A McLean man faces 30 years in prison after being convicted on charges related to his operation of a Ponzi scheme centered on the buying and selling of precious metals.
Warith Deen Muhammad, 39, was convicted in federal court on Wednesday (Feb. 4), less than four months after being arrested for his role in the scheme that netted him $1.5 million between November 2021 and June 2023.
According to federal prosecutors, Muhammad lured investors to his Alexandria-based precious metals firm Niagara Gold and Silver LLC by guaranteeing profits of 5% to 10% and repayment within 30 days.
Muhammad would use a portion of the funds invested by newcomers to pay off old investors. The rest was used “to finance his lavish lifestyle,” according to the U.S. Attorney’s Office for the Eastern District of Virginia.
“He leased high-end sports cars, including a Ferrari FF, Bentley, and Dodge Challenger Demon,” prosecutors said. “He paid hundreds of thousands of dollars to rent luxury properties, and he spent tens of thousands of dollars at retailers, including Neiman Marcus, Tiffany and Chanel, among others.”
Muhammad misled investors by “falsely representing that he had purchased precious metals … or had completed precious metal deals,” often sending photos of precious metals to investors and wrongly claiming that they had been purchased with their funds, prosecutors said.
Muhammad is scheduled to be sentenced on May 6. He faces up to 20 years in prison for wire fraud, as well as a maximum of 10 years for violating the Travel Act — a law forbidding interstate travel in furtherance of unlawful activity.
He must also surrender “any property … derived from proceeds traceable to the offense” as part of his conviction, according to court documents.
