Abraham Gutterman, along with Alliance Capital Metals LLC (ACM) and AR Goldman Wealth Management, LLC (ARGWM) – doing business as U.S. Principal Financial Services – are facing charges of commodity options fraud and misappropriation, the U.S. Commodity Futures Trading Commission (CFTC) announced on March 20, 2012. The defendants, all based in South Florida, allegedly defrauded at least 15 customers out of $483,725.
Judge Cecilia M. Altonaga of the U.S. District Court for the Southern District of Florida issued an emergency order on March 15, 2012, freezing the defendants’ assets and prohibiting the destruction of financial records. A hearing is scheduled for April 11, 2012.
According to the CFTC complaint, from November 2009 through March 2012, Gutterman, ACM, and ARGWM fraudulently solicited funds from customers under the pretense of trading gold and oil commodity options. However, the defendants allegedly misappropriated the funds for personal expenses, including dining, gambling, entertainment, and retail purchases. Customers were reportedly never informed that their money wouldn’t be exclusively used for trading.
The scheme involved cold-calling, a website, and in-person meetings, including one at a bar in Hialeah, Florida. ACM and ARGWM allegedly employed high-pressure sales tactics, repeatedly contacting potential investors and promising substantial profits. Customers received no documentation regarding their investments or account statements. When one customer inquired about their investment’s performance, they were allegedly directed to monitor gold prices on television news.
The CFTC alleges that within months of investing, customers were told their funds had been lost and were pressured to invest additional money to recoup their losses. Requests to sell the commodity options and receive remaining funds were allegedly denied. No funds were ever returned to the defrauded customers.
The CFTC is seeking civil monetary penalties, restitution, rescission, disgorgement of ill-gotten gains, trading and registration bans, and preliminary and permanent injunctions. The Aventura, Florida, Police Department assisted in the investigation.
Source: CFTC.gov
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