A federal judge has ordered four Florida men and their companies to pay over $5.4 million for defrauding customers in a precious metals and diamond scheme. Judge William P. Dimitrouleas of the U.S. District Court for the Southern District of Florida issued a Consent Order against Jeffrey Slemmer of Acton, Massachusetts, Christian Dorrian of Boynton Beach, Florida, Adam Roth of Boca Raton, Florida, and their respective companies: Slemmer Enterprises LLC, Dorrian Enterprises, LLC, and Roth Investment Group LLC.
The defendants, operating under the business names Berkley Hard Asset Group, Berkley Hard Assets, and Berkley Rare Diamonds (collectively, the Berkley Enterprise), were found to have fraudulently solicited customers between June 2012 and May 2015. The CFTC initially filed charges in May 2016, alleging fraud, illegal off-exchange transactions, and operating as unregistered Futures Commission Merchants.
According to the court order, Slemmer, Dorrian, Roth, and others misrepresented the value and risk associated with investments in precious metals, as well as the qualifications of their brokers. They received at least $2,769,218 from over sixty customers intending to purchase precious metals, but only a portion of these funds were actually used for that purpose. The remainder was misappropriated for personal use.
The scheme also involved a “bait-and-switch” tactic, pressuring customers to exchange their precious metal investments for diamonds. The diamonds provided were accompanied by fraudulent appraisal documents inflating their value. The court found that the defendants provided false account statements and trade confirmations to customers, falsely representing their holdings.
The Consent Order mandates the defendants, jointly and severally, to pay $2,738,040 in restitution to defrauded customers and a $2,738,040 civil monetary penalty. They are also permanently banned from trading and registering with the CFTC, and prohibited from further violations of the Commodity Exchange Act and related regulations.
The CFTC cautions that victims may not fully recover their losses, as the defendants may lack sufficient assets. The agency states it will continue to pursue accountability for those who harm customers in the commodities markets.
Source: CFTC.gov
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