A Los Angeles broker who sold more than $1.5 million in fraudulent diamond and money market schemes while working for a Costa Mesa boiler-room operation was sentenced Wednesday to seven years in federal prison.
U.S. District Judge Edward J. Rafeedie sentenced Alphonso Lewis, 32, a managing broker with Crandall Financial Corp., to five years' probation and ordered him to pay $209,000 in restitution, in addition to serving time in prison.
Lewis was convicted of three counts of mail fraud for his involvement in the Crandall operation, which featured deceptive sales techniques and unauthorized use of customer money, according to court records.
"I feel it was a fair sentence and will serve as a deterrent to other mail-fraud boiler-room operations," Assistant U.S. Atty. General Gary S. Lincenberg said. "And the judge denied his motion for bail pending appeal."
Crandall was closed in September, 1984, when the Securities and Exchange Commission filed a complaint accusing the company of fraud and obtained a federal court order placing it in receivership. The indictment charged the company and 10 employees--including Lewis--of bilking about 800 customers out of nearly $9 million.
Lewis eventually turned the company in to the SEC after being fired during a falling out with the company's owners, Lincenberg said. But after leaving Crandall, Lewis started a rare-coin scam.
"He would call up investors and tell them that they were being taken by Crandall and (that they) would lose money, so they should sign over their diamonds to him and he'd give them rare coins," Lincenberg said. "They never heard from Al again once they signed over their diamonds."
Lewis and six other Crandall employees were convicted in November of mail or securities fraud. The six--including the company's owners--will be sentenced in upcoming months.
Three employees pleaded guilty to one count each and were sentenced earlier.
"It's really amazing the lack of remorse of these guys," Lincenberg said. "They'll talk about how sorry they are that people lost money, but they'll blame it on someone else."