Deerfield Beach, FL – May 17, 2011 – Sammy J. Goldman, along with Harry Robert Tanner, Jr., and their firm American Precious Metals, LLC (APM), have been charged with fraud by the U.S. Commodity Futures Trading Commission (CFTC), the agency announced today. The charges stem from a scheme to defraud retail customers investing in precious metals – gold, silver, platinum, and palladium – on a leveraged basis.
The CFTC’s complaint, filed on May 10, 2011, in the U.S. District Court for the Southern District of Florida, alleges that APM and its principals engaged in a “massive fraudulent scheme” beginning around July 1, 2007. The defendants purportedly took in over $23 million from customers participating in a “leverage program” requiring down payments as low as $5,000.
According to the complaint, APM falsely claimed to purchase precious metals on behalf of customers, finance those purchases, and store the metals in a secure depository. In reality, the CFTC alleges APM never bought or sold any metals for clients, nor did it secure financing or storage. Instead, after collecting approximately 40% of the initial investment as commission, the remaining funds were allegedly funneled to a third party who did not purchase metals, provide loans, or arrange storage for any APM customer.
The CFTC also alleges that APM made false and misleading statements about the profitability and risks associated with the leverage program. The firm has never been registered with the CFTC.
The CFTC is seeking preliminary and permanent injunctions against the defendants, as well as disgorgement of ill-gotten gains, civil monetary penalties, and bans from trading and registration. This case marks the third action taken by the CFTC in recent weeks against companies offering leveraged precious metals investments.
The Federal Trade Commission (FTC) also announced charges today against APM, Tanner, and his wife, Andrea Tanner, for violating the Telemarketing and Consumer Fraud and Abuse Prevention Act and the Telemarketing Sales Rule. The FTC alleges the defendants falsely promised guaranteed profits and minimal risk to customers, and obtained a temporary restraining order.
The CFTC acknowledged the assistance of the Florida Office of Financial Regulation, the South Florida Securities and Investment Fraud Initiative, the FTC, and the United Kingdom Financial Services Authority in this investigation.
Source: CFTC.gov
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