CONVICTED PENNSYLVANIA (USA) FRAUDSTER’S 10 YEARS PRISON SENTENCE IS UPHELD, appeal rejected
|TYRONE L GILLIAMS|
|Register Number: 67798-066|
|Located at: Yazoo City Low FCI|
|Release Date: 11/14/2022 <<<<==============|
Law360, New York (August 25, 2017, 7:44 PM EDT) — A New York federal judge on Friday denied a request to undo a 10-year prison sentence she had doled out to a Philadelphia businessman who was convicted of several investor fraud schemes that raked in $5.45 million and bankrolled a Sean “Diddy” Combs concert at a luxury hotel.
Tyrone Gilliams Jr., who was convicted in 2013 of securities fraud and wire fraud and whose pro se appeal to the Second Circuit failed in December 2015, challenged his sentence on six separate grounds, all of which U.S. Federal judge denied.
BACKGROUND: Tyrone Gilliams – Ivy League Scam Artist
Tyrone L. Gilliams Jr.
In December 2010, a tall, puffy 40-something ex-Penn basketball player named Tyrone L. Gilliams Jr. announced that it was time for him—for all of us—to “give back.”
He did this through a slickly produced five-minute video that identified him as a “mogul,” “philanthropist” and “self-starter” and rotated him through four different wardrobe changes, including one topped by a white wool hat and scarf and another accented by a bright orange hoodie vest. But Gilliams seemed most comfortable in a stylish gray suit with a French-cuffed white shirt and red tie, a look accessorized with a pile of bundled $20 bills.
“This,” he proclaimed, “is what we’re giving back.”
The video was to announce the “Joy to the World Fest,” a series of high-profile events around the city due to take place in mere days. There would be a food giveaway for 5,000 needy people, a children’s spectacular at the Convention Center, a gospel concert, a star-studded bowling party at North Bowl in Northern Liberties with a Ciroc Vodka bar open until 2 a.m., and an album-release party with Oscar- and Grammy-winner Jamie Foxx.
But the main event would be a fund-raising gala the Saturday night before Christmas at the Ritz-Carlton, with tickets ranging from $250 to $1,200. “And it’s not just a black-tie gala,” Gilliams declared in yet another outfit, “it’s red-carpet.” Rap superstar Sean “Diddy” Combs would headline; Kim Kardashian was coming.
Amazingly, everything came off pretty much without a hitch. Kardashian bailed, replaced by a Real Housewife of Atlanta, Sheree. But a who’s who of black Philadelphia showed up at the events: Eagle DeSean Jackson, basketball legend Sonny Hill, State Senator Anthony Hardy Williams, Congressman Chaka Fattah and his wife, glamorous TV anchor Renee Chenault-Fattah. Diddy was late to the gala, but his tardiness was quickly forgotten when he grabbed the mic and began talking about his old pal “Fly Ty Gilliams.” (Pals, yes, though not close enough for Diddy to waive his standard five-figure appearance fee.)
“Fly Ty took my girl back in ’94, and now he’s givin’ back to the community,” Diddy announced. “This is my nigger, he’s one of my brothers, give him some applause y’all, Tyrone Gilliams, he’s my man Tyrone.” The two embraced, then raised their clasped hands together awkwardly.
It was an auspicious debut on the philanthropic scene for Gilliams, the son of a well-regarded local clergyman and an ordained minister himself. “It was as much a coming-out party for him as it was an event for everyone else,” says a Philadelphia society writer who covered the affair. “It was like a hip-hop Academy Ball.”
Afterward, it appeared that Tyrone Gilliams might be on his way to fulfilling the rather lofty promise in his website bio, which portrayed him as the second coming of, among others, Andrew Carnegie, George Steinbrenner, Walter Annenberg and Kenny Gamble. The fact that nobody quite knew where he had been for the past 20 years, or exactly how he had made all his money, seemed almost immaterial.
