The scheme resulted in solicitations exceeding $68 million from at least 450 investors nationwide.
Today, Secretary Michael Watson and Attorney General Lynn Fitch announced that Mississippi is participating in a consolidated enforcement action with the United States Commodity Futures Trading Commission (CFTC) and 27 state securities regulatory agencies that are members of the North American Securities Administrators Association (NASAA).
The CFTC and the 27 states announced the filing of a joint civil enforcement action in the U.S. District Court for the Central District of California against a precious metals dealer and its owner for orchestrating a $68 million fraudulent scheme targeting elderly persons nationwide.
The group alleged that between October 2017 and through at least July 2021, Safeguard Metals LLC (Safeguard Metals) and its principal, Jeffrey Santulan also known as Jeffrey Hill, solicited investors nationwide by touting precious metals at grossly inflated prices that were not disclosed.
Safeguard Metals is a Southern California-based company that sells investors self-directed retirement accounts that hold gold and silver. The company’s website states that by investing in precious metals, it is a way to “hedge against uncontrolled government spending and dizzying money printing by the Federal Reserve.”
“Mississippians should be able to invest their hard-earned money without the worry of fraudsters capitalizing on their uncertainty,” said Secretary Watson. “I am incredibly proud of our Securities team for being an integral part of this enforcement action and for taking action. We will continue to do our part to stop fraudulent schemes such as this one and to ensure the people we serve receive the honest financial advice and services to which they are entitled, especially when it comes to retirement money they have worked so hard to save.”
The CFTC and the state securities regulators seek the return of ill-gotten gains, civil monetary penalties, restitution, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA), state regulatory laws, and CFTC regulations.
“Defendants targeted seniors and those close to retirement age,” said AG Lynn Fitch. “They preyed on their fears and jeopardized their fixed incomes. Seniors have worked a lifetime with the hope of living comfortably in their retirement, and Mississippi will not stand for scamming them in order to turn a quick profit.”
The following NASAA state regulatory agencies are CFTC’s co-plaintiffs in today’s action: Alabama Securities Commission; Arizona Corporation Commission; Arkansas Securities Department; California Department of Financial Protection & Innovation; State of Connecticut Department of Banking; State of Florida, Office of Financial Regulation; State of Hawaii, Department of Commerce and Consumer Affairs; Idaho Department of Finance; Office of the Secretary of State, Illinois Securities Department; Indiana Securities Division; Kentucky Department of Financial Institutions; State of Maryland Ex Rel the Maryland Securities Commissioner; Attorney General Dana Nessel on Behalf of the People of the State of Michigan; Mississippi Secretary of State; Missouri Commissioner of Securities; Nebraska Department of Banking & Finance; New Mexico Securities Division; The People of the State of New York by Letitia James, Attorney General of the State of New York; North Carolina Department of the Secretary of State; Oklahoma Department of Securities; Oregon Department of Business and Consumer Services; South Carolina Attorney General; South Dakota Department of Labor & Regulation; Commissioner of the Tennessee Securities Department of Commerce and Insurance; Vermont Department of Financial Regulation; Washington State Department of Financial Institutions; and the State of Wisconsin.