Arnett L. Waters has been sentenced to 17 years in a federal prison for his involvement in a large Ponzi scheme that defrauded customers out of millions of dollars by selling coins at inflated prices. In addition to the prison sentence, Waters will also face three years of supervised release, as well as restitution and forfeiture in the amounts of over $9 million.
From 2007 through 2012, Arnett Waters stole roughly $839,000 from various investors by selling units in sham investment partnerships. He lulled investors into a false sense of security by telling them their investments had made large profits that would be paid out to them in the near future. Waters spent the majority of the investors’ money on personal and business expenses.
Waters also defrauded customers and obtained millions of dollars by selling coins at inflated prices between 2002 and 2012. He managed to convinced customers to purchase coins that were marked up as much as 600 percent from their actual market value. Walters also got coin purchasers to return coins to him under the false pretense that he would sell those coins on their behalf. One customer that had paid Waters over $7 million for coins, was convinced to pay Waters over $500,000 more for fees purportedly related to the sale and storage of his coins. The victim’s coins had already been sold and the proceeds had been used for Waters’ personal expenses.
Waters also engaged in criminal contempt when he maintained a secret bank account which was a violation of the asset freeze order in a civil fraud case brought against him by the SEC.
Waters, 63, pleaded guilty on October 2, 2012 to two counts of criminal contempt. He later pleaded guilty to seven counts of securities fraud, six counts of mail fraud, two counts of money laundering, and one count obstruction of justice in November.
This case is being prosecuted by Assistant United States Attorney Ryan M. DiSantis of Ortiz’s Economic Crimes Unit.
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