CFTC Charges Individual And Firm With Precious Metals Fraud
Gold And Silver Scams Often Target Older Investors
Financial Elder Abuse And Whistleblower Cases
Precious metal dealers entice investors by promising to fulfill orders for silver or gold and actually deliver the metals to the investors. Often the promised delivery never occurs because the dealer in reality has no inventory of the metals. According to one watchdog group, more than 10,000 seniors have been victims of fraudulent gold and rare coin investments, losing close to $300 million in total. These fraudulent transactions may constitute financial elder abuse under California law and also whistleblower cases before the Commodity Futures Trading Commission (CFTC) for commodities trading violations. Evans Law Firm, Inc. can represent seniors in both types of actions against all persons responsible for gold investment fraud against them and pursue all available remedies for you. Call us today at (415)441-8669 and we can help.
Recent CFTC Case
A federal court recently entered a consent order against an individual and a now-defunct precious metals trading company for fraud and misappropriation in connection with a precious metals scheme. The order requires $1,381,461.86 in restitution to defrauded customers. Additionally, the order prohibits the trader from further violations of the Commodity Exchange Act (CEA) and CFTC Regulations and permanently bans him from registering with the CFTC and trading in any commodity interests. The order resolves a CFTC action against the trader and his firm for engaging in fraud and misappropriation in connection with a gold-and-silver scheme from at least October 2013 through April 2014. The order finds that defendants fraudulently represented that the firm was a highly successful precious metals firm and allegedly persuaded customers to purchase gold and silver from them by claiming that, among other things, they maintained an inventory of precious metals in stock and would fulfill a customer’s order from that inventory or would purchase precious metals from a supplier upon receipt of payment. The order also states that the firm in fact did not maintain an inventory of precious metals sufficient to fulfill customer orders and, in many cases, made no effort to secure the precious metals needed to fulfill customer orders. Instead, the vast majority of customer funds were allegedly misappropriated and used to pay operating expenses, invest in other businesses, pay unrelated debts, and refund disgruntled customers or fulfill other customer orders in the nature of a Ponzi scheme. In a separate, parallel criminal action, the trader pleaded guilty to wire fraud and was sentenced to four years in prison and three years of supervised release.
Financial Elder Abuse and Whistleblower Allegations
Whenever the defrauded investors are over age 65 here in California such schemes may also constitute financial elder abuse as a wrongful taking of the senior’s property, and also violations of state and federal securities and commodities violations that can be the bases for whistleblower cases. Cal. Welf. & Inst. Code § 15657; Cal. Corp. Code §§ 25400 et seq.; 17 CFR § 240.10b-5; 18 U.S.C. § 1348. Under California financial elder abuse law, senior victims are entitled to extra damages and attorneys’ fees and costs for bringing their action. Cal. Welf. & Inst. Code § 15657.7. Also, individuals who blow the whistle on commodities fraud may be eligible for a reward from the CFTC. 7 U.S.C. § 26(b). Last year alone, the CFTC awarded close to $20 million in whistleblower awards. Since the inception of the Whistleblower Program, the CFTC has issued 25 orders granting a total of more than $120 million in awards. The Commission actions associated with those awards have resulted in sanctions orders totaling nearly $1 billion.
If you are a California senior who has suffered loss as a result of a fraudulent gold or rare coin scam or other fraudulent securities or commodities trade, call Ingrid M. Evans at Evans Law Firm, Inc. at (415)441-8669. You may also have credible information for a whistleblower case. Ingrid can represent whistleblowers in CFTC cases, Securities and Exchange Commission (SEC) cases for securities fraud (related to stocks, bonds, private placements and variable annuities for example), banking fraud under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”), Internal Revenue Service (IRS) cases for tax fraud, particularly offshore tax avoidance schemes, and False Claims Act qui tam cases against corporations defrauding the government for payments or reimbursements.
 Evans Law Firm, Inc. was not involved in the case in any way.