A Los Angeles-based luxury watch trader has been jailed for almost six years in Federal prison after pleading guilty to wire and mail fraud.
Anthony Farrer was first arrested in November 2023 and entered a plea of guilty to fraud in October last year.
Los Angeles prosecutors accuse him of swindling dozens of customers out of at least $5.6 million through what they have described as a Ponzi scheme for luxury watches.
“This defendant stole millions of dollars from customers who trusted him and then used his ill-gotten gains to fund his exorbitant lifestyle,” said Acting United States Attorney Joseph T. McNally. “The sentence imposed today sends a message that those who defraud the public will be held accountable.”
The self-titled The Timepiece Gentleman was described as a con-man whose watch trading became a complex web of using customers’ watches and payments to fund a lavish lifestyle.
His luck ran out when the high-end watch owners he victimized brought his crimes to the attention of law enforcement, according to Akil Davis, the Assistant Director in Charge of the FBI’s Los Angeles Field.
Watch trader’s Ponzi Scheme
Following the sentencing, authorities described how, from November 2022 to November 2023, Farrer used The Timepiece Gentlemen business to connect purchasers and sellers of high-end watches from Rolex, Richard Mille, and Patek Phillipe, among others.
In a typical consignment sale, a client would ship a watch to The Timepiece Gentleman and Farrer would take possession of the watch, agreeing to display it at his Beverly Hills store and through online and social media marketing.
Once the watch was sold, Farrer was supposed to remit the sales proceeds back to the client, minus a consignment fee, which typically was approximately 5% of the sales price. If the watch did not sell within a specific time or for a specified price, Farrer was to return the watch to the client.
But instead of remitting watch sales proceeds – or the unsold watches themselves – back to the clients, Farrer sold the client watches and kept the proceeds for himself.
He also used client watches – without the client’s knowledge or permission – as collateral for loans that he took out from lenders.
When a client asked about the status of a watch on consignment sale, Farrer lied and said that the watch had not yet been sold. In fact, Farrer already had sold the watch or otherwise disposed of it, keeping the funds for his own personal benefit.
In addition to his consignment sale business, Farrer also purported to buy watches on behalf of his clients.
Typically, a client sent funds to Farrer, often by wire transfers to his bank accounts or through payment processors such as Zelle, for the purpose of Farrer locating and buying a specified watch on the client’s behalf — a common concierge-style business model for people claiming to be well-connected with high end independent watchmakers.
But Farrer took the clients’ money and used it for other purposes, including to fund his lavish lifestyle such as buying or leasing luxury automobiles, apartments, and other luxury goods.
When a client who had sent him money asked Farrer about the status of a watch purchase, Farrer often sent another watch to the client to tide the client over or lull them into a false sense of security regarding the status of the purchase.
Like a Ponzi scheme, the other watch Farrer sent to the client often belonged to other clients who had themselves sent him that watch for a consignment sale.
These clients were unaware Farrer was using their watches for that purpose, rather than attempting to sell the watches on behalf of the clients.
In total, Farrer fraudulently obtained money and property belonging to more than 40 victims and caused total losses of at least $5,691,005.