Montrose Man to Plead Guilty to Adult Website Fraud Scheme

LOS ANGELES—A man from Montrose, Calif. has agreed to plead guilty to a federal fraud charge stemming from a $1 million scheme involving a fraudulent adult entertainment platform, according to MyNewsLA.com. Patrick Khalafian was indicted by a federal grand jury in October 2020, according to a statement at the time published by the U.S. Attorney's Office for the Central District of California. Khalafian is facing a felony wire fraud count after defrauding investors of $1 million. He could face up to 20 years in federal prison. The fraud scheme lasted from November 2009 to October 2016, when Khalafian solicited investments for his businesses. Businesses for which he acquired funds included 168 Entertainment LLC, Empire Entertainment Group Inc., and EEG LLC.  All of this was purportedly to develop the software, IT infrastructure and groundwork for a network of adult entertainment websites.  A victim of the fraud scheme based in Canada wired funds of "ill-gotten gains" from a bank account to an account Khalafian controlled at a financial institution in the Woodland Hills area of Los Angeles. Prosecutors stated in the 2020 press release that they "believe this amount comprises approximately half of the money Khalafian raised via this scheme." The Federal Bureau of Investigation conducted the criminal probe, and the case is currently being prosecuted by the major fraud section at the U.S. Attorney's Office.