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ALEXANDRIA, Va. — The owner and operator of an Alexandria-based precious metals investment firm was sentenced Wednesday to four years and two months in federal prison for running a $1.5 million Ponzi scheme, the U.S. Attorney's Office for the Eastern District of Virginia announced.
Warith Deen Muhammad, 39, of McLean, was convicted by a federal jury on Feb. 4 of wire fraud and violating the Travel Act, which bars interstate travel in furtherance of unlawful activity. The sentence was handed down at the Albert V. Bryan U.S. Courthouse in Alexandria.
According to court records and evidence presented at trial, beginning in November 2021, Muhammad falsely told more than a dozen investors that if they invested with him and his business, Niagara Gold and Silver LLC, he would use their money to buy, trade and sell precious metals. He guaranteed profits of 5% to 10% and told investors they would receive their principal plus interest back, typically within 30 days, prosecutors said.
To mask the fraud, Muhammad used new investors' funds to pay prior investors, leading them to believe their investments had been "successful" and inducing them to invest more money and recruit others, according to the U.S. Attorney's Office. From November 2021 through June 2023, he used fraudulent representations to persuade more than 12 investors to send him over $1.5 million, prosecutors said.
In addition to paying earlier investors, Muhammad used investor funds to finance what prosecutors described as a lavish lifestyle. He leased high-end sports cars, including a Ferrari FF, a Bentley and a Dodge Challenger Demon. He paid hundreds of thousands of dollars to rent luxury properties and spent tens of thousands of dollars at retailers including Neiman Marcus, Tiffany's and Chanel, according to the U.S. Attorney's Office.
The FBI Washington Field Office investigated the case. Assistant U.S. Attorney Jack Morgan and former Assistant U.S. Attorney Zoe Bedell prosecuted it.
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