A Montrose man, Patrick Khalafian, has recently pleaded guilty to a charge of wire fraud after scamming investors out of nearly $1.2 million with promises of ownership in adult webcam businesses, according to the U.S. Attorney’s Office. The 54-year-old admitted to using the investor funds to pay for personal extravagances such as gambling and luxury shopping sprees, instead of developing and operating the promised websites.
Khalafian's scheme, running from November 2009 to October 2016, lured investors into putting money into businesses like 168 Entertainment LLC, Empire Entertainment Group Inc., and EEG LLC. He assured that investments would go toward business operations and that investors would see a return by specific dates. Misled by these promises, one victim parted with $1 million, expecting that the investment would cover expenses like servers, employee salaries, and advertising. Instead, Khalafian spent a substantial sum on his rent and luxury items, the day after receiving the investments, purchasing a new Ford F-150 truck among other things.
As detailed in the plea agreement, Khalafian attempted to keep his scheme afloat by telling investors their money was making progress in website development. After a while, however, Khalafian's responses dwindled. He severed contact with his investors, changing his phone number and email to avoid their increasing inquiries. In total, Khalafian's fraudulent activities have been calculated to cause a total financial loss of at least $1.17 million. His victims, including two others who were conned out of $80,000 and $90,000, respectively, never saw any repayment for their investments or the ownership interests they were promised.
For his crimes, Khalafian now faces a potential maximum sentence of 20 years in federal prison, with the sentencing set for February 21, 2025, by United States District Judge André Birotte Jr. The FBI led the investigation that brought Khalafian to justice, and Assistant United States Attorney Roger A. Hsieh of the Major Frauds Section is prosecuting the case.