Until the following April, when his name surfaced at the very end of a Reuters wire-service story about the FBI’s pursuit of unusual financial fraud cases in the aftermath of the Bernie Madoff scandal. As the feds have pulled at the threads of Gilliams’s patchwork financial world in the year since, they’ve uncovered a bizarre tale of financial intrigue and emotional bankruptcy, centered on a man who they claim bilked people across the country out of millions and then spent their money to enhance his own lifestyle and image—like the $1.3 million he “gave back” for the Joy to the World Fest. It’s a still-unfolding mystery that includes the alleged defrauding of an unsuspecting millionaire philanthropist in Cincinnati; an aging Greek national with a questionable account at JPMorgan; a handful of screaming New York civil litigators; and a crusading Wall Street prosecutor recently profiled on the cover of Time magazine, whose office set out to connect the absurdly disparate dots. It’s a story that stretches from brokers in New York and Palm Beach to a medicinal marijuana farm in Denver to a gold mine in Ghana to, finally, the attractive Art Museum-area house that Tyrone Gilliams shares with his two young kids and their mother. He was arrested last October, and is now charged with masterminding a $5 million Ponzi scheme that could land him in prison for years. He has pleaded not guilty, but the brazenness of the purported scheme has left many of the principals breathless. “In all my years of practicing law, I’ve never seen anything like this,” says one attorney involved in the case. “Most scam artists, they take your money and then they steal off into the jungle. But we’re starting to see more cases like Gilliams’s, where the crooks just stand there and say, ‘Come get me.’”
A former friend says that over the past few years, he saw Gilliams becoming delusional, “addicted to attention” and obsessed with the success of others, especially those in the music business. He wondered where it would end. He says people have no idea just how deep the twisted psychology of Tyrone Gilliams really goes. He’s even heard people suggest Gilliams is some kind of hero.
“They talk about Ty,” he says, shaking his head in disbelief, “like he’s the black Robin Hood.”
It’s 10:37 on an absurdly hot Monday morning in New York, and I’m sitting in a 24th-floor federal courtroom, waiting for Tyrone Gilliams Jr.
It’s April 23rd, and everyone else has been here since just past 10, including Gilliams’s new Center City attorney, pugnacious Todd Henry, and his previous attorney, Everette L. Scott Jr.—who, to his own horror and embarrassment, was recently sucked into the Gilliams whirlpool as a co-defendant.
A 50-year-old former Howard University football player and Widener Law grad who represents several NFL players, Scott practices in South Jersey but first took on Gilliams as a client in 2009, when he was trying to build a sports law practice at prestigious Spector Gadon & Rosen near Rittenhouse Square. Scott was indicted a few months after Gilliams, in late January; the $5 million allegedly stolen was originally sent to Scott’s escrow account. While Scott stands and sits proudly broad-shouldered, he has been devastated by the case. In our occasional email correspondence, he has assiduously refused to talk in any detail about it, even as he’s let me know just how crushing the ordeal has been. He declared personal bankruptcy in January, and has had health problems. The relationship he entered into after being named one of the Daily News’s “Sexy Singles” in 2010, he says, has been put to the test. He has vigorously maintained his innocence.
Gilliams, on the other hand, has all but vanished from public view. I’d been hounding him for more than four months when Todd Henry finally shot me a note from his BlackBerry saying he could arrange an interview. A day later, he said Gilliams wouldn’t even call him back, so the interview was off.
So now here we all are, in New York federal court.
“You know what this case reminds me of?” Henry says to me as we wait. “You know that movie The Sting?” At the mention of the movie title, another lawyer walking by puts his hand to his face and perfectly executes the “tip of the nose” motion made famous as the signal to those in on that scam. Henry laughs, repeats the motion. He’s right: This case is like The Sting. The problem is, everyone thinks he or she is the “mark” who was stung. Including Gilliams, who apparently believes he’s the victim of a scheme—and a selective, racially motivated prosecution.
At 10:44, the large wooden back doors of the courtroom swing open, and Gilliams walks in. He’s tall but not overpowering—with his close-cropped hair and goatee, he looks like a shorter Moses Malone. He walks with a slight limp. His dark blue business suit is rumpled after the trip from Philly; his face is impassive, and he has a look in his eyes of spent brashness that conjures the word “saditude.” He takes a seat next to his former lawyer and now co-defendant, Scott, but the two barely acknowledge each other. Then Gilliams puts his right hand to his face and slouches in to converse with Henry.
