by Staff Writer on October 7, 2011
By Matthew Goldstein
Commodities trader and hip-hop promoter Tyrone Gilliams was arrested Wednesday on charges of running a $4 million investment scam, according to a criminal complaint filed by federal prosecutors in New York.
Gilliams was the subject of a Reuters Special Report in May that detailed his activities and allegations against him by Ohio businessman, David Parlin, in a civil lawsuit.
Known for promising his investors superior returns that might make Ponzi-king Bernard Madoff blush, Gilliams was arrested in Philadelphia and is charged with one count of wire fraud.
Federal authorities allege that Parlin, working through an intermediary, placed $4 million with Gilliams to be invested in U.S. Treasury Strips, a derivative tied to Treasury bonds.
The complaint alleges that Gilliams “did, in fact, misappropriate at least $2 million of the $4 million” he received from Parlin.