Local Investment Advisor Sentenced in Multi-Million Dollar Fraud Scheme

ST. LOUIS, MO—Don C. Weir was sentenced to 78 months in prison for defrauding his investors of more than $10 million by selling their assets to fund his life style, Acting United States Attorney Michael W. Reap announced today.  In addition to his prison sentence, he was ordered to pay restitution of $12,112,058.

"It is a tragedy that in these economic times, the victims trusted Mr. Weir with their life savings," said John V. Gillies, Special Agent in Charge of the FBI in St. Louis. "The FBI, along with our law enforcement partners, will continue to aggressively pursue corporate executives who abuse their positions of trust for personal gain."

"While this sentencing brings a certain measure of justice to the victims, the Postal Inspection Service will continue to seek assets for forfeiture in an attempt to make them financially whole," said J.R. Ball, Assistant Inspector in Charge for the St. Louis Field Office of the Postal Inspection Service.

At various times Weir was an investment advisor and a principle for Longrow Holdings, Inc.; HFI Securities, Inc.; Huntleigh Capital Management and Huntleigh Financial Services. Weir advised clients to purchase stocks, bonds, mutual funds, annuities and other securities, and was paid a commission for the security purchases he made on their behalf.  In some instances Weir was paid a management fee based upon the assets he held under management for a particular client.

In 1999, Weir recommended to a number of his clients that they invest in gold coins, paper currency and other precious metals.  Many of his clients followed Weir’s advice and authorized Weir to purchase a variety of these items for their accounts.  After the purchases were made, the items were either held by Weir in the basement of his residence in Chesterfield, Missouri, or by Pacific-Atlantic Coin located in Los Angeles, California.  Pacific-Atlantic later merged with Panda-America and continued to be located in the Los Angeles area.  Additional coins, currency and precious metals belonging to Weir’s clients were also located in his office at HFI Securities in St. Louis.  A few clients held their items themselves.

In 2000 and continuing until September 11, 2008, Weir sold his clients’ precious metals, currency and coins without their authorization.  Weir hid these unauthorized sales by mailing fraudulent statements to the clients that represented that he still held their items and that their investments had appreciated in value.

Weir used the proceeds of the sales to fund his lifestyle and paid his five childrens' tuition to Westminister Christian Academy High School and their respective college tuitions.  Weir also spent a portion of the money to make improvements to his residence, which included the installation of a  pool and kitchen improvements, and to fund various missionary trips. Weir also spent  sums of money on Korean War collectibles, baseball cards and other memorabilia, and made significant contributions to a variety of charities.  Finally, Weir also used significant sums of money from the sales to make loans to HFI Securities, which was a failing business.

In total, Weir made purchases of coins, currency and other precious metals on behalf of 44 separate clients and entities.  Less authorized sales made on the clients’ behalf, these purchases should have resulted in holdings valued at approximately $13,715,219. Weir has surrendered approximately $3,333,274 in coins, currency and precious metals to the FBI.

DON C. WEIR, Chesterfield, Missouri, pleaded guilty in February to one felony count of mail fraud and agreed to a money judgment in the amount of $13,715,219 representing property derived from the illegal activity. Items subject to forfeiture are personal property consisting of coins and paper currency.

Reap commended the work performed on the case by Federal Bureau of Investigation, the Postal Inspection Service and Assistant United States Attorney Matthew Schelp, who handled the case for the U.S. Attorney's Office.