Georgia joining multi-state effort to stop investment fraud scheme
Georgia is joining 29 other states in a coordinated crackdown on an alleged fraudulent precious metals scheme that has solicited more than $180 million from seniors and other investors.
Attorney General Chris Carr and Secretary of State Brad Raffensperger announced Wednesday, Sept. 30, that Georgia and the other states have joined the U.S. Commodities Futures Trading Commission in a federal court petition seeking enforcement action against Beverly Hills, Calif.-based Metals.com.
“We are concerned that the defendants capitalized on investor fear of market instability and economic uncertainty causing investors to suffer substantial losses from retirement savings,” Carr said. “We will continue working together to protect older Georgians.”
“Preying on the elderly and vulnerable is terrible at any time,” Raffensperger added. “Doing so during pandemic-driven economic uncertainty compounds the egregious wrong done to Georgia’s seniors.”
The petition alleges that TMTE Inc., which goes by several other names including Metals.com and Barrick Capital Inc., sold precious metals at grossly inflated prices, targeting elderly investors through traditional and social media and providing unregistered investment advisory services designed to “instill fear in elderly and retirement-aged investors and build trust with investors based on representations of political or religious affinity.”
Investors were advised to liquidate their holdings at registered investment firms to fund investments in precious metals through self-directed individual retirement accounts and bullion coins, the petition said.
The defendants also are accused of failing to disclose, among other things, what Metals.com and Barrick charged investors for their precious metals bullion products and that investors could lose the majority of their funds immediately upon completing a transaction. The defendants charged investors prices for gold or silver bullion averaging from 100% to more than 300% the melt value or spot price of that gold or silver bullion.
In many cases, the market value of the precious metals sold to investors was substantially lower than the value of the securities and other retirement savings investors had liquidated to fund their purchase.
In addition to claims under federal law, Georgia alleges the defendants also violated state securities laws, including failure to register as investment advisors, fraud in the sale of commodities and securities, and the unlawful sale of commodities. Losses to Georgia investors were about $5 million.
The petition asks the court to order the defendants to cease sales activity, return money to investors, and stop defrauding investors and violating federal and state laws going forward.
The attorney general’s and secretary of state’s offices are encouraging investors to come forward if they suspect they have been targeted by similar precious metals investment schemes. Please, email registrations@sos.ga.gov or call 470-312-2640.