Precious Metals Scheme Investigated, Charged
Alleged $10 million deceptive investment scheme predominantly targeted elderly consumers
The Federal Trade Commission filed a complaint last month against Sterling Precious Metals LLC, Matthew Meyer, Francis Ryan Zofay, and Kerry Marshall. The FTC charges the defendants with running a telemarketing operation that used deceptive investment schemes to defraud victims, most of them elderly, of over $10 million.
According to FTC allegations many seniors lost retirement savings believing they were making “safe” investments in the precious metals market. The FTC contends that Sterling Precious Metals and the other defendants used deceptive telemarketing schemes to lure consumers to invest in precious metals using credit without knowing the significant costs and risks of doing so.
The FTC claims the defendants promised the consumers involved that they could earn large profits short term by investing in precious metals with very little risk of loss. The FTC alleges the defendants did not tell the victims of the likelihood that they would have to pay more money later to prevent loss of their investment. The FTC also claims the investments were typically not profitable and actually carried a high risk of loss.
The FTC's complaint against Sterling Precious Metals LLC, Matthew Meyer, Francis Ryan Zofay, and Kerry Marshall alleges the defendants failed to clearly disclose the investment total cost to the consumer and often failed to disclose that about 80 percent of the purchase would be financed through a loan with interest. The FTC allegations claim the defendants misrepresented, or failed to clearly disclose, the fees and commissions consumers would be charged or that they would likely receive equity calls on their investment accounts. Equity calls would occur once a consumer's equity dropped below a certain level. Once the equity call was issued the consumer had to invest more money or allow the investment to be liquidated at a loss. In some instances, consumers were not told their accounts were liquidated.
The FTC alleges most of the defendants' customers lost money and that consumers lost the equity in their investments through the accumulation of fees and commissions, including storage fees and interest charges on the leveraged portion of their accounts. The FTC charged the defendants with violating the FTC Act and the FTC's Telemarketing Sales Rule.
If you, or a loved one, are thinking of investing in the precious metals market, here are links to safe investment considerations, information, and advice from the FTC:
- Investing in Gold? What's the Rush?
- Investing in Bullion and Bullion Coins.
- Investing in Collectible Coins.
Remember, if an offer sounds to good to be true - it probably is!
To file a complaint visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad.
Published July 4, 2012