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Buyer Beware! Precious Metals Scams Will Continue to Increase

Sun-Sentinel/Tribune Writer: Jon Burstein

Tarnished Dreams

Little regulation, lots of risk can leave some gold investors on shaky ground.

More than 45 firms have opened in Broward and Palm Beach counties since 2007 offering gold investment opportunities.

At least 23 South Florida precious metals firms are being investigated by the state.

“This is an area where it’s real easy to mess with investors.” Frank Widmann Director of securities for Florida’s Office of Financial Regulation

With the price of gold at near or all-time highs, South Florida has become a national hotbed for companies operating in a largely unregulated niche of the precious metals industry, where some customers have reported losses in the tens of millions of dollars, a Sun Sentinel investigation has found.

In Broward and Palm Beach counties alone, more than 45 firms have opened since 2007, offering clients the chance to buy gold and other precious metals via heavily financed transactions.

In an environment devoid of federal licensing or reporting requirements, convicted felons and people with checkered regulatory pasts have been among those setting up shop.

“They took every dime I had,” said Richard Ray, a Georgia man who lost $46,300 with Spyker Consulting, a Deerfield Beach-based precious metals firm supervised by two convicted felons. No criminal charges have been filed against Spyker officials over investors’ losses, but one of the company’s founders is now facing prison time after a FBI sting revealed he lied to his probation officer about his role in Spyker and two other metals firms.

The Florida Office of Financial Regulation has ongoing investigations into at least 23 area companies marketing opportunities to buy bullion and have it stored at a secure location. Hundreds — if not thousands — of Americans have entrusted their money to South Florida precious metals companies.

In the past 18 months, clients and creditors of seven local precious metals businesses have claimed losses of more than $54 million, a Sun Sentinel review of more than 2,000 pages of court documents shows. Among the developments cited:

The collapse of Lake Worth-based Global Bullion Exchange with 1,400 investors losing more than $29.5 million. Owner Jamie Campany has admitted in a sworn statement that money “distributed to customers came from funds provided by other customers,” and metals weren’t purchased as promised. Campany is being sued by the company’s receiver for fraud. He has not been criminally charged.

A Broward judge froze the bank account of Pompano Beach-based JDC United Metals Inc. after a 70-year-old California retiree filed a lawsuit accusing the company of defrauding him of more than $627,500 in six months.

The bankruptcy of three related Miami companies — Certified Inc., Global Bullion Trading Group Inc. and WJS Funding — with more than $22 million in claims filed against them, court records show.

Industry defended

Defenders of this segment of the precious metals industry maintain it offers the public a chance to buy gold and silver as tangible hedges against uncertain economic times and a deflating dollar.

“We have a terrific program and, like anything else, it depends on who you are doing business with,” said Robert Acocella, president of Monolith Bullion, a Boca Raton-based precious metals firm. “I personally will speak to every client that comes on board and we custom tailor a strategy to meet their needs.”

Jeffrey Schuler, co-founder of Liberty International Financial Services of Fort Lauderdale, said his clients receive full explanations about how the metals are purchased. He said he prefers that clients have the bullion delivered to their homes.

“All of the firms that don’t have complaints, no one hears about them,” he said.

Monolith Bullion and Liberty International Financial Services are not being investigated by the Office of Financial Regulation.

Acocella and Schuler were the only two industry executives who agreed to be interviewed after the Sun Sentinel contacted 20 South Florida firms selling precious metals through financed transactions. Other companies declined comment or did not return phone calls.

How firms work

The metals firms have been opening at a rate of nearly one per month, setting up in office suites from Hollywood to Jupiter and relying on websites and telemarketing to draw in customers.

Many of the firms operate this way: Clients are offered a chance to buy precious metals and have them delivered to their homes or stored in a secure location. Most choose storage. Customers are also told they can buy “on leverage” — meaning they can obtain financing so they can purchase more metal.

For example, a customer could put down $1,000 to buy $5,000 worth of gold. The financing comes from separate businesses called “clearing firms” or “clearing houses,” that have pre-existing relationships with the precious metals firms.

Under such leveraged arrangements, if metal prices fall by a certain amount, clients are subject to a “margin call,” meaning they must pony up more cash — or risk losing their money.

A Federal Trade Commission official testified before Congress last year that the agency has seen a rise in unscrupulous telemarketers pitching highly leveraged precious metals sales to consumers who don’t understand how the deals work or the risks involved.

“The telemarketers charge hefty commissions and other fees that significantly reduce or completely eliminate the value of the consumers’ initial investments,” Lois Greisman, an associate director in the FTC’s Bureau of Consumer Protection, told the House Subcommittee on Commerce, Trade and Consumer Protection.

