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Excelsior Coin Dealer Pleads Guilty to Defrauding Customers and Investors Out of $2.7 Million

David Marion owned International Rarities Corporation (IRC) and received over $2 million in coins, precious metals and money from customers who intended to purchase or exchange coins and precious metals.

From the Department of Justice and U.S. Attorney:

A 53-year-old Excelsior coin dealer pleaded guilty Thursday afternoon in federal court to devising and executing a scheme to defraud customers and investors out of $2.7 million. David Laurence Marion pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of money laundering.

Marion, who was indicted on November 14, 2012, entered his plea before United States District Court Judge Patrick J. Schiltz. In his plea agreement, Marion admitted that he owned International Rarities Corporation (“IRC”), a business that bought, sold and traded gold coins and precious metals, among other things. Marion directed his sales staff to “cold call” people from “lead” sheets in an attempt to get them to buy, sell or trade coins and precious metals. 

Related post:

Excelsior Coin Dealer Indicted in $2.7 Million Fraud Scheme

Marion also admitted that between December 2010 and August 2011, IRC received over $2 million in coins, precious metals and money from customers who intended to purchase or exchange coins and precious metals.

In August 2011, IRC purportedly had over $2 million in unfulfilled customer orders. When customers inquired about the status of their orders, Marion admitted that he and the IRC sales staff ignored them, falsely indicated that their orders were being processed or told them that their money, coins and precious metals could not be returned because they were not available.

Meanwhile, Marion used the customers’ money, coins and precious metals for gambling and his lavish lifestyle or to pay commissions and salaries, fulfill other customer orders or to support his family. Customers lost approximately $1.7 million in money, coins and precious metals as a result of this scheme.

In addition, Marion was the president of International Rarities Holdings (“IRH”), and in that capacity, he directed his sales staff to sell securities in the form of ownership shares in the company. However, at the time, Marion was not registered with the Securities and Exchange Commission (“SEC”) as a broker or dealer, nor was he associated with a registered SEC broker or dealer. In fact, in April 2009, the SEC rejected Marion’s attempt to register the IRH offering as a security yet, from at least November 2008 through July 2009, Marion and his sales staff raised approximately $1 million from at least 26 investors who believed they were purchasing ownership shares in IRH.

Marion admittedly used approximately $200,000 of those investor funds for his own personal use.       

For his crimes, Marion faces a potential maximum penalty of 20 years in federal prison for conspiracy and ten years for money laundering. Judge Schiltz will determine his sentence at a future hearing, yet to be scheduled.  

This case is the result of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation Division and the U.S. Postal Inspection Service. It is being prosecuted by Assistant U.S. Attorney Karen B. Schommer.

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