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AG Nessel Partners with CFTC, 26 State Securities Regulators to Stop $68 Million Precious Metals Scheme
February 01, 2022
LANSING - Michigan Attorney General Dana Nessel joined a consolidated enforcement action to stop a fraudulent precious metals scheme that used misleading solicitations to obtain over $68 million in retirement funds from at least 450 investors nationwide.
The action was taken by the Commodity Futures Trading Commission (CFTC) and 26 state securities regulators in filing a complaint in the United States District Court for the Central District of California alleging Safeguard Metals, LLC and Jeffrey Santulan, AKA Jeffrey Hill solicited investors nationwide by touting precious metals at grossly inflated prices that were not disclosed.
"It is so important to do your research before investing in anything," Nessel said. "Investors must be diligent in asking about the fees, markups or spreads, risks, and potential returns. If the answers seem too good to be true or don't make sense, that's a sign it's not worth your money."
The investors in this case were advised to liquidate their holdings at registered investment firms to fund investments in precious metals, bullion, and bullion coins through self-directed individual retirement accounts. Self-directed IRAs should not be confused with traditional IRAs or other retirement vehicles.
The defendants are accused of failing to disclose the markup charge for their precious metals bullion products and that investors could lose the majority of their funds once a transaction was completed. In many cases, the market value of the precious metals sold to investors was substantially lower than the value of the securities and other retirement savings investors had liquidated to fund their purchase. In Michigan, investors turned over in excess of $2.8 million of their retirement funds to purchase precious metals from Safeguard Metals in the execution of this national scheme. Many Michigan investors liquidated their existing retirement accounts, which contained securities, to obtain funds to purchase the metals.
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