Vermont DFR, 26 state regulators stop $68 million precious metals scheme

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Vermont DFR, 26 state regulators stop $68 million precious metals scheme

Tue, 02/01/2022 - 5:06pm -- tim

Vermont Business Magazine The Securities Division of the Vermont Department of Financial Regulation announced today that it is participating in a multi-jurisdictional, coordinated enforcement action to stop a fraudulent precious metals scheme that resulted in investments exceeding $68 million from at least 450 investors nationwide.

The Securities Division has joined the Commodity Futures Trading Commission (CFTC) and 26 other state securities regulators in filing a complaint in the United States District Court for the Central District of California alleging Safeguard Metals, LLC and Jeffrey Santulan, a/k/a Jeffrey Hill, solicited investors nationwide by touting precious metals at grossly inflated prices that were not disclosed.

“This is one of many large-scale precious metals investment schemes we’ve endeavored to stop since the pandemic began and we are investigating other similar cases. To prevent any further damages, investors are advised to be particularly cautious when purchasing precious metals and to check for outrageously high commissions, spreads, or markups as high as 30 to 70 percent,” said Deputy Commissioner Bill Carrigan. “As the market continues to fluctuate, we anticipate seeing more fraudsters attempting to capitalize on investor’s uncertainty and use fear to manipulate investors out of their hard-earned money.”

The investors in this case were advised to liquidate their holdings at registered investment firms to fund investments in precious metals, bullion, and bullion coins through self-directed individual retirement accounts. Self-directed IRAs should not be confused with traditional IRAs or other retirement vehicles.

“In expectation of additional precious metals investment schemes, investors are advised to check the registration of all investment products and professionals, diligently research investments, ask tough questions about the fees, markups or spreads, risks, and potential returns,” said Carrigan “If the answers seem too good to be true or don’t make sense, protect your wallet by just walking away.”

The defendants are accused of failing to disclose the markup charge for their precious metals bullion products and that investors could lose the majority of their funds once a transaction was completed.

In many cases, the market value of the precious metals sold to investors was substantially lower than the value of the securities and other retirement savings investors liquidated to fund their purchase.

In Vermont, two investors were defrauded out of over $100,000 in this nationwide scheme.

The Securities Division encourages investors to contact the Division if they suspect they have been targeted by similar precious metals investment schemes. Please contact the Securities Enforcement Division at DFR.Securities@vermont.gov.

Montpelier, VT (February 1, 2022) – Connect with the Vermont Department of Financial Regulation on the web.