Mississippi joins lawsuit to protect seniors from $185 million precious-metals scheme

Mississippi has joined a multistate lawsuit alleging Metals.com and Barrick Capital Inc. solicited $185 million, including over $350,000 in Mississippi, from 1,600 seniors and other vulnerable investors nationwide by touting precious metals at grossly inflated prices that were not disclosed.

The Mississippi attorney general and secretary of state joined the Commodity Futures Trading Commission and 29 other states in filing the complaint Friday in the U.S. District Court for the Northern District of Texas.

“The defendants were preying on seniors and other vulnerable persons, grossly misrepresenting the value and likelihood of financial profit of the investments they were selling and scamming consumers out of their retirement savings,” Attorney General Lynn Fitch said in a statement. “I appreciate the work of the secretary of state in this matter, and we will continue to work together to protect the rights of Mississippi consumers.”

The complaint names Los Angeles, California-based companies TMTE Inc., also known as Metals.com, Chase Metals Inc., Chase Metals LLC, Barrick Capital Inc., along with Simon Batashvili, Lucas Asher and Tower Equity LLC. The defendants are accused of using cold calling, television, radio and social media advertisements designed to “instill fear in elderly and retirement-aged investors and build trust with investors based on representations of political or religious affinity.” Investors were advised to liquidate their holdings at registered investment firms to fund investments in precious metals bullion through self-directed individual retirement accounts and bullion coins, the complaint said.

“This historic joint effort between the CFTC and 30 state regulators is an important step toward rooting out fraud across the country,” said CFTC Chairman Heath P. Tarbert. “This case highlights just how geographically broad commodities fraud can be in our rapidly-evolving financial markets and how important it is for regulators at all levels of government to work together to pursue bad actors and protect market participants.”

The defendants also are accused of failing to disclose, among other things, the markup Metals.com and Barrick charged investors for their precious metals bullion products and that investors could lose most of their funds immediately upon completing a transaction. The defendants charged investors prices for gold or silver bullion averaging from 100% to more than 300% the melt value or spot price of that gold or silver bullion. In many cases, the market value of the precious metals sold to investors was substantially lower than the value of the securities and other retirement savings investors had liquidated to fund their purchase.

“They capitalized on investors’ fear of market instability and took advantage of hard-working Mississippians,” said Secretary of State Michael Watson. “Our investors suffered consequential losses from retirement savings, and it’s only right that we take action. We’re working closely with the attorney general’s office to ensure the victims of this case receive justice, and we encourage all investors to thoroughly scrutinize and research any investment opportunity or offer.”

The complaint requests the court to order the defendants to cease sales activity, return money to investors, and stop defrauding investors and violating federal and state laws going forward. The complaint also requests that a receiver be appointed to take over the companies to marshal funds for the benefit of investors across the country.

Metals.com and its agents have attempted to evade previous regulatory actions from 12 states by, among other tactics, changing its business name. Friday’s coordinated state and federal action to put a stop to the company’s efforts to continue to prey on elderly investors is the result of a multistate collaboration by members of the North American Securities Administrators Association, of which the Mississippi secretary of state’s office is a member, and the Commodity Futures Trading Commission’s Office of Cooperative Enforcement.

If you suspect you have been targeted by similar precious metals investment schemes, please contact the Securities Division at 601-359-1334.