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HomeCrime and FraudCFTC Charges Additional Defendants in $200 Million Precious Metals Ponzi Scheme

CFTC Charges Additional Defendants in $200 Million Precious Metals Ponzi Scheme

Rust Rare Coin, Inc.

By Commodity Futures Trading Commission …..
The Commodity Futures Trading Commission (CFTC) and the Utah Department of Commerce, Division of Securities, through its Attorney General (State of Utah) filed an amended complaint alleging that Denise Gunderson Rust (Denise Rust) and Joshua Daniel Rust (Joshua Rust) actively participated and aided and abetted, in a precious metals Ponzi scheme with defendants Gaylen Dean Rust (Gaylen Rust) and Rust Rare Coin, Inc. (RRC). Through this scheme, Gaylen Rust and RRC fraudulently solicited at least $200 million from investors since May 2013 for the purported purpose of pooling their money to purchase silver, a commodity in interstate commerce (Silver Pool).

Specifically, the First Amended Complaint, filed on December 6, 2018, alleges that Denise Rust and Joshua Rust knew the Silver Pool was a fraudulent scheme. Denise Rust and Joshua Rust signed checks issued to Silver Pool investors knowing that these checks were Ponzi payments involving money contributed by other investors. Denise Rust and Joshua Rust also transferred Silver Pool investor funds from bank accounts used by Gaylen Rust and RRC to one or more of the relief defendants or to help fund RRC’s other business activities.

The First Amended Complaint also alleges that the Silver Pool fraud is larger than previously alleged and involves more than 430 individuals and at least $200 million in investor funds.

The CFTC and State of Utah filed the civil enforcement action against Gaylen Rust and RRC and several relief defendants on November 13, 2018 in the U.S. District Court for the District of Utah, Central Division. At that time, Denise Rust and Joshua Rust were named as relief defendants because they, among others, were alleged to have received Silver Pool investor funds to which they had no legitimate claim. On November 15, 2018, the Court entered a restraining order freezing the assets of the defendants and the relief defendants and permitting the CFTC and the State of Utah to inspect all relevant records of the defendants and the relief defendants.

Receiver Establishes a Website for Silver Pool Investor Claims

The Court also appointed Jonathan Hafen of the law firm Parr Brown Gee & Loveless as receiver for the assets of defendants, relief defendants, and their affiliates. The receiver will establish a claims process through which Silver Pool investors will be able to submit information about claims for damages. The receiver will use the contact information obtained from Silver Pool investors to provide notice of that process.

Silver Pool investors may submit their information to the receiver via

In their continuing litigation against the defendants, the CFTC and the State of Utah seek disgorgement of ill-gotten gains, civil monetary penalties, restitution, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act, CFTC Regulations, and Utah securities laws, as charged.

The CFTC acknowledges and appreciates the continued cooperation and assistance of the Utah Department of Commerce, Division of Securities; the Utah Attorney General’s Office; the Federal Bureau of Investigation; the U.S. Attorney’s Office for the District of Utah; and the Securities and Exchange Commission, Salt Lake City Regional Office.

CFTC Division of Enforcement staff members responsible for this action are Jenny Chapin, Stephen Turley, Thomas Simek, Joyce Brandt, Christopher Reed, and Charles Marvine.

Listen to CFTC Enforcement Director James McDonald talk about precious metal cases on the podcast CFTC Talks.

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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 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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