CFTC alleges paper gold scam
The CFTC in this press release allege that the defendants "conducted illegal, off-exchange commodity transactions, and deceived customers in connection with financed transactions in precious metals." I've listed the defendants who have websites:
Hunter Wise Commodities
Lloyds Commodities
Blackstone Metals Group
Newbridge Alliance
United States Capital Trust
The key text from the press release (my emphasis):
According to the CFTC complaint, the defendants claim to sell physical metals, including gold, silver, platinum, palladium, and copper, to retail customers in retail commodity transactions. Under the defendants’ retail commodity transactions investment contract, customers allegedly make a down payment on certain quantities of physical metals, usually 25 percent of the total purchase price. Defendants allegedly claim to arrange loans for the balance of the purchase price, and advise customers that their physical metals will be stored in a secure depository.
The complaint further alleges that these statements were false, and that the defendants do not purchase any physical metals, arrange loans for their customers to purchase physical metals, or arrange for storage of physical metals for any customers participating in their retail commodity transactions. Instead, all the transactions are just paper transactions, according to the complaint. Defendants allegedly do not own or sell metals to customers; customers are charged storage and insurance fees on metals that do not exist; and are charged interest on loans, which are never made by the defendants.
I'm surprised the gold blogosphere hasn't picked up and run with this story, particularly the bits in bold. Maybe they have given up on the CFTC on finding scams so don't bother to check their site.
Interesting to look at the websites. They all look slick on the outside but what I find interesting is that their "about us" sections are mostly motherhood statements with little or no firm history, nor any directors or officers listed. That is a red flag to me.
Hunter Wise Commodities
Lloyds Commodities
Blackstone Metals Group
Newbridge Alliance
United States Capital Trust
The key text from the press release (my emphasis):
According to the CFTC complaint, the defendants claim to sell physical metals, including gold, silver, platinum, palladium, and copper, to retail customers in retail commodity transactions. Under the defendants’ retail commodity transactions investment contract, customers allegedly make a down payment on certain quantities of physical metals, usually 25 percent of the total purchase price. Defendants allegedly claim to arrange loans for the balance of the purchase price, and advise customers that their physical metals will be stored in a secure depository.
The complaint further alleges that these statements were false, and that the defendants do not purchase any physical metals, arrange loans for their customers to purchase physical metals, or arrange for storage of physical metals for any customers participating in their retail commodity transactions. Instead, all the transactions are just paper transactions, according to the complaint. Defendants allegedly do not own or sell metals to customers; customers are charged storage and insurance fees on metals that do not exist; and are charged interest on loans, which are never made by the defendants.
I'm surprised the gold blogosphere hasn't picked up and run with this story, particularly the bits in bold. Maybe they have given up on the CFTC on finding scams so don't bother to check their site.
Interesting to look at the websites. They all look slick on the outside but what I find interesting is that their "about us" sections are mostly motherhood statements with little or no firm history, nor any directors or officers listed. That is a red flag to me.
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