Broth­ers sen­tenced in $9M fraud

Orlando Sentinel - - LOCAL & STATE - By Caro­line Glenn

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.”

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