The case against Gilliams starts with a 66-year-old semi-retired Cincinnati ATM company executive named Dave Parlin, who invested $4 million with a new-agey nonprofit, and a 70-something businessman named Vassilis Morfopoulos, a heavyset, bald Greek national who wouldn’t look out of place as a James Bond villain (“Dr. Morf”). Morfopoulos allegedly claimed he could help Parlin earn five percent a week on his money, with minimal risk, by investing in Treasury strips, an obscure derivative of T-Bills. But the $4 million was never invested in strips. Instead, Morfopoulos gave the money to Tyrone Gilliams, who supposedly had access to the strips through his brokerage account with Wells Fargo Advisers on the 46th floor of One Liberty Place.
According to lawsuits filed against him by Parlin and the SEC’s complaint, Gilliams never invested the $4 million as promised; instead, he had the funds transferred to his personal bank account and started spending. (Gilliams, through his lawyer, denies ever promising to invest the money in strips specifically.)
Either way, Parlin claims he didn’t know Gilliams even had his money until it was gone. Soon, the FBI was investigating a criminal case, which quickly came under the jurisdiction of the most powerful federal prosecutor in the country, Preet Bharara, the U.S. Attorney from the Southern District of New York, who handles all major Wall Street financial fraud cases. In November, Tyrone Gilliams was indicted by a federal grand jury in New York.
Back in the courtroom, the judge finally starts the proceedings, and dispatches the hearing quickly: The lawyers will convene again in late June, with a trial perhaps beginning in January.
Afterward, I chase down Henry in the lobby, making one last stab at an interview with Gilliams. He says his client is about to meet up with him, and we all can talk. We stand outside, waiting, for 10 minutes. Henry’s phone rings. It’s Tyrone.
“Where are you?” Henry asks, and starts explaining where we’re standing. Then he says, “Oh, okay” and hangs up.
Tyrone, he says, is already gone.
One of the striking things about the Tyrone Gilliams case is how much the people pursuing it still don’t know, even as they turn over every last one of his Chick-fil-A lunch receipts. They think they know how he spent their money: paying off debts from previous deals gone bad; more than $25,000 for each of his kids’ Shipley School tuitions; charging meals and hotel rooms and airfares and limo services; taking $50,000 cash advances pretty much every week; and eventually paying for all the Joy to the World Fest events, a tab of more than $1 million. He even paid a Chester video production company to follow him around for an online reality show about his life. What they still don’t know is who Tyrone Gilliams is.
“Gilliams strikes me as pathological,” says one lawyer involved in the case. “He will say things that are absolutely preposterous and demonstrably false … but that won’t stop him from saying them. What the psychology is—well, I’m in the wrong profession for that. I understand there are people who are dishonest in this world and people who are crazy in this world, but I don’t know how much of each he is.”
One source in the music industry who has known Gilliams for years says he understands why people took him seriously. “Look, he’s very educated, very quiet, very mysterious,” he explains. “He is an Ivy League graduate, a higher intelligence. Whether it’s business or criminal, he’s still a higher intelligence. Though he rolls like a Rothschild, you’re not gonna find too many people who know much about him. He’s like Keyser Söze and shit. Fuckin’ Keyser Söze!”
Gilliams grew up in South Jersey. His father was a minister and Camden community leader, but the family lived in more upscale Moorestown. Gilliams played basketball for Camden High, then went on to play for Penn in the late ’80s. He was a good-but-not-great guard but an unusual student athlete, an economics and history of law major with a minor in religious studies who talked a lot about faith and God.
Coming into his last season of eligibility, Gilliams caught a break: Coach Tom Schneider, with whom he didn’t get along, was replaced by his top assistant, former La Salle great Fran Dunphy. Gilliams was named co-captain, and ended up as one of the team’s top point guards and jump shooters. “He did what I asked him to do,” Dunphy remembers. “He had a good IQ on the court and was a smart guy off the court.”
In his senior year, Gilliams told the Daily Pennsylvanian that he wanted to go to law school. “Hopefully Yale,” he laughed. He mulled following his father into the clergy, saying he believed his purpose was “to glorify God and bring others to Him through my play and through my actions.”
