SALT LAKE CITY — A federal decide has frozen the belongings of a Utah rare coin supplier after the Utah Division of Commerce and others accused the business and its owner of defrauding a minimum of 200 individuals of more than $one hundred seventy million since 2013.
A federal grievance was filed Thursday in Utah by the Securities and Trade Fee towards Rust Rare Coin, Inc. and owner Gaylen Dean Rust.
The Utah Division of Commerce says the company and Rust have defrauded clients in Utah and 16 other states, including receiving “no less than $forty two million from buyers in a pool that purportedly purchased and bought silver,” based on a press launch issued Friday by the Commerce Department along side the Commodity Futures Buying and selling Commission and Division of Securities.
On Thursday, U.S. District Decide Tena Campbell issued a restraining order freezing the belongings of Rust Uncommon Coin and permitting state and federal officials to “inspect all related data,” in response to the assertion.
The company is accused of tricking buyers since 2008 into believing it was “pooling investor cash for the aim of getting into into contracts of sale for silver. … (Rust Uncommon Coin) informed buyers and prospective buyers that they might sell silver held within the pool as market prices rose and purchase silver for the pool as market prices fell; thereby growing the amount of silver held within the ‘Silver Pool,’ as well as the worth of every investor’s share in that pool,” the assertion stated.
The Silver Pool, nevertheless, was a “sham,” in line with the assertion. Rust Uncommon Coin, nevertheless, “generated terribly excessive income, averaging 20 to 25 % per yr and typically as excessive as 40 % per yr or extra. The defendants offered buyers with false account statements.”
“As alleged, for at the very least a decade, the defendants defrauded their associates, clients, and enterprise associates out of more than $one hundred seventy million. The defendants allegedly concealed their fraud with false account statements and Ponzi funds,” Director of Enforcement James McDonald stated in a ready assertion.
Rust Rare Coin “misappropriated investor funds and used these funds to make payments to different buyers within the manner of a Ponzi scheme, transfer money to other corporations owned by Rust, and pay personal expenses,” in accordance with the assertion.