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Massive Precious Metals Fraud - Gold and silver not in vault as claimed

Martin Everson

Offshore Retiree
Moderator
Jan 2, 2018
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July 03, 2023

Today, the Commodity Futures Trading Commission (CFTC or Commission) filed a Consent Order for Permanent Injunction, Civil Monetary Penalty, and Other Equitable Relief Against Settling Defendants in the U.S. District Court for the District of Delaware against First State Depository Company, LLC (FSD) and Argent Asset Group LLC (Argent, and together with FSD, Settling Defendants), resolving an action initially filed on September 27, 2022, charging the Settling Defendants and their owner, Robert Leroy Higgins (together with the Settling Defendants, Defendants), with engaging in a fraudulent and deceptive scheme in connection with the purchase and sale of precious metals.[1] The CFTC’s complaint alleged that the Defendants operated fraudulent silver leasing programs referred to as the “Maximus Program” and the “Silver Lease Program,” through which they fraudulently solicited and misappropriated at least $7 million in funds and silver from at least 200 customers. FSD purported to be a “private depository” that would store customer metals. Argent was engaged in the business of buying, selling, and leasing precious metals.

Following the filing of the complaint, the investigation of the Court-appointed receiver revealed the full scope of the Defendants’ fraud—as much as $112.7 million in assets were missing from FSD, including over 500,000 American Silver Eagle Coins. Defendants deceived customers by suggesting that they were holding the coins on behalf of customers. Over 9,000 gold coins were also missing from customer accounts. According to the receiver, a majority of the assets that were supposed to be held at FSD were missing. The receiver found that Defendants brazenly left “IOU” slips in empty boxes marked to indicate a customer’s account, yet containing no assets. This kind of egregious behavior merits the full weight of the Commission’s enforcement authority.

The active efforts to conceal misappropriation by sending fake account statements indicating that Defendants had carefully stored and accounted for customer assets, and offering false and misleading excuses for why assets could not be withdrawn represents the very type of fraud Congress expressly intended to prevent when it enacted the Commodity Exchange Act. The CFTC has initiated many actions against fraudsters seeking to bilk hard-working Americans out of their hard-earned dollars by aggressively marketing precious metals, often at an excessive mark-up, while charging exorbitant storage and other fees.[2] This case is deeply troubling; Settling Defendants simply stole customer money or metals, without even a veneer of legality. Accordingly, the Consent Order requires the Settling Defendants to pay restitution of $112.7 million, as well as a civil monetary penalty of $33 million and permanent trading and registration bans.

While these sums are large, they are justified. Our enforcement efforts must be sufficiently calibrated to deter fraudsters from targeting vulnerable investors. There can be no mistake; we are committed to policing markets, identifying and investigating fraud, and protecting vulnerable customers from such conduct.

I thank the Division of Enforcement staff for their efforts in bringing this case, including Erica Bodin, Brian Hunt, Michael Loconte, and Rick Glaser, as well as former employee Michael Solinsky.

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Makes you wonder how many other precious metals scams are out there from companies pushing you to invest in metals ca#"!.
 
I initially started laughing when reading this thread, but then I remembered how easily people like my mother and other elderly people I know would fall for these shenanigans. It's so sad.
Even with the internet today, people still can't filter out the truth (<0.01%) from the bullsh1t (>99.99%). I have tried to have these eternal victims educate themselves, but they have NO interest. It's truly disconcerting. I have no solutions to these problems. They are beyond my circle of competence (which is very small, btw).
 
There are government owned mints and storages. For example,

Really? Wouldn't trust them at all after this behavior....


 
Keep storing your gold/silver with these “super safe” vaults thu&¤#
What about crypto backed with gold, is it any better? :rolleyes:
Multiple cryptocurrencies are backed by gold, including Tether Gold, DigixGlobal, Paxos Gold, Goldcoin, Perth Mint Gold, and Meth Gold.
 
What about crypto backed with gold, is it any better? :rolleyes:
Multiple cryptocurrencies are backed by gold, including Tether Gold, DigixGlobal, Paxos Gold, Goldcoin, Perth Mint Gold, and Meth Gold.
Like with any other financial instrument, the important part is the issuer. If you trust those issuers then it's ok but you always need to make sure the issuer is legit... Plus, I don't trust tokenized gold because they don't charge any fee and that doesn't make sense in my opinion.

No. It’s nonsensical to back crypto (which should be decentralized) with something.
It's just another financial instrument that someone can use, not everything needs to be decentralized (which btw full decentralization is a myth)
 
if I want to buy gold I buy the real thing, not a crypto supposedly backed by it.

Anyone remembers e-gold?
100%! I used to use it. My friend, who was at that time a retired former US Attorney prosecutor (RIP), knew Barry.

Who remembers DigiCash? I actually had those too, but David was a complex man to deal with. I even went to the Netherlands with it to implement as payment for road tools.

Oh...the days were I was so stupid in natural human behavior. I was great at math, physics, and chemistry, but probably the dumbest when it came to the true nature of humans rof/%

If they doled out IQs on the scale of temperature for knowledge on "laws of human nature" back then, I would have scored < −273.15 °C rof/% rof/%

***When I say friend, Al was +60 years my senior and he was my general counselor at Uni since I was an intl. student. He really was my friend. Rip, Al.
 
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