A Montrose man was sentenced Friday to nearly two years behind bars for defrauding investors out of more than $1 million via an adult entertainment website scam.
Patrick Khalafian, 55, was ordered to pay about $1.1 million in restitution along with the 21-month federal prison sentence, according to the U.S. Department of Justice.
He pleaded guilty in July 2024 in downtown Los Angeles to a single count of wire fraud.
According to the indictment, from November 2009 to October 2016, Khalafian solicited investments for businesses — including 168 Entertainment LLC, Empire Entertainment Group Inc., and EEG LLC — that purportedly developed and operated adult entertainment websites.
Khalafian claimed that victims’ investments would be used for business operations, including developing software and the platform for the proposed websites, paying for servers, hiring employees and purchasing advertising. He also promised investors that their money would be repaid by a certain date, according to papers filed in Los Angeles federal court.
Instead, Khalafian used the victim investors’ funds on gambling, luxury shopping sprees and to pay back other investors. Khalafian lied about the status of the adult entertainment websites and eventually stopped responding to victims, disconnected his phone number and changed his email address, prosecutors said.
In July 2015, Khalafian received $1 million wired from a victim’s bank account in Canada to a bank account he controlled in Woodland Hills, according to the indictment. Prosecutors believe that amount included about half of the money Khalafian raised via the scheme.