NEW YORK Tyrone Gilliams, a Philadelphia commodities trader and hip-hop promoter, was convicted by a New York federal jury of fraud in connection with an investment scheme.
Also convicted was Gilliam's former lawyer, Everette Scott.
Both men were charged with working together to "devise a scheme and artifice to defraud" investors out of at least $4 million involving a purported investment in Treasury Strips.
The government charged that most of the money raised by the men was diverted to pay off other obligations or for their personal use. Prosecutors said none of the investor money went into Treasury Strips, a derivative of U.S. Treasury bonds that separates the coupon and principal of the underlying note into different securities.
Specifically, the jury found the men guilty of one count of securities fraud and two wire fraud charges.
In May 2011, Reuters first reported on Gilliams and his apparent scheme to raise money from investors to help finance a charitable event he held in Philadelphia that featured a number of celebrities, including Sean "Diddy" Combs.
In closing arguments on Tuesday, Assistant U.S. Attorney David Massey said: "Ladies and gentlemen, the evidence is in. Tyrone Gilliams and Everette Scott stole money from investors and lied about it again and again."
(Reporting By Matthew Goldstein and Bernard Vaughan)