A federal jury has convicted a McLean, Virginia, man who operated an Alexandria-based precious metals investment business, finding him guilty of a $1.5 million Ponzi scheme that targeted more than a dozen investors, federal prosecutors announced Wednesday.
The defendant, Warith Deen Muhammad, 39, was found guilty at trial of wire fraud and violating the Travel Act, the U.S. Attorney’s Office for the Eastern District of Virginia said.
Prosecutors said Muhammad owned and operated Niagara Gold and Silver LLC, and told investors their money would be used to buy, trade, and sell precious metals. He promised returns of 5% to 10% and said investors would receive their principal plus interest back, typically within 30 days.
Instead, prosecutors said Muhammad took money from new investors and used it to pay earlier investors, a hallmark of a Ponzi scheme. Those payments made the investments appear successful, prosecutors said, encouraging victims to invest more and recruit others.
According to court records cited by prosecutors, the scheme ran from November 2021 through June 2023. During that period, more than a dozen investors sent Muhammad more than $1.5 million based on what prosecutors described as false promises.
Federal officials said Muhammad also used investor funds to finance a lavish lifestyle. Prosecutors said he leased a Ferrari FF, a Bentley, and a Dodge Challenger Demon, and spent money on luxury rentals and high-end purchases, including items from Neiman Marcus, Tiffany’s, and Chanel.
Muhammad is scheduled to be sentenced May 6. He faces up to 20 years in prison on a wire fraud count and up to 10 years on a Travel Act violation. A federal judge will decide the sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
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