When investigators went into the vault where Robert Higgins claimed he kept half a million of his customers’ silver coins, all they say they found were empty boxes filled with IOUs.
Investigators with the Commodity Futures Trading Commission say the empty vault was the result of a complex coin-leasing scam in which Higgins claimed he was buying and storing American Eagle coins but pocketed tens of millions of dollars of investors’ money instead.
On Monday, the CFTC announced that two firms run by the 68-year-old coin dealer were ordered by a federal judge in Delaware to pay $146 million in restitution and fines. The ruling also ordered the firms, Argent Asset Group LLC and First State Depository Company LLC, shut down and barred Higgins from ever working in the commodities industry again.
Higgins separately faces federal criminal charges for fraud, tax evasion and perjury.
A message left with an attorney representing Higgins in the matter brought by the CFTC wasn’t immediately returned.
According to court filings, the scam dated back to 2014 and continued through 2022, during which more than 200 investors were allegedly defrauded out of $113 million in money they had given Higgins, purportedly to buy silver coins.
The scam allegedly lured customers in through a fraudulent silver coin-leasing offer called the “Maximus Program.” Investors were convinced to buy the one-ounce, U.S. Mint-issued pure silver coins through Argent, and then store them at a vault in Delaware run by First State Depository.
The “Maximus Program” would then offer customers a lease payment of as much as 20 cents per coin to allow Argent the right to use them for short-term sales with the guarantee the coins would be replaced.
Investigators say none of this ever appears to have happened, although it was not entirely clear if Higgins ever bought coins for customers as he had promised or if he had just never replaced them once they were loaned out.
After the CFTC suit was filed in 2022, the court ordered an administrator to take over the operation. When investigators entered the vault, they discovered that more than 500,000 silver coins and 9,000 gold coins that were supposed to be there were, in fact, missing. In their place were rows and rows of boxes assigned to customers that contained little more than IOUs, according to court papers.
Investigators say Higgins deceived his customers by sending them phony monthly statements and then stalling when any would seek to redeem their deposits. They also say Higgins claimed the coins were all insured, but that the policy he had was insufficient to cover the value of the coins he claimed to be storing.
Court documents related to the criminal case stated that Higgins had claimed at times that his businesses had been under heavy financial strain and he was struggling to pay off loans he had taken using coins as collateral.
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : MarketWatch – http://www.marketwatch.com/news/story.asp?guid=%7B20C06575-04D4-B545-7223-AFFE38E561F6%7D&siteid=rss&rss=1