Instead, after college Gilliams promoted rap shows, and went on to work either for or with Sean (then “Puffy,” now “Diddy”) Combs at Bad Boy Sportz, which aimed to represent athletes with rap-star edge. While Gilliams’s website claims that business failed because of the bloody East Coast/West Coast rap wars, one former friend says he and Diddy split over a woman—the same one Diddy would mention at the Joy Fest.
In the late 1990s, Gilliams decided to become a pastor. He had the calling—his father was a devoted preacher who had relocated to St. Peter’s Church in struggling Chester, where he was known for feeding anyone who came to services. “Tyrone always wanted to be the best at everything, even the ministry,” says one friend. “He said, ‘You have pastors making millions of dollars, driving Rolls-Royces.’ So Tyrone wanted to be as big as them.”
Short on money and trying to build his online ministry, Gilliams did what he always had done, according to this same friend: He “borrowed” cash from women—professional women captivated by his vibe, which one friend described as “suburban guy who went to Penn but wanted to be accepted and respected on the streets.” He got a gun and a license, the friend says, “so he could carry it and look like a ‘big dog.’”
But he wanted even bigger things. In 2002, he thought he had his chance—a potential deal with Philadelphia rap producer Joe Nicolo, of Studio Four and Rough House Records. Nicolo was an investor/producer on the film Shade, starring Sylvester Stallone, Jamie Foxx and Gabriel Byrne. Nicolo was introduced to Gilliams “as supposedly a player who had major contacts,” Nicolo recalls. “Tyrone talked a mean streak about how he could hook all this stuff up. I was probably naive taking him at his word, but I was like, ‘Dude, if you can hook me up with distribution, I’ll give you right of first refusal,’ and we put a time date on it. He didn’t come up with anything. I figured that was that, and then he had some total goofball lawyer sue me, saying, ‘Blah, blah, blah.’”
The lawsuit was no fun for Nicolo, who was angling to get a soundtrack deal for the movie; the court ruled that he didn’t really own the rights to which he’d offered Gilliams a free option. The trouble delayed the film’s release for months. But according to one friend, the episode just fueled Gilliams’s desire to have a life with more zeros attached to it.
“I remember he heard that Puffy had made $100 million one year,” this friend recalls. “He couldn’t believe it. Suddenly he was talking about doing million-dollar things, and I said, ‘Where are you gonna get millions of dollars?’ He said, ‘Don’t worry about that.’ That’s when I walked away from that relationship. I thought, If that’s where he’s going, I just hope nobody gets hurt.”
It’s now up to any number of juries—civil and criminal—to untangle not only why and how Tyrone Gilliams spent $5 million of other people’s money, but also how the hell anyone ever gave him that money in the first place.
The soap opera began in November 2009, when Cincinnati businessman Dave Parlin met a gentleman named Brett M. Smith, who had a nonprofit foundation called HEARTT (Human Engineering and Research Transitional Technologies), an organization with religious overtones based in the tiny Mount Rainier-view town of Buckley, Washington.
Parlin talked to Smith about charitable investing, presumably to do good with some of the money he’d earned when he sold his ATM companies. According to Parlin’s civil complaint, it was Smith who first told him about Dr. Morf—Vassilis Morfopoulos, an acquaintance of Smith’s who worked in New York in international finance.
Parlin and Smith went to New York to meet Morfopoulos, who allegedly told them he was in the process of raising $10 million to invest in Treasury strips, which he said had a rate of return “targeted at five percent per week.” Parlin set up a family foundation with $2 million, and in early March 2010 wired that money into a JPMorgan account.
Parlin now alleges that this JPMorgan account was created strictly for this money, and that Morfopoulos had no actual experience trading Treasury strips and no direct access to them. He did, however, have financial pressures: Just a year earlier, he had finished paying off a $237,516.91 judgment to the IRS for back taxes.
