WILMINGTON, DE – Robert Leroy Higgins, owner of Argent Asset Group LLC and First State Depository Company, LLC, is facing charges of fraud in connection with a multi-million dollar precious metals scheme, the Commodity Futures Trading Commission (CFTC) announced Wednesday.
The CFTC filed a civil enforcement action in U.S. District Court for the District of Delaware against Higgins, Argent, and FSD, all based in Wilmington, Delaware. The complaint alleges a fraudulent scheme targeting at least 200 customers, misappropriating at least $7 million in funds and silver through a program called the “Maximus Program.”
On September 29, Judge Richard Andrews issued a statutory restraining order freezing the defendants’ assets, preserving records, and appointing a temporary receiver. A status hearing is scheduled for October 11.
According to the CFTC, the Maximus Program promised customers guaranteed monthly lease payments for the use of silver, either purchased by Argent or already owned by the customers. Lease payments were purportedly based on the amount of silver leased to Argent. Customers were allegedly falsely told their silver was securely stored by FSD, insured, and that their investments were guaranteed.
The CFTC alleges that, in reality, customer silver was not securely stored but was misappropriated by Higgins, Argent, and FSD. Funds intended for silver purchases were also allegedly misappropriated. The scheme extended beyond the Maximus Program, with the defendants accused of misappropriating other client assets and deceiving customers attempting to withdraw funds or transfer them to another depository.
Furthermore, the complaint alleges the defendants misrepresented the insurance coverage maintained by FSD, failing to adequately insure client assets despite guarantees made to the contrary. The CFTC seeks restitution, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.
“As this enforcement action shows, the CFTC will vigorously investigate and seek to hold accountable those who make false promises and misappropriate customer funds,” said Acting Director of Enforcement Gretchen Lowe.
The CFTC acknowledged assistance from the UK Financial Conduct Authority in the investigation. Erica Bodin, Michael Loconte, Brian A. Hunt, Michael Solinsky, and Rick Glaser of the CFTC’s Division of Enforcement are leading the case.
Source: CFTC.gov
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