CFTC exposed $2.7m Precious Metals Fraud scheme

June 8, AtoZForex - The U.S. Commodity Futures Trading Commission (CFTC) announced that the US District Court of Florida has filed an Order containing proceedings and settling charges against three residents. The individuals are reported to perform illegal off-change precious metals fraud scheme.

Christian Dorrian, Jeffrey Slemmer and Adam Roth accompanied by their Florida - based companies Dorrian Enterprises LLC, Slemmer Enterprises LLC, and Roth Investment Group LLC, have been charged with the fraudulent scheme. The individuals aligned with the legal persons/companies got charged with illegal off-exchange transactions in precious metals, activities related with trading an unregistered futures commission merchants (FCMs) and fraud schemes.

Precious metals fraud scheme totals $2.7 million

The precious metals fraud scheme itself appears to be performed under the names Berkley Hard Asset Group, Berkley Rare Diamonds and Berkley Hard Assets. These names have been operating in the market since 2012, as reported in CFTC filing. During the period from 2012 until now, the above-mentioned individuals managed to ill-gain over $2.7 million from at minimum 60 customers.

The clients of the companies were convinced they are buying precious metals. In reality, the three individuals were making false promises as purchases were made. Additionally, the clients were promised to have their funds stored at a ‘depository’ on their behalf, which also did not take a place. The individuals were using investors’ assets for other purposes.

The scheme used by the individuals called ‘bait-and-switch’ and works by promoting the purchases of precious metals to clients, then urging them to sell their implied precious metal holdings and purchase rare diamonds alternately. In the end, the customers are left holding ‘rare’ diamonds worth much less than their presented value and only a small part of the initial investment. 

CFTC seeks disgorgement of ill-gained profits

The U.S. Commodity Futures Trading Commission seeks disgorgement of ill-gained profits of Christian Dorrian, Jeffrey Slemmer and Adam Roth and their companies. Additionally, CFTC punishes individuals with civil monetary penalties and restitution for the benefit of clients.

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