According to Parlin’s complaint in May 2010, Morfopoulos told Parlin that he’d failed to raise the rest of the $10 million, but if Parlin would give his “HEARTT Fund” another $2 million, that would be enough to access the strips. So on May 12th, Parlin wired another $2 million to the HEARTT Fund. The paperwork for the transaction allegedly stated that Parlin’s family foundation would receive earnings monthly from the account, and that Morfopoulos had to invest the money himself and could not broker it to another investor. (Morfopoulous maintains this was never part of the agreement.)
Then Dave Parlin sat back and waited to hear the good news about his earnings.
Parlin’s complaint alleges that a few weeks after the HEARTT Fund account at JPMorgan received the $4 million, Morfopoulos spoke with an acquaintance in California, Laura Keller—a 49-year-old businesswoman who ran a Bay-Area-based nonprofit—about Treasury strips. Keller had heard about the amazing returns possible with Treasury strips and wanted to invest $1 million. She also said she knew someone who claimed to have access to the strips: a businessman in West Palm Beach, Florida, named J.R. Delgado, who had just started doing some business with Tyrone Gilliams.
Delgado and Gilliams were both around 40, raising small children while breadwinning in an unconventional way, putting together elaborate business deals in which they could profit from the profits. Delgado’s lawyer, G. Lynn Thorpe, says his client met Gilliams through a previous strips deal that didn’t work out. Afterward, he says, Gilliams told Delgado he could get strips himself and suggested they troll for clients together.
All of which is the best available explanation for how millions in charitable investments wound their way to Tyrone L. Gilliams Jr. and his account with Wells Fargo Advisers at One Liberty Place.
Keller apparently convinced another investor to wire $1 million to the escrow account of Gilliams’s then-attorney, Everette Scott. According to the indictment, at least three fourths of this money was misappropriated: $325,000 was transferred to the bank account of a law firm in Utah (to settle a threatened lawsuit against Gilliams), and another $395,000 was transferred to Gilliams’s personal account at Citibank; the remaining $15,000 was allegedly transferred to the business account of Scott’s law firm, at least in part at Gilliams’s instruction.
Unaware of any of this, Morfopoulos met with Gilliams in New York on July 7th. They closed the deal. Several weeks later, Dr. Morf turned over $4 million to Scott’s escrow account—without, Parlin alleges, ever telling him.
The feds say not one penny of Dave Parlin’s money was ever invested in Treasury strips. But it did pay for a lot of other stuff.
The indictment says there was $450,000 returned to a Midwestern businessman Gilliams had convinced to invest in a coal mining venture the year before. Some $510,000 was transferred to Tyrone Gilliams’s personal account at Citibank. The SEC alleges about $300,000 went to turn a property in Denver into a medical marijuana farm.
According to the SEC claim, Gilliams authorized Scott to transfer $40,000 of Parlin’s money into Scott’s law firm business account; that same day, Scott wrote a check from the account for $46,000 to Holt Motorsports, a used Porsche dealer in West Chester. The memo line reads, “Porsche 2006 911 S.”
Gilliams kept Morfopoulos and Keller at bay by sending them little bits of their own money over the next few weeks, purporting that these were the promised earnings. But Morfopoulos grew suspicious. In October, he says, he requested that all of Parlin’s money be returned immediately. Gilliams didn’t comply. But several weeks later, he did finally invest $1,620,000 of Parlin’s money—not in Treasury strips, but in a gold-mining business in Ghana.
Four days after the money went to Ghana, on Friday, November 19th, Morfopoulos again asked for the money back, and was again ignored. So he hired an attorney, Christopher Chang, a former Manhattan prosecutor, to pursue Gilliams. Parlin says he, the guy who had given Morfopoulos the $4 million, remained in the dark.
The next day, the Saturday before Thanksgiving, 600 people lined up outside State Senator Anthony Hardy Williams’s office in Southwest Philadelphia for free turkeys, paid for in part by local businessman T.L. Gilliams. This act of kindness was to promote the upcoming philanthropic Joy to the World Fest.
As a warm-up to his Philadelphia charity events, Gilliams arranged to fly friends to the Bahamas for a gala comedy night in Nassau just before Christmas. He also hired a Chester video production company, the Artist Warehouse, to start following him and his friends around to create “TLG TV,” a sort of online reality television show about his suddenly high-profile life.
