Facebook Scam Artist Found Guilty

A Sacramento, California jury took less than two hours yesterday to find con artist Tony Stratos guilty of four counts of wire fraud and two of money laundering. Stratos is accused of bilking investors out of $11.1 billion through the fraudulent sale of pre-IPO Facebook stock.
According to prosecutors, Stratos, operating under the alias Ken Dennis, told investors that he was helping telecom billionaire Carlos Slim buy a large stake in the social media network. A spokesperson for the Slim family said they have never had any contact with him or a man named Ken Dennis.

Social Networking Sites May Be Monitored

In December 2010, Silicon Valley money manager Divesh Makan emailed Facebook Chief Financial Officer David Ebersman to introduce him to Stratos. He said Stratos managed money for Slim, his family and “related parties.” From there, Stratos moved on to selling fake shares of Facebook before the company’s IPO.

Selling Fake Facebook Shares

At the time he tried to sell the fake Facebook stock, the Department of Justice had him under scrutiny and was set indict him on charges of stealing over $7 million from comedian Eddie Murphy’s ex-wife, Nicole Murphy. The Facebook con fell apart when he was arrested in the Murphy case. Sratos has been held in a Sacramento jail since 2011 in reference to Nicole Murphy. That case will be heard in October of this year.

In May 2013, the Department of Justice tacked on the charges of selling fake Facebook shares.

According to Bloomberg Stratos has quite a long track record as a con artist. He allegedly conned people all over the world by signing investors on for movies that were never filmed and real estate projects that never got built. In his dealings with Nicole Murphy, he offered to manage her money after her divorce, advising her to move her money to Dubai where the interest rates are higher. However, prosecutors allege he spent the money.

As for Facebook, Stratos pleaded not guilty to the charges. He testified in January 2012 that he never delivered the fake Facebook shares. He also said he had connected money manager Tim Burns with an executive at Facebook and other investors who said they had some shares to sell. He called the money he collected a fee and said he spent it paying off some of his debts, attempting to set up a restaurant in Las Vegas and buying three vehicles, namely, a Chevy Camaro, a Range Rover and an Audi convertible that was priced at $200,000.

According to court documents, even while in jail Stratos tried to keep his Facebook deal going by having friends negotiate on his behalf.

Tuesday’s verdict is expected to garner Mr. Stratos a prison term anywhere between 10 and 100 years.