CFTC Charges Precious Metals Dealers in $7 Million Fraud Scheme Targeting Retirement Accounts

The Commodity Futures Trading Commission (CFTC) has taken legal action against precious metals dealers in Dallas and Los Angeles, filing a complaint in the U.S. District Court for the Northern District of Texas. The defendants, including Damien Moran, Crown Bullion, Inc., and Bright Future Financial LLC (also known as Oakhurst Metals), are accused of orchestrating a fraudulent scheme that garnered over $7 million from retirement accounts.

According to the CFTC's complaint, the defendants engaged in fraudulent activities involving self-directed individual retirement accounts (IRAs) and precious metals. Their alleged actions span from March 2018 to the present day and involved misleading over 100 individuals, primarily elderly and retirement-aged.

The defendants purportedly solicited these victims, luring them into purchasing precious metals through self-directed IRAs with deceptive claims of secure investments. They touted the safety and expertise of their precious metals investments, painting a picture of a lucrative and trustworthy opportunity.

However, the CFTC's investigation suggests that the defendants misappropriated the vast majority of the funds they received. They issued fraudulent invoices to IRA custodians, who then transferred funds or assets to the defendants. Despite customers depositing significant sums, the defendants reportedly purchased metals for only a fraction of the total transaction value, often at inflated prices.

Immediate Legal Action and Asset Freeze

The CFTC has taken immediate legal action to address the alleged fraud. On September 20, 2023, U.S. District Judge Sam A. Lindsay entered a statutory restraining order against the defendants. This order freezes their assets and grants the CFTC access to their financial records and documents.

Additionally, a preliminary injunction hearing is scheduled for October 3, 2023, further reinforcing the CFTC's commitment to pursuing justice in this case.

In the ongoing litigation, the CFTC seeks the following remedies:

• Restitution for defrauded victims.
• Disgorgement of ill-gotten gains.
• Civil monetary penalties.
• Permanent trading and registration bans.
• Permanent injunctions to prevent further violations of the Commodity Exchange Act (CEA) and CFTC regulations.

This legal action highlights the CFTC's dedication to protecting investors from fraudulent activities in the precious metals markets.

A Word on Precious Metals Fraud

The CFTC has been proactive in warning investors about the risks of precious metals fraud. In a series of customer protection advisories and articles, including the Precious Metals Fraud Advisory, the agency provides guidance on identifying and avoiding precious metals scams.

As this legal battle unfolds, the CFTC remains committed to safeguarding the interests of investors and maintaining the integrity of the financial markets.