Kelvin Burgos, Precious Metals Fraud, Florida 2016
Miami, FL – September 20, 2016 – The U.S. Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Kelvin Burgos, president of Florida-based Apex Asset Advisors, LLC, alleging a fraudulent precious metals scheme targeting retail customers. The case, filed in the U.S. District Court for the Southern District of Florida, accuses Burgos and his company, KB Concepts Group, LLC d/b/a Apex Asset Advisors, LLC, of illegally soliciting investments in leveraged, margined, or financed precious metals transactions.
According to the CFTC complaint, between September 2012 and February 2013, Apex, under Burgos’ direction, collected approximately $456,977 from at least 10 customers for these transactions. Of that amount, roughly $156,783 was retained by Apex as commissions, markups, storage fees, and interest. The CFTC alleges that Apex operated as an unregistered Futures Commission Merchant (FCM) by accepting customer orders and funds without proper registration.
The transactions are considered illegal under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which prohibits leveraged, margined, or financed transactions in precious metals unless actual delivery of the metals occurs within 28 days. The CFTC claims that no such delivery ever took place for Apex customers.
This case is linked to a previous CFTC enforcement action against Hunter Wise Commodities, LLC, filed in December 2012, alleging similar illegal precious metals transactions. In February 2014, the court found that Hunter Wise lacked the actual metal to fulfill customer orders and violated the Commodity Exchange Act. The Eleventh Circuit Court of Appeals later affirmed the ruling and upheld the CFTC’s jurisdiction in the matter. The district court subsequently found Hunter Wise and its owners guilty of fraud, resulting in millions of dollars in customer losses.
The CFTC is seeking injunctive relief, disgorgement of ill-gotten gains, and civil penalties against Burgos and Apex. Specific penalty amounts were not immediately disclosed in the press release.
Source: CFTC.gov
Source: https://www.cftc.gov/PressRoom/PressReleases/7448-16