If you agree to sell something on consignment, the arrangement is pretty simple, whether you’re selling homemade t-shirts or vintage menswear. If the product sells, the buyer gets something they want; meanwhile, you and the dealer each get a portion of the proceeds. It’s a simple transaction — or at least it should be. When a product sells and the original owner doesn’t get their portion of the proceeds, though — that’s where things get tricky.
Now, a Los Angeles luxury watch dealer faces charges from the FBI over accusations that he sold his clients’ timepieces without properly reimbursing him, in what observers have dubbed a Ponzi scheme. The dealer in question, Anthony Farrer, was also the subject of a Los Angeles Times investigation by Noah Goldberg that was published last month.
As Goldberg subsequently reported at the Times, Farrer now faces mail fraud and wire fraud charges. FBI agent Justin Palmerton estimated that the total money owed to Farrer’s clients is at least $3 million; as per the Times‘ reporting, he could be incarcerated for up to 20 years if found guilty.
One bizarre wrinkle to this case is the fact that Farrer has been fairly open about getting in over his head with his business, the Timepiece Gentleman. The Times cites an interview with Chad Plebo, who connected some of Farrer’s clients with law enforcement, on the bewildering nature of Farrer’s candor. “He confessed to running a Ponzi scheme and he almost does not seem to understand it,” Plebo said.
Accused Ponzi Scheme Organizer Targeted Mormon CongregationsThe scam involved nearly half a billion dollars
According to the Los Angeles Times investigation, Farrer’s clients trusted him with watches with values between $10,000 and $100,000. Among the watches cited in their reporting are a Rolex Sky-Dweller and an Audemars Piguet Royal Oak Offshore 44mm.
In a video posted to TikTok earlier this year, Farrer acknowledged that he was in “a $5-million hole.” What the legal consequences of that are, however, remains to be seen.
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