Newswires

California Regulators Sue To Stop $68M Metals/Coin Scheme Targeting Elderly

A Clearwater pharmacy owner was convicted of healthcare fraud.

Pasadena Star-News (CA)

State and federal regulators filed suit Tuesday, Feb. 1 against a Woodland Hills-based precious metals sales company and its owner for allegedly perpetrating a $68 million fraud scheme that targeted the elderly by advising them to cash out their life savings and retirement accounts to purchase highly inflated and overpriced metals and coins.Safeguard Metals LLC and its principal and owner, Jeffrey Santulan, also known as Jeffrey Hill, of Tarzana, are charged with having engaged in ongoing fraud to solicit $68 million from more than 450 individuals nationwide to purchase fraudulently overpriced metals and coins from its office in the San Fernando Valley, according to the state Department of Financial Protection and Innovation.

The lawsuit — which includes the state of California among plaintiffs — alleges that Safeguard Metals used false statements on its website, inflating its assets by billions and using fear tactics to motivate senior citizens to purchase the precious metals.

"Brazen attempts to target senior citizens or other vulnerable populations will not be tolerated in California," DFPI Commissioner Clothilde Hewlett said. "We hope the message is coming across loud and clear to the precious metals industry: We will not tolerate deception and fraud in the commodities industry and are committed to holding bad actors accountable for their actions."

The complaint, filed in conjunction with the federal Commodity Futures Trading Commission, seeks a permanent injunction to stop the allegedly deceptive and fraudulent practices, disgorgement, full restitution and civil monetary penalties.

The U.S. Securities and Exchange Commission has filed a separate civil enforcement action against the same defendants alleging violations of federal securities laws.

The lawsuit filed in Los Angeles federal court alleges that Safeguard Metals violated the federal Commodity Exchange Act by advising elderly "investors" to cash out their savings and retirement accounts to purchase overpriced metals and coins, sold by the company, according to the document.

The suit alleges that the company and its owner misrepresented their credentials and advised customers that the precious metals were a safe and conservative investment, compared to traditional retirement accounts that sales associates acting at the direction of the company claimed individuals could be frozen out of if the stock market were to crash.