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Precious Metals Dealers Charged in $7 Million Retirement Account Fraud

Gold Scammers. Image: CoinWeek / Adobe Stock.
Gold Scammers. Image: CoinWeek / Adobe Stock.

Commodity Futures Trading Commission (CFTC) ……
The Commodity Futures Trading Commission (CFTC) announced on Tuesday, September 26, that it has filed a complaint in the U.S. District Court for the Northern District of Texas against Dallas-based Damien Moran and precious metals dealer companies Crown Bullion, Inc. and Bright Future Financial LLC (also d/b/a Oakhurst Metals) for fraudulently soliciting customers to purchase precious metals in self-directed individual retirement accounts, and misappropriating customer funds and assets.

As the complaint alleges, the defendants received more than $7 million from over 100 people–mainly elderly and retirement-aged–since March 2018 in their ongoing scheme, and have misappropriated most of those funds, violating the Commodity Exchange Act (CEA) and CFTC regulations.

“This filing is another example of the CFTC working to protect customers from fraud in the precious metals markets,” said Director of Enforcement Ian McGinley. “As alleged, the defendants defrauded victims out of their hard-earned retirement savings with deceptive claims of safe and secure precious metals investments through self-directed IRA accounts, but in fact, they misappropriated most of the funds. There is no room in the commodity markets for precious metals dealers who defraud their customers.”.

CFTC Obtains Statutory Restraining Order

On September 20, U.S. District Judge Sam A. Lindsay entered a statutory restraining order against the defendants, freezing their assets and giving the CFTC immediate access to their books and records. In addition, the court scheduled a preliminary injunction hearing at 2 p.m. on October 3, 2023.

In its continuing litigation, the CFTC seeks restitution to defrauded victims, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and permanent injunctions against further violations of the CEA and CFTC regulations, as charged.

Case Background

The complaint alleges beginning in March 2018, the defendants targeted elderly and retirement-aged persons, soliciting them to purchase precious metals from Bright Future, Oakhurst Metals, or Crown Bullion through self-directed IRA accounts. In their scheme, the defendants lured victims into contact with a telephone sales representative through false or deceptive advertisements touting the safety and security of precious metals investments; the benefits of investing in precious metals through a self-directed IRA; and the experience and expertise of the defendants in guiding customers in precious metals investments. After customers deposited funds with IRA custodians, hand-picked by the defendants, the defendants issued fraudulent invoices to the custodian, causing the transfer of funds or assets from the custodian to the defendants. The defendants then misappropriated most of the funds they received, purchasing metals for only a fraction of their total transactions and often at vastly inflated prices.

As alleged in the complaint, more than a hundred victims have transferred more than $7 million in funds or assets to the defendants, mostly from their self-directed IRAs, and the defendants misappropriated most of those funds.

The Division of Enforcement staff responsible for this matter are Joseph Patrick, Carlin Metzger, Sincere Belton, David Terrell, Scott Williamson, and Robert Howell.

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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.

The CFTC also strongly urges the public to verify a company’s registration with the CFTC before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’s registration status can be found at NFA BASIC.

Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the Whistleblower Office. Whistleblowers are eligible to receive between 10% and 30% of the monetary sanctions collected paid from the Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.

CoinWeek
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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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