Tyrone Gilliams fights the law

January 14, 2013

By Matthew Goldstein

It’s been a while since we last wrote about the legal struggles of Tyrone Gilliams, the Philadelphia commodities trader/hip-hop promoter/wannabe reality show star/self-styled preacher, whom federal authorities have charged with scamming investors out of $5 million. But the University of Pennslyania graduate is making news again with the scheduled start of his Jan. 22 criminal trial in New York federal court.

Gilliams will be on trial with his former lawyer Everette Scott. Both men are charged with working together to “devise a scheme and artifice to defraud” investors out of their money that was supposed to have been invested in Treasury Strips–a derivative of U.S. Treasury bonds the separates the coupon and principal on the underlying note into different securities.

For the details of where the investors’ money allegedly went, read our earlier special report from May 2011 and this feature article from last year in Philadelphia magazine.

Federal prosecutors don’t appear to be taking the trial lightly. Just a few weeks ago, prosecutors revised the indictment against Gilliams and Everette to  spell out more details of how money that was raised to invest in Treasury Strips was largely misappropriated. In a court filing, prosecutors indicated that they could call as many as two-dozen witnesses.

Two potential witnesses include the alleged victim — David Parlin, a Cincinnati, Ohio businessman and John Taylor, who runs an investment vehicle that invested with Gilliams. Others on the witness list include people familiar with the splashy charitable gala event Gilliams held in Philadelphia, that money was allegedly diverted to. The government may also call some of the people–we reported on–who helped line up investors for Gilliams.

It’s not clear who Gilliams and Everette intend to call as witnesses. A list submitted by one of their lawyers was not made public.

All along both men have maintained they are innocent and there was no intend to deceive investors. At worst, they suggest this was simply an investment idea that didn’t pan out.

It’ s never good to predict the outcome of a criminal trial.  Juries can be fickle and sometimes a government case often looks strongest on paper but falls apart inside the courtroom.

But federal prosecutors in New York have had an impressive streak in white collar cases of late–especially in insider trading cases. In fact, one defense lawyer who recently lost a case in Manhattan federal court told me that in securities crime cases–the burden of proof seems to be squarely on the defendant now. The lawyer said maybe it’s because of the financial crisis, but juries seem to be particularly willing to accept the government view of events in financial crimes cases.

But who knows? Maybe the Gilliams trial will turn out differently and will put some tarnish on the impressive track record being run-up by Manhattan U.S. Attorney Preet Bharara.

 

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