Frank Widmann, director of securities for Florida’s Office of Financial Regulation, told the Sun Sentinel that the volatility of this market can make it treacherous territory for inexperienced gold buyers.

“This is an area where it’s real easy to mess with investors,” he said.

Minimal regulations

Customers of some South Florida companies question whether their money was ever even used to buy precious metals. Campany, head of Global Bullion Exchange, acknowledged in his sworn statement that not only were metals never bought, but that the “clearing firm” being used — Diversified Investment Group — was a shell company that he created himself.

Four men who worked for The Bullion Trading Group, which had offices in West Palm Beach and Stuart, were indicted last year on federal charges of defrauding clients out of about $1 million by allegedly forging documents that falsely showed money was being invested in metals. Two of the defendants have each pleaded guilty to a fraud charge, while the other two have pleaded not guilty.

Since these gold companies advertise they buy and sell actual bullion — rather than do paper transactions — they have fallen outside the jurisdiction of the Commodity Futures Trading Commission, the federal agency that oversees the commodity and financial futures market.

The metals firms don’t need to register with any federal agency to do business and employees don’t require licensing other than state approval to engage in telemarketing. That means someone with no financial background or training can start soliciting customers to buy gold and silver. (A conviction for a financial crime can bar a felon from getting a telemarketing license.)

Within the last year, seven precious metals businesses in South Florida have been forced by the state to apply for telemarketing licenses after inspectors issued cease-and-desist orders to end unregistered phone solicitations, said Sterling Ivey, spokesman for the state Department of Agriculture & Consumer Services.

One of the companies that was registered to engage in telemarketing was Spyker Consulting, which was founded by two men who met in federal prison while serving time in separate white-collar criminal cases, court records show. Luis Ferreira and Eugene Cabrera ran the firm with Ferreira’s mother listed on state documents as the president, court records show. Ferreira admitted in court papers that he used a variety of aliases in dealing with customers at Spyker and two other precious metals firms he helped start.

Ferreira pleaded guilty last month to conspiracy to commit witness tampering, acknowledging he lied about his role in the companies to his probation officer. He likely faces no more than three years in prison when he is sentenced May 20.

More federal oversight of the gold firms appears to be on the horizon when a new law takes effect in July. Companies that sell precious metals in leveraged deals will have to deliver the gold within 28 days to the customer or a location where the metals are easily accessible so the buyer can verify that they actually exist. If the gold isn’t physically delivered, the transactions will fall under CFTC jurisdiction, and companies and their brokers will need to be federally licensed to work in commodities.

Daniel Roth, president of the National Futures Association, a selfregulating trade organization for the U.S. futures industry, said he hopes the new law will close loopholes that have allowed metals companies offering leveraged purchases to operate without strong oversight.

“We’ve been advocating this for a long time,” he said.

Schuler, of Liberty International Financial Services, said he also welcomes greater regulation.

“If there is leverage involved, the CFTC should be involved,” he said.

The court documents obtained by the Sun Sentinel show senior citizens have suffered some of the biggest losses when it comes to area precious metals firms. In the case of Global Bullion Exchange, of the 20 clients who reported losses greater than $225,000, 10 are older than 60 and three others have died.

James Haston, a 70-year-old California retiree, confided more than $627,500 to JDC United Metals, believing he was capitalizing on the rising price of gold, said his attorney, Heather Rutecki. JDC United Metals chief executive officer Danny Reynolds repeatedly visited Haston, even staying at his house and calling him “Dad,” according to a Broward Circuit Court lawsuit filed by Haston in December.

When Haston sought to pull money out, the lawsuit claims, Reynolds disconnected his phone and couldn’t be found.

A person responding to the email address posted on JDC United Metals’ website wrote the Sun Sentinel that Haston’s lawsuit was frivolous and misleading. Broward Circuit Judge Victor Tobin ordered a JDC United bank account frozen in December, but the company has not filed a legal response to Haston’s suit.

Two other retirees, Esther MacDonald-Gurl and Brian Gurl of North Carolina, sued Deerfield Beach-based American Precious Metals in February, alleging they lost more than $105,000 in a month with the company. One of the company’s founders previously was sanctioned by the National Futures Association for running an investment business where employees made misleading sales pitches, according to the Gurls’ lawsuit.

Attempts by the Sun Sentinel to speak to a representative from American Precious Metals were unsuccessful. The company reports on its Website that “85 percent of our business is repeat business and referrals.”

Gurl, 74, said he and his wife have been in shock since losing so much money.

“This was our nest egg,” he said.

All Things Considered – John’s Commentary

None of us should be surprised.  Large telemarketing firms buy lists filtered to identify individuals with a high metals buying propensity.  They employ two types of tele-sales people, “openers” who are the relational, warm and fuzzy people, and “closers” who handle the obvious.  I do know of one individual precious metals “leverage firm” that is highly reputable.  The vast majority are not.

Individuals increasingly desire to participate in the market, but are concerned about security and storage.  Many succumb to greed and they leverage their purchases through financing.  You cannot take personal possession of financed metals.  Thus providing a recipe ripe for the con artist.

Action to take: Split your physical gold and silver purchases 50/50.  Purchase your base amount of silver in pre-1965 90% silver coinage.  In gold, there are a number of very low premium items available for as little as 3% over spot.

Quote of the day: “Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few, gold has been the asset of last resort.”  –  Antony C. Sutton

  1. Do you buy pre-1965 silver coins for their silver content? If so, what is your pricing structure?

    Thank you.

    • Yes, we do buy pre-1965 silver and most other forms of silver as well. John has contacted you with pricing, please let us know if you have any additional questions.

  2. Stay away from leveraged or buying on margin with precious metals. You are guaranteed to lose money. Stay away from investing with any individuals who lack credentials, training, experience and references. Even with all that, we have to be careful.

    The CFTC recommends reporting fraud to BBB, State Attorney, and other agencies that are so inundated with fraud they can’t move a finger.

  3. Good article. Report fraud to BBB, State Attorney’s office, and CFTC. Buying on margin, leverage, or even storage is likely a scam. Those companies that have no complaints, is only because they are new boiler rooms.

  4. Would like info on Oakmont Financial 1880 N.Congress Ave Boynton Beach Florida 33426

    • Hello Gary, We don’t personally know the Oakmont Financial organization. If you are committed to buying leveraged gold, please contact our office and we will refer you to the one local firm that we know to be trustworthy. We ourselves do NOT sell/promote leveraged gold – please be aware of the risk involved.

  5. Yes

  6. I have bought silver from these people Theclearing firm is Josephcharlesam.Getting bad feeling!!!

  7. Wow, this was like reading about my resume. I was a federal Informant for almost all of these firms, and several others, and to tell you the truth, the FED’s literally Know, EVERYTHING, I MEAN EVERYTHING on ALL OF THESE GUYS. Well, after almost two years of working these cases, I found that the problem is not Intel, and neither is it jurisdiction or law, its the simple FACT that the Federal Reserve, IS NOT the US GOVERNMENT, although it controls the US Government policy and action in many ways. Wall Street does not DESIRE, YOU to own Gold, Gold is funneled to Leaders, Billionaires, and THE FEDERAL RESERVE. Gold is Self, True, it can not be commissioned on by Traders, or Wall Street brokers in the Future, a one time sale, so the system does not reward those who show you, guide you to the Bullion Desk. If people learned how to buy and hold gold at a fair price, then well that would lead to awareness, that would lead to the fall of Wall Street, and ALL OF THE PAPER, commissionable ways you have been shown how to buy gold in the past, leverage(not gold), collectables, Not a smart way to buy and hold gold), Gold Options(not gold), Gold Stock(not gold), Gold in your IRA’s(ha, not likely gold). Its endless and the truth again, YOUR COUNTRY HAS SOLD YOU OUT, YOUR POLICY MAKERS HAVE SOLD YOU OUT, to feed the Federal Reserve. So, leverage scams are needed as a detour for the people to keep not believing in Gold, Self, Independence, Freedom, and to KEEP THEM paying Wall Street Commissions to Keep up the game and keep up the biggest con on man in this planets, history.

  8. I was actually thinking about investing into leveraged silver. After reading this article I don’t think I am going to do anything that is leveraged. I am disabled and with very little money I am not in any way going to risk losing. I can see how someone can get sucked into this. You put 5k in and as it drops they keep hitting you up for more with the potential hope for making more.


  10. Oakmont Financial of Boynton Beach, Fl, was a total scam. One of the front salesperson, Ty Lalley, creates a sales promise, calling many times. After luring one with the sales pitch, you are then turned over to another ‘consultant,’ Todd Young, and gleaned from there by charging an ‘administration fee of $1000.00 and then an ‘opening fee’ of $250.00, taking 25% of the investment off the top. The balance of the investment was loss within a months time. In my opinion, there is no integrity with this organization. I agree with the comments given, do not deal with this type of investment.

