Precious metals dealers TMTE, Chase Metals, and Barrick Capital face fraud charges
The CFTC and 30 state regulators charge Los Angeles precious metals dealers in ongoing $185 million fraud.
The United States Commodity Futures Trading Commission (CFTC) and 30 state regulators that are members of the North American Securities Administrators Association (NASAA) today announced the filing of a joint civil enforcement action in the United States District Court for the Northern District of Texas against two precious metals dealers and their companies for perpetrating a fraudulent scheme targeting elderly persons nationwide.
The complaint charges TMTE, Inc., d/b/a Metals.com, Chase Metals, LLC, Chase Metals, Inc. (collectively “Metals.com”), Barrick Capital, Inc. and its principals, Lucas Asher a/k/a Lucas Thomas Erb a/k/a Luke Asher and Simon Batashvili with executing an ongoing nationwide fraud that solicited and received more than $185 million in investor funds to purchase fraudulently overpriced gold and silver bullion.
Tower Equity, LLC is also charged as a relief defendant.
On September 22, 2020, The Honorable Judge David C. Godbey of the U.S. District Court for the District of Northern District of Texas entered a restraining order freezing the assets of the defendants and the relief defendant and permitting the CFTC and the states to inspect all relevant records. The court also appointed a receiver to take control of Metals.com, Barrick, and Tower Equity, as well as the assets of Asher and Batashvili.
The complaint alleges that, from at least September 1, 2017 to the present, the defendants fraudulently solicited and received over $185 million in customer funds – including more than $140 million in retirement savings – from at least 1,600 persons throughout the United States for the purpose of purchasing precious metals bullion. The defendants targeted a vulnerable population of elderly persons with little experience in precious metals.
Through their fraudulent solicitation, the defendants deceived customers into purchasing precious metals bullion at grossly inflated prices that bore no relationship to the prevailing market price. The overcharges averaged from 100% to more than 300% over the prevailing market price. In the end, nearly every customer lost the vast majority of their funds deposited with the defendants.
The defendants falsely claimed that the precious metals bullion were rare and carried a premium far above the base melt value. In fact, the precious metals bullion were significantly less valuable than the defendants claimed.
The CFTC and the states seek disgorgement of ill-gotten gains, civil monetary penalties, restitution, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act, CFTC regulations, and state laws.
