BOISE, Idaho — An investment scheme from Safeguard Metals LLC targeted Idaho seniors, according to a complaint filed in U.S. District Court.
The Idaho Department of Finance joined 26 other states and the Commodity Futures Trading Commission in the complaint against Safeguard.
The complaint alleges that Safeguard Metals and Jeffrey Santulan, aka Jeffrey Hill, operated a fraudulent business, attracting more than 450 people nationwide to invest a total of $68 million into precious metals, including nearly $1.3 million invested by Idaho residents.
"This is one of many large-scale precious metals investment schemes we've endeavored to stop since the pandemic began. Investors are advised to be particularly cautious when purchasing precious metals and to check for outrageously high commissions and markups, which we've seen as high as 30 to 70 percent," said Patricia R. Perkins, Director of the Idaho Dept. of Finance.
The complaint alleges that the scheme involved scare tactics, half-truths and other misrepresentations designed to entice people to buy overpriced silver coins with their retirement savings.
"As the market continues to fluctuate, we anticipate more fraudsters using fear and uncertainty to manipulate good people out of their hard-earned money," Perkins said.
The defendants have also been accused of failing to disclose the markup charges to investors, and failing to disclose to investors the risk of losing their money. In many of the cases, the market value of the precious metals purchased was substantially lower than the value of investors' retirement savings that were liquidated to help fund their purchase.
Investors were advised to liquidate their holdings at registered investment firms to fund the precious metals expenses, through self-directed individual retirement accounts. Those self-directed IRAs are different from traditional IRAs as they are directed by a custodian and do not afford the same investor protections.
"Idaho will continue to partner with fellow regulators to vigorously fight to protect consumers from this and other schemes to defraud," Perkins said. "Investors are advised to check the registration of all investment products and professionals, and ask tough questions about fees, markups, risks, and potential returns. If the answers seem too good to be true or don't make sense, protect your savings by just walking away."
The Idaho Dept. of Finance partnered with other regulators in October 2020 to pursue action against another precious metals company, TMTE Inc., also known as Metals.com, Chase Metals, and Barrick Capital. That scheme affected about 1,600 seniors across the nation and involved $185 million.
The department also urges investors to come forward if they suspect they've been targeted by similar precious metal investment schemes. Victims of fraud can contact the department on their website.
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