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A McLean man faces up to 30 years in prison after a federal jury convicted him of running a $1.5 million Ponzi scheme through an Alexandria precious-metals business.
Warith Deen Muhammad, 39, was convicted Wednesday, Feb. 4, less than four months after his arrest. Prosecutors said the scheme operated from November 2021 through June 2023.
Muhammad attracted investors to Niagara Gold and Silver LLC by promising returns of 5% to 10% and repayment within 30 days. Instead of using all the money to buy and sell precious metals, he used funds from newer investors to repay earlier participants.
Prosecutors said Muhammad spent the remaining money on an extravagant lifestyle. He leased high-end vehicles, including a Ferrari FF, Bentley and Dodge Challenger Demon, paid hundreds of thousands of dollars to rent luxury properties and spent tens of thousands at retailers such as Neiman Marcus, Tiffany and Chanel.
Muhammad also falsely told investors that he had purchased precious metals or completed deals on their behalf. In some cases, prosecutors said, he sent investors photographs of precious metals and claimed they had been bought with their money.
His sentencing is scheduled for May 6. He faces a maximum of 20 years in prison for wire fraud and up to 10 years for violating the Travel Act, which prohibits interstate travel in support of unlawful activity.
Court documents also require Muhammad to surrender property derived from proceeds traceable to the offenses.