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Bullion & Precious Metals – CFTC Charges Florida-Based Berkley Companies with $2.7 Million in Fraud

Commodities Futures Trading Commission

Massachusetts Resident Jeffrey Slemmer, Florida Residents Christian Dorrian and Adam Roth, and Their Florida-Based Companies Charged with Fraud, Engaging in Illegal, Off-Exchange Precious Metals Transactions, and Registration Violations

By Commodity Futures Trading Commission ….
On June 7, the U.S. Commodity Futures Trading Commission (CFTC) announced that it filed a civil enforcement action in the U.S. District Court for the Southern District of Florida on May 31, 2016 charging defendants Jeffrey Slemmer of Acton, Massachusetts, Christian Dorrian of Boynton Beach, Florida, and Adam Roth of Boca Raton, Florida, and their respective Florida companies Slemmer Enterprises LLC, Dorrian Enterprises LLC, and Roth Investment Group LLC with fraud, engaging in illegal, off-exchange transactions in precious metals, and acting as futures commission merchants without registering as such with the CFTC, as required. As alleged in the Complaint, the defendants executed their unlawful scheme using the business names Berkley Hard Asset Group, Berkley Hard Assets, and Berkley Rare Diamonds.

The CFTC’s Complaint charges that since at least June 2012, the defendants fraudulently solicited and received more than $2.7 million from at least 60 customers for the purchase of precious metals on a leveraged, margined, or financed basis, as well as on a fully-paid basis. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, leveraged, margined, or financed transactions, such as those offered by the defendants, are illegal, off-exchange transactions. According to the Complaint, the defendants represented to customers that precious metals would be purchased and stored at a depository on the customers’ behalf. The defendants, however, generally failed to purchase and store sufficient amounts of precious metals for their customers, instead misappropriating customer funds for other purposes.

The CFTC’s Complaint alleges that the defendants employ a deceptive “bait-and-switch” scheme to further defraud their customers. According to the Complaint, after soliciting customers to purchase precious metals, the defendants urge customers to sell their purported precious metal holdings and purchase diamonds instead. The defendants provide customers with diamonds along with purchase orders and appraisal documents that fraudulently misrepresent the diamonds’ fair market or resale value. As alleged in the Complaint, customers are left with diamonds worth far less than what the defendants represent and only a small fraction of the customer’s original investment.

In its request for relief against the defendants, the CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, restitution for the benefit of customers, permanent registration and trading bans, and a permanent injunction from future violations of the Commodity Exchange Act, as charged.

The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers to ensure the wrongdoers are held accountable.

CFTC Division of Enforcement staff members responsible for this case are Daniel Burstein, Elizabeth Pendleton, David Terrell, Joseph Patrick, Scott Williamson, and Rosemary Hollinger.

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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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