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HomeCrime and FraudBullion Dealer Charles McAllister Charged with Fraud, Money Laundering

Bullion Dealer Charles McAllister Charged with Fraud, Money Laundering

By Commodity Futures Trading Commission ……
The Commodity Futures Trading Commission (CFTC) filed a federal civil enforcement action in the U.S. District Court for the Western District of Texas against Defendant Charles H. McAllister, of Auburn, Alabama, charging him with fraud and misappropriation in connection with contracts of sale of precious metals through his company, BullionDirect, Inc. (BDI). McAllister has never been registered with the CFTC in any capacity.

McAllister & BDI Allegedly Defrauded Thousands of Customers throughout the United States

The CFTC Complaint alleges that from August 15, 2011 through July 20, 2015, McAllister and BDI defrauded thousands of customers throughout the United States who purchased precious metals from or through BDI. McAllister’s and BDI’s fraud allegedly resulted in customer losses of more than $16 million.

Specifically, according to the Complaint, McAllister and BDI fraudulently solicited and induced customers, through BDI’s website, to send money to BDI for the purported purchase of gold, silver, palladium, and platinum from or through BDI. Customers purportedly could take immediate delivery of or store the precious metals with BDI. However, as alleged, McAllister and BDI failed to procure all the metal they were obligated to purchase for customers. Instead, McAllister and BDI misappropriated millions of dollars from thousands of customers in the fraudulent scheme to pay back other customers (in Ponzi scheme fashion), cover BDI business expenses, and invest in other businesses.

As further alleged, McAllister and BDI made material misrepresentations and omissions to customers in the course of their fraudulent precious metals scheme, and they issued false account statements to customers.

In its continuing litigation, the CFTC seeks, among other relief, restitution to defrauded customers, disgorgement of ill-gotten gains, trading bans, a civil monetary penalty, and a permanent injunction against future violations of federal commodities laws, as charged.

Related Criminal Charges

On January 18, 2018, the U.S. Attorney’s Office for the Western District of Texas filed a related criminal action charging McAllister with two counts of wire fraud and one count of money laundering in the U.S. District Court for the Western District of Texas for conduct spanning back to 2009. In conjunction with that action, McAllister was taken into custody on January 23, 2018 and later conditionally released.

The CFTC appreciates the cooperation and assistance of the U.S. Attorney’s Office for the Western District of Texas, the Federal Bureau of Investigation (FBI), and the Internal Revenue Service (IRS), all located in Austin, Texas.

CFTC Division of Enforcement staff members responsible for this matter are Jo Mettenburg, J. Alison Auxter, Stephen Turley, Joyce Brandt, Christopher Reed, and Charles Marvine.

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CFTC’s Precious Metals Customer Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Precious Metals Fraud Advisory, which alerts customers to precious metals fraud and lists simple ways to spot precious metals scams.

Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.

CoinWeek
CoinWeek
Coinweek is the top independent online media source for rare coin and currency news, with analysis and information contributed by leading experts across the numismatic spectrum.

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