“Prosecutors: Precious metals investments were $25 million Ponzi scheme”
Federal prosecutors leveled fraud charges Tuesday against the former operator of several South Florida precious metal trading firms, with an estimated 1,400 investors losing more than $25 million.
The companies, operated by Jamie Campany, 47, of Delray Beach, flourished as the price of gold, silver and platinum rose in uncertain economic times.
Campany’s Lake Worth-based corporation, Global Bullion Exchange, promoted itself as a leader in precious metals investments, marketed itself nationally through telephone solicitations and websites, and had operations in Palm Beach, Broward and Miami-Dade counties.
It was all a Ponzi scheme, with earlier investors ultimately being repaid with money from new investors, federal prosecutors alleged Tuesday. Many of the investors were elderly and put in their life savings, according to related civil court documents.
For more than three years, Campany used various corporate entities to conduct the fraud, according to prosecutors, until Global Bullion Exchange collapsed in the fall of 2009.
Campany intends to plead guilty in the case, said his attorney, Christopher Bruno, of Fairfax, Va. Each of the nine counts of wire and mail fraud is punishable by up to 20 years in prison and a $250,000 fine.
Campany has cooperated with the court-appointed receiver who took control of the remains of Global Bullion Exchange in an effort to recover money for investors, Bruno said.
“He has accepted responsibility since December 2009 and has worked diligently with law enforcement and the receiver in this case to help investors recoup their lost investments,” he said.
Investors from around the country thought they were buying gold and silver that would be stored at a secure location until they wanted to sell the metals. For the vast majority of investors, no metals were ever purchased, prosecutors say.
Campany is scheduled to surrender Wednesday in U.S. District Court in Fort Lauderdale for his first appearance.
All Things Considered – John’s Commentary:
There are currently 28 precious metals firms under investigation in the state of Florida alone. It is actually very simple to protect yourself from becoming a victim of an unethical firm.
Virtually all of the “scammers” promote one of two angles:
1. First, they promote the purchase of gold that they will physically store on your behalf so that you don’t have to deal with cumbersome storage, risk or loss, theft, fire and easy liquidity should you choose to sell. All of this is “provided” for one or two percent of the total value per year.
2. The second pitch is for the purchase of leveraged gold. You simply put down a small amount of money to control a large amount of physical gold – supposedly. For instance, you can control 100 ounces of gold valued at $150,000 for as little as ten percent, or $15,000 and finance the rest. As the price goes up, your profit goes up by a factor of 10. Of course it cuts the other way as well. In essence, you are engaging in a futures transaction. Supposedly, the gold, all 100 ounces, is on deposit, controlled by you. Very often it does not exist and has never been purchased on your behalf.
It is very easy to protect yourself. Either take physical possession or store your metals in an approved, insured depository. There are two depositories that we recommend. Please encourage your friends and family that are on the fence that they can safely participate in the market by simply owning and holding the metal themselves.
IF YOU CAN’T HOLD IT, YOU DON’T OWN IT! For if you aren’t holding it, somebody else is – or worse yet they may not be.
