetary penalties and “trading and registration bans.” The CFTC has previously issued warnings to the public to beware of promises of “easy profits” from buying and investing in precious metals.
According to the plea deal the Espositos agreed to in October, the company swayed clients to buy precious metals and told them they were being stored at a depository for safekeeping. Investigators found that no such depository existed and clients’ money was not being used to buy precious metals at all, and instead spent on business expenses, paying other customers and purchasing silver for the company itself.
Only some customers ever received the silver and gold they paid for.
To disguise what they were doing, the Espositos sent customers fake account statements that made it appear the investments were not losing any money.
U.S. Coin’s clientele included Lori Ann Lewis, a legally blind resident of Orange County who in a 2018 lawsuit accused the Espositos and two of their employees of lying to persuade her to invest nearly all of the money she’d saved for retirement in precious metals. Lewis claims she was told the company would only invest a small portion of her money but instead the company took all of it. Lewis said she was made to sign contracts even though she couldn’t read them.
“The moral to the story is investing in precious metals for an average retail customer, especially coins, at the end of the day is basically a fool’s game. Because you have to hope they’re going to give you what you think you’re buying,” Lewis’ attorney Russell Forkey told the Orlando Sentinel. “It’s not even worth the risk to even get involved.”