  11. In regards to Liberty International Financial Services, CEO Christopher Anzalone Resides in an apartment in Collins Avenue , Sunny Isles Beach Florida. Trump Royale. Information given through a source. Through research it has been known that Vice president ( Jeff Shuler) of (LIFS) worked for Spyker Consulting which was busted by the federal government. CEO might go by the name of Alex Alonso.

  12. Is Monolith Bullion a trustworthy agent for leveraged buying of silver?

    • Hi Nick,
      We do not recommend ANY leveraged gold/silver firms any more. They are all being scrutinized by the SCC and CFTC for deceptive investment practices. We can’t encourage you strongly enough to make yourself highly aware of the risks involved in leveraged gold and silver. Just ask all of the leveraged metals clients that just had MAJOR margin calls on the recent gold and silver price corrections. Buy beware!

      You are welcome to call me at 1-800-390-8576 if you want to discuss this further.

      John Fisher

  13. Leverage is just there to cover a margin call. in the case that you bought with leverage and the price which you bought at drops or the stock you bought at goes down you are still covered, so you don’t have to add more money into your account in order to cover /hold your position in the case you don’t send money to cover the margin you will lose your position.
    leverage is like a back up car battery ,or jumper cables , or spare tire.

    if you didn’t buy on leverage and there’s a margin call you are not covered ,so you have to ad money into your account,because you don’t have enough money in the account to back up the margin call. this should be made clear.yes?

    margin calls happen all the time,so every investor knows about margin calls.
    leverage isn’t there to hurt you. it’s just there to cover you. most stock broker companies selling securities does generally up to 4/1 no higher & their commission generally up to 4% regulated one time fee but will charge a fee to trade.

    now with respect to buying gold silver. if you buy metals as a physical metal you don’t need to buy on leverage; leverage is only good if you are buying non physical metals to trade, otherwise don’t buy on leverage for physical metal. besides the purpose of buying metal is is that metal buying is meant to be a long term investment .Buying gold silver is like buying a rolex watch not to hold in & out for 120 days.

    Bottom line buying metals to trade is a stupid investment idea. you have to know that there’s a lot of down side to buying metals such as the market could go down ;dollar can go up or down, interest rates eventually will have to go up which is bad for metals, bond market stocks etc. there’s a lot of upside & down side risk to buying metals .when you buy metal basically what you are doing is betting on the falling dollar,so you are hoping that the dollar or econ will crash, so you can clean up on your little hedge. metal buyers love cheap money & QE.

    I have to laugh at some of the commentators talking about how they got scammed on margin calls or leverage & lost money now they are suing.
    you lost money trading your silver gold not because of the investment company but because of what the CME group did you lost money because the CME group raised their margin calls 2x on gold & silver which crashed silver. silver was at around almost 50.00 $, but what happened was that the CME group then moved in & raised margin calls on silver 2x which then crashed silver back down to where it is now around 27 dollars .we are talking about a 15 $ drop ,so anyone who bought silver to trade,& didn’t have enough leverage in the account either got killed or had to send in more money to cover the position,but in both cases people who bought silver got crushed anyway.same goes for gold gold almost hit 2000$
    btw if you are buying physical metal not to trade; you shouldn’t of ever bought on leverage in the first place, you buy the metal ,& hold on to it, ,so don’t trade it.
    so you shouldn’t care what the CME group does. them metals firms which sold you metals scammed you. I’m pretty sure most of you bought palladium & got screwed, because most metal firms were pitching it while it was hot.

    now with respect to Spyker consultants that’ company never pitched or sold silver or gold they mostly dealt with selling palladium which was promoted heavy on leverage account. palladium is the dumbest investment ever to go long on.they took at least 15% off the bat in commissions,& charged like 50 $ per trade from what I read on line. I am not an insider.

    most of them so called precious metals firms charge up to 15/20 % commissions & charge big bucks per trades. anyone who buys metals from a metals firm is an idiot .
    most of the ones that got scammed who bought with spyker bought palladium.
    Most metal’s firms out there have gone out of business.but if you want to buy metals talk to your stock broker he can get you into metals stock. I’M A STOCK BROKER I’VE SOLD SILVER /GOLD STOCK .& only charged 2% commission, not the 15% commission which metals firms charge which is alot of money right off the bat.

    I know monolith Bullion Group,cause I looked them up they get an A- rating with the BBB. they had an office in Brooklyn & Florida they started out selling palladium ,but I don’t know what they are selling now. maybe silver & buying gold. palladium rally is over .most metals firms gone out of bussiness cause they charge too much commissions.

