Beverly Hills, CA – The Commodity Futures Trading Commission (CFTC) and the California Department of Financial Protection & Innovation (DFPI) have jointly filed a civil enforcement action against precious metals dealer Regal Assets LLC, its CEO Tyler G. Gallagher, and former President Leah Donoso, alleging a $21 million nationwide fraudulent scheme.
The complaint, filed in the U.S. District Court for the Central District of California, details accusations that the defendants misappropriated customer funds intended for the purchase of precious metals. A significant portion of these funds originated from customers’ tax-deferred retirement accounts, including IRAs, 401(k)s, and Thrift Savings Plans.
Regal Assets, a California-based limited liability company with offices in Beverly Hills and Waco, Texas, allegedly solicited funds from customers for precious metal purchases through self-directed IRAs. However, the CFTC and DFPI contend that over $21 million from more than 120 customers was misappropriated between November 2019 and October 2022.
According to the complaint, the defendants allegedly concealed the misappropriation through fraudulent misrepresentations and forged documents. Funds were reportedly diverted to cover Regal Assets’ business expenses, salaries and bonuses – including over $860,000 in precious metals for Donoso – Gallagher’s video gaming business, and his multi-million-dollar Beverly Hills home. The complaint also alleges the misuse of customer funds to pay down over $6 million in loans and to operate a Ponzi-like scheme by using new customer funds to pay older investors.
The CFTC and DFPI are seeking disgorgement of ill-gotten gains, civil monetary penalties, restitution for affected customers, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and related regulations, as well as state laws. Gallagher’s last known residence is in the Los Angeles area, while Donoso currently resides in Texas.
The CFTC has issued a Precious Metals Fraud Advisory to educate the public about potential scams and how to avoid them. The agency urges individuals to verify the legitimacy of companies and individuals offering precious metals investments.
Source: CFTC.gov
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