Miami, FL – May 22, 2014 – A federal court in Florida has found Fred Jager and Harold Edward Martin, Jr. liable for a massive fraud involving precious metals transactions, resulting in millions of dollars in losses for over 3,200 customers. The judgment, entered on May 16, 2014, follows a trial initiated by the U.S. Commodity Futures Trading Commission (CFTC).
Jager and Martin, along with their companies – Hunter Wise Commodities, LLC, Hunter Wise Services, LLC, Hunter Wise Credit, LLC, and Hunter Wise Trading, LLC – were ordered to jointly pay $52.6 million in restitution to defrauded customers. Additionally, they face a civil monetary penalty of $55.4 million, the maximum allowable under the law.
The CFTC originally filed charges in December 2012, alleging that Hunter Wise misrepresented the nature of its precious metals transactions. A preliminary injunction was issued in February 2013, which was later affirmed by the Eleventh Circuit Court of Appeals.
Judge Donald M. Middlebrooks of the U.S. District Court, Southern District of Florida, determined that Jager and Martin knowingly defrauded customers for over 16 months, from July 2011 to February 2013. The court described their conduct as “repeated, callous and blatant.”
The scheme involved a multi-level marketing structure where “retail dealers” solicited customer accounts, claiming to sell financed physical metals – gold, silver, platinum, palladium, and copper. Customers were led to believe their funds were used to purchase metals stored in a secure depository. However, the court found that Hunter Wise never purchased any physical metals, arranged loans for customers, or stored any metals. Customers were instead charged exorbitant interest and storage fees on nonexistent assets.
“This result makes clear that the CFTC will aggressively act to protect customers from fraud,” stated Gretchen L. Lowe, Acting Director of the CFTC’s Division of Enforcement. “Customers are entitled to know the truth of how their hard-earned money is being used.”
Source: CFTC.gov
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