Excelsior Coin Dealer Sentenced for Defrauding Customers and Investors of More Than $3.3 Million
|U.S. Attorney’s Office August 29, 2013|
MINNEAPOLIS—Earlier today in federal court, a 53-year-old Excelsior coin dealer was sentenced for devising and executing a scheme to defraud customers and investors of more than $3.3 million. United States District Judge Patrick J. Schiltz sentenced David Laurence Marion to 60 months in prison on one count of conspiracy to commit mail and wire fraud and one count of money laundering. Marion was indicted on November 14, 2012, and pleaded guilty on February 21, 2013.
Marion owned International Rarities Corporation (IRC), a business that bought, sold, and traded gold coins and precious metals, among other things. Marion directed his sales staff to “cold call” people from “lead” sheets in an attempt to get them to buy, sell, or trade coins and precious metals.
In his plea agreement, Marion admitted that between December 2010 and August 2011, IRC received over $2 million in coins, precious metals, and money from customers who intended to make purchases or trades. In August 2011, IRC purportedly had over $2 million in unfulfilled customer orders. When customers inquired about the status of their orders, they were ignored by Marion and the IRC sales staff, or they were falsely advised that their orders were being processed or their money, coins, and precious metals could not be returned at that time. In the meantime, Marion used the customers’ money, coins, and precious metals to support his gambling and lavish lifestyle as well as to pay commissions and salaries, fulfill other customer orders, and support his family. Customers lost approximately $1.7 million in money, coins, and precious metals as a result of this scheme.
As president of International Rarities Holdings (IRH), Marion also directed his sales staff to sell securities in the form of ownership shares in the company. However, Marion was not registered with the Securities and Exchange Commission (SEC) as a broker or dealer at that time, nor was he associated with a registered SEC broker or dealer. In fact, in April 2009, the SEC rejected Marion’s attempt to register the IRH offering as a security, yet, from at least November 2008 through July 2009, Marion and his sales staff raised approximately $1 million from at least 26 investors who believed they were purchasing ownership shares in the company. Marion used approximately $200,000 of those investor funds for his own personal use.
This case was the result of an investigation by the Federal Bureau of Investigation, the U.S. Postal Inspection Service, and the Internal Revenue Service-Criminal Investigations. It was prosecuted by Assistant U.S. Attorney Karen B. Schommer.
The U.S. Attorney’s Office wants to remind people to protect themselves from securities fraud. For more information, visit http://www.stopfraud.gov/protect-securities.html.