(Bloomberg) -- A businessman who claimed to operate a high-end concierge service featuring custom credit cards crafted from solid gold was actually operating an illegal private bank that provided discreet financial services to high-net-worth customers, prosecutors said.
UK resident Christopher James Scanlon, 43, was arrested Thursday at Miami International Airport and charged with conspiring to control and own an unlicensed money-transmitting business, the US Attorney’s Office for the District of New Jersey said in a statement.
Scanlon, 43, originally from Utah, was the president, chief executive officer and founder of Aurae Lifestyle and Club Swann, which were marketed as concierge services for wealthy people, In reality, Scanlan ran an unlicensed private bank that derived most of its revenue from financial services, prosecutors said.
“Chris Scanlon is a dedicated entrepreneur who has worked tirelessly to build legitimate and respected businesses,” his lawyer, Edward Kim, said in a statement Friday. “He looks forward to having the opportunity to clear his name.”
The conspiracy count carries a maximum term of imprisonment of five years, a fine of up to $250,000 or twice the pecuniary gain to the defendant or loss to the victims, whichever is greatest, the US said.
Customers were charged as much as $60,000 to become members of Aurae Lifestyle, according to the government, receiving 14-or-18-karat custom gold MasterCard with the membership. They were also charged “significant fees” to make wire transfers, sometimes about 1% of the wire, prosecutors said. Annual dues were $5,000, according to a 2015 Robb Report article.
“Aurae Lifestyle was attractive to a particular type of customer because it provided customers the ability to engage in financial transactions without immediate scrutiny or detection by US financial regulators and provided customers with access to the US financial system when they otherwise would be barred from obtaining a US bank account,” prosecutors said in the criminal complaint. “A social media account for Aurae Lifestyle promised its customers ‘discretion.’”
Aurae was promoted by professional golfers and also marketed its products to professional poker players, striking a partnership with the World Poker Tour in 2015 and offering a 14-karat MasterCard preloaded with $10,000 and a year of concierge services to some tournament winners, according to a release from the WPT.
Customers included the manager of a marijuana distribution business that Scanlon met at a professional football game in New Jersey in 2016, who later pleaded guilty to conspiring to defraud the IRS; and a Colorado man who was charged with participating in a large-scale cryptocurrency mining scheme in December 2019, prosecutors said.
The government said Scanlon used a series of legal entities that he controlled to help his clients move money through accounts at three banks and two cryptocurrency companies without registering with the US Financial Crimes Enforcement Network.
Scanlon created the company “because he wanted a membership program that celebrated individuality, legacy and personal success,” according to Aureai’s website. “Chris was fortunate enough to meet a number of successful individuals and he came across an interesting insight. All of their personal stories were unique, all of their lifestyles were bespoke; however, all of their credit & debit cards looked exactly the same.”
The Robb Report said members of Aurea could receive a MasterCard made from 14-karat or 18-karat solid gold that could be embedded with as many as 164 precious stones. It was “presented in a hand-crafted heirloom marquetry box that is accompanied by a certificate of authenticity and an elegantly designed hand-stitched leather wallet with a unique central pocket for the card.”
The case is US v Scanlon, 23-mj-10168, US District Court, District of New Jersey.
(Updates with lawyer’s comment in fourth paragraph.)
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