    I don’t know who Robert John Acocella is.or if he helped start monolith Bullion Group .hmm is he the former Ceo monolith? I know Joe capano is the founder of the company ,because he started the Brooklyn branch, but is now out of business in Brooklyn. maybe joe capano hired Mr Acocella.

    I hope this help some folks here.

  14. Invested $27000 in silver through Derek Bridges of Empire Sterling Metals in April-June 2011. When I requested all monies be returned in Oct 2011 I received $1800.

  15. my husband “invested $153,500.00 with Palm Beach Capital. within the first month, lost it all. we recently got a check from them for $2,424.00 Even that was a battle.

    • Dear Lorie,
      We are so sorry to hear about your experience and financial loss with Palm Beach Capital. Thank you for being willing to share it with others so that they might avoid the same experience in the future.
      Best Regards,
      John Fisher

  16. My husband has been buying silver from World PMX Fort Lauderdale, FL. I can not find information on this company other than “Their website”. I have been scouring the internet trying to check on them before he invests anymore money. Can anyone help me?

    • They are a leveraged bullion firm – they make their money charging excessive commission and structuring the financing. They want you to finance the metals because that is how they make their money. You are not able to take possession of the gold and silver unless you pay for it in full (which they will not encourage) because you don’t really “own” the metals. Most of these shops have been closed down by the state because they never really purchase the full amount of the physical metals that their clients finance.

      Here is just a snippet from page 10 of their 32 page application. Buyer Beware!

      “WPMX and its employees and suppliers are not agents for Customer and owe no
      fiduciary duty to Customer.

      WPMX may not be able to contact you at all times that you would like. These
      and other circumstances may make it impossible at times for WPMX to stay in
      close touch with you concerning your account. Therefore, it is your
      responsibility to monitor your account and to stay in touch with WPMX
      concerning your account and market conditions. Do not wait to be contacted.

      Any representations that Customer will be notified or that Customer’s precious
      metal will be sold at particular price levels if the market turns against Customer
      are not authorized by WPMX and may not be relied upon.

      Neither WPMX nor its representatives guarantee, assure or promise future
      market movement, prices, coin premiums, bid/ask spreads or profits.”

  17. As of today, I am out $40,000, 4000 ounces on margin with Monolith Bullion and the company holding/financing the bullion decided to pull out and sold all of my ounces. This is not right. They are thieves.

    • Rusty, we are sorry to hear you were a victim of another “leveraged” gold and silver bullion firm. Thank you for posting, as many can learn from your experience. To all – NEVER buy precious metals on margin if you want to rest assured that you actually own the gold and silver you are buying. Take physical possession and store it properly.

  18. Like Rusty I have been scammed by Monolith Bullion for 10K. I have tracked the holding company, Amerifirst, to a single owner and hope to get some legal action. Is there any way to re-coop the money as a capital loss?

    • Hi Steve,

      Again, we are sorry to hear about your loss with Monolith Bullion. You should contact the Florida State Attorney General to see if there is any recourse at the state level. Keep us informed as to what you find so we can share it with others that have been scammed through leveraged bullion deals. Taking physical possession of your metals from a dealer like us is your only real protection in the metals market. We hope you are able to recover some of your losses!

  19. just a follow-up, MGB web site no longer exists, and the BBB now states that they are not accredited when they were back in Feb. ?

  20. Curious If anybody has more information on Diversified Precious Metals.
    Particularly whether or not there is a joint lawsuit against them. Lost 40000 with them they told me that I wasn’t losing money and that all the silver was in a pool account. I was not happy losing half my money within the first month. (according to their statements) They also said I could monitor my investment via their website. False as well. When this started happening I asked for them for delivery of my silver (which they said was an option). What followed after that was a lot of dropped calls and broker unavailable answers. Eventually they did send me a check for 3400.00 of the 45000.00

    • Dear Harry,
      We are so sorry to hear about your horrific experience with Diversified Precious Metals. We did a little web research and found a Fort Lauderdale firm that may or may not be affiliated: It might be worth contacting them to see if they are affiliated and to determine if you have any recourse.

      You can be a testimony to others to NEVER allow a dealer or firm to sell them gold/silver in pool accounts or on leverage. We firmly believe that most, if not all of these firms never purchase the metals they claim they are holding for you. We know this because we are one of the dealers that they would source the physical metals from – and they rarely do so.

      If we can help you to safely take physical delivery of your precious metals in the future we would welcome the opportunity to do so. We never like to hear about people being so gravely taken advantage of such as you experienced! Regards, John Fisher


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