The businessman collected the luxury watches from customers, promising them that he would sell the watches on consignment and take no more than a 5 percent fee, the authorities said.

Instead, they said, he sold the Rolexes and other high-end pieces to fund a lavish Los Angeles lifestyle — driving a red Lamborghini and a Ducati motorcycle and traveling frequently to Las Vegas to gamble.

The man, Anthony Farrer, 35, of Santa Monica, Calif., who is also known as the Timepiece Gentleman, was arrested by the F.B.I. this week and accused of defrauding customers out of at least $3 million while operating a watch consignment business in Beverly Hills from November 2022 through August 2023, according to a complaint filed in U.S. District Court for the Central District of California.

He is charged with wire fraud, a felony that carries a statutory maximum sentence of 20 years in federal prison, according to a news release from the U.S. Attorney’s Office for the Central District of California. Mr. Farrer’s lawyer could not immediately be reached for comment on Thursday evening.

According to the complaint, Mr. Farrer, who owned a watch business in Texas, moved to Los Angeles in February 2022 to open a store called the Timepiece Gentleman, where, prosecutors say, he persuaded customers to wire him money on the premise that he would purchase watches for them. Mr. Farrer then would either not produce the watches or would “send a completely different watch,” according to prosecutors. At the same time, they added, Mr. Farrer kept for himself the proceeds from the watches that he did sell.

At least 20 victims contacted law enforcement officials with complaints that they had never received money from the sales of their watches or the watches that they had given him money to purchase, according to the complaint. In one case, Mr. Farrer gave one of his customers a Rolex watch in lieu of the money he owed him. But the Rolex belonged to another customer, prosecutors said.

Mr. Farrer managed to “lull victims into a sense of security” by engaging in smaller transactions before asking them for significantly more money, according to the complaint.

In August, he admitted in a YouTube video to being millions of dollars in debt and to being an alcoholic and a drug and gambling addict. “I can’t hide from it any longer,” Mr. Farrer says in the video, in which he noted that he had been living beyond his means and spending other people’s money. “I’ve lied to my employees,” he says. “I’ve lied to my clients. I’ve lied to my friends. I’ve lied to my peers.”

Around the same time, he appeared to be traveling across the country, and as recently as Oct. 6, he continued to advertise watches for sale, according to the complaint.

In August, detectives with the Beverly Hill Police Department visited the business, which was on Rodeo Drive, and found the doors locked, the lights off and a camera doorbell ripped from its casing, according to the complaint. Mr. Farrer was arrested in the Venice section of Los Angeles on Tuesday. His arraignment is scheduled for Dec. 14.

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