Just before Joy to the World, Gilliams faced his first lawsuit concerning the money that was supposed to be earning five percent a week in Treasury strips, filed by Dr. Morf’s lawyer, Chris Chang; it demanded the $4 million back, plus another million in punitive damages. At the time, according to court filings, Morfopoulos was still telling Parlin that his money would be invested in strips any minute.
An amazing amount of Parlin’s money was spent during the next few weeks, according to the feds, not only on the Joy to the World Fest but also on the video crew that covered it like breaking news. A subsequent “All-Star Weekend” party, held at the Vault on North 2nd Street, was lavishly documented and rush-edited into “TLG TV” pieces posted on YouTube. One member of the video crew later told Reuters that he shot a sequence “where I see [Gilliams] blow $70,000 on drinks.”
Back in Cincinnati, Dave Parlin was growing more and more concerned about the nonexistent profits on his $4 million. On January 28, 2011, he demanded that Morfopoulos return the money in three business days. When that didn’t happen, Parlin hired a New York attorney, Louis Craco. Originally, Craco says, they sued Morfopoulos, but Dr. Morf’s lawyer, Chang, told them they were suing the wrong guy—that he and his client had already filed a complaint against someone in Philadelphia named Tyrone Gilliams.
Two weeks later, Parlin sued pretty much everyone involved in the entire mess. The FBI launched its own case. In the year since, everyone involved has been trying to sort out who was stung, who did the stinging, and why—and where the rest of the money went.
But the whole case may rest on one simple question, as one lawyer put it: “What is going on in Tyrone Gilliams’s brain?”
That’s what one of his college instructors, Wharton prof and sports attorney Ken Shropshire, has been wondering. “Tyrone was a nice, sincere guy who certainly projected a maturity beyond his years,” he says. He remembers going to a De La Soul concert Gilliams produced at Cheney University, and occasionally attending the Chester church where Gilliams’s dad preached. “Tyrone seemed to have a close relationship with his father,” he says, “and I just don’t know enough about what has happened here to make sense of it. But it is tragic—even just that he’s accused.”
Tyrone Gilliams hasn’t been seen much around Philadelphia since his arrest in October. He did, however, agree to a radio interview on 100.3 WRNB with his friend MoShay LaRen on November 7, 2011. The subject: the season premiere the night before of The Real Housewives of Atlanta, and any insight Tyrone could offer about a fight between Nene and Sheree.
Gilliams had been watching the Steelers/Ravens game when friends started texting him that those Real Housewives were fighting over him and the money Sheree was paid to appear at Joy Fest. On LaRen’s program, Gilliams took the side of Sheree, saying of Nene (who pitched a fit over not being the first one asked to make an appearance), “It’s unfortunate people get caught up with themselves. It was never about her. Nene thought the whole Joy to the World Fest was about her, too. But … it’s not about you, it’s not about me, we’re doing good, we’re giving back, we’re putting God first.”
Gilliams went on to explain that the issue with the two housewives “is deeper than that … sometimes females when they don’t have their way and can’t get what they want, they try to spin it—”
MoShay interrupted: “Okay, let’s talk about Nene not getting her way with you.”
Gilliams demurred. He said Nene wasn’t even his type. “My type is the type of person like you, who does work and looks to give back to the community and is not about the glitz and the glamour.”
He segued into a plug for the second annual Joy to the World Fest, which he apparently believed was still going to happen. He talked about how the event would be held this year at the Loews—neglecting to mention that the hotel cancelled his contract after his indictment. He urged people to check out his website, which had a whole schedule of events, including a testimonial dinner for Sonny Hill, in whose summer league Gilliams had played. Unfortunately, no one had mentioned the dinner to Sonny Hill.
“We’re truly thankful and blessed about where we are and where we’re going,” Gilliams said. But before the interview ended, he circled back to Nene and Sheree’s fight. “It’s unfortunate,” he said, “that sisters are battling over something minute. I mean, you should empower each other. … It’s about lifting each other up, not about bringing each other down.” To him, he said, wanting to “take somebody else’s money isn’t really good.”
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