4 arraigned in big bucks, precious metals bullion Ponzi-scheme
A broker--previously disciplined by the CFTC and the National Futures Association in a 1993 commodities options scheme--is again facing charges for a Ponzi-scheme involving precious metals bullion investment.
Posted: Thursday , 16 Aug 2012
RENO (MINEWEB) -
Four men were scheduled to be arraigned Wednesday before a federal magistrate in Miami, Florida, on charges of conspiracy to commit mail and wire fraud in connection with a precious metals bullion investment scheme.
The indictment was brought by federal and state agencies including the U.S. Attorney for the Southern District of Florida, the FBI, the U.S. Postal Inspector Service and the State of Florida's Office of Financial Regulation.
Arthur John Schlecht, 53, of Boone, North Carolina, