Layton, Utah – Gaylen Dean Rust and his company, Rust Rare Coin, Inc. (RRC), are accused of running a $170 million Ponzi scheme targeting over 200 investors across at least 17 states, according to a joint enforcement action filed by the Commodity Futures Trading Commission (CFTC) and the Utah Department of Commerce. The civil complaint, filed in the U.S. District Court for the District of Utah, alleges the fraud began as early as 2008 and continued through November 2018.
The scheme, dubbed the “Silver Pool,” purported to pool investor funds to buy and sell silver, generating profits through market fluctuations. Authorities allege this was a sham, with Rust and RRC falsely claiming to achieve annual returns of 20-25%, and sometimes exceeding 40%, while providing fabricated account statements to investors. In the first eight months of 2018 alone, the defendants allegedly received over $42 million from investors and continued soliciting new funds as recently as October 8, 2018.
On November 15, 2018, U.S. District Court Judge Tena Campbell issued a restraining order, freezing the assets of Rust, RRC, and related entities. The court also appointed Jonathan O. Hafen as a temporary receiver to seize control of RRC and its assets, as well as the personal assets of Gaylen Dean Rust.
“As alleged, for at least a decade, the Defendants defrauded their friends, customers, and business associates out of more than $170 million,” stated CFTC Director of Enforcement James McDonald. “The Defendants allegedly concealed their fraud with false account statements and Ponzi payments; however, their scheme was brought to light through the combined efforts of the CFTC and our law enforcement partners.”
The CFTC and the Utah Department of Commerce are continuing their investigation and seeking full restitution for the defrauded investors. Details regarding the receivership and potential claims processes will be released by the court-appointed receiver, Jonathan O. Hafen, in due course.
Source: CFTC.gov
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