CFTC Filed the Largest Joint Enforcement Action Against Metal Dealers in $185 Million Fraudulent Scheme

The US securities watchdog CFTC and 30 member regulators of the North American Securities Administrators Association (NASAA) announced this Friday the largest joint filing of a civil enforcement action against two precious metals dealers and their companies located in Los Angeles, California for running an ongoing $185 million fraudulent scheme targeting elderly Americans with little experience in precious metals.

Specifically, the alleged defendants includes TMTE, Inc., d/b/a Metals.com, Chase Metals, LLC, Chase Metals, Inc. (all under the brand name "Metals.com" ), Barrick Capital, Inc. and its principals, Lucas Asher a/k/a Lucas Thomas Erb a/k/a Luke Asher and Simon Batashvili. Tower Equity, LLC was also identified as a relief defendant.

According to CFTC's complaint, from at least September 1, 2017 to the present, the defendants fraudulently solicited and received over $185 million in customer funds, including more than $140 million in retirement savings, from at least 1,600 American citizens to purchase overpriced gold and silver bullion with overcharges averaging from 100% to more than 300% over the prevailing market price. As a result, nearly every buyer lost most of their funds deposited with the fraudsters. 

In the announcement, CFTC also revealed that on September 22, 2020, David C. Godbey, Judge of the case has issued a restraining order freezing the assets of the defendants and the relief defendant and permitting CFTC and the 30 state regulators to inspect all relevant records. 

In the continuing litigation, the regulatory alliance is going to seek to prohibit the defendants from further violating the Commodity Exchange Act, CFTC regulations, and other related state laws and force them to disgorge ill-gotten gains and pay civil monetary penalties. Besides, CFTC and other regulators are also trying to seek the enforcement of permanent registration and trading bans against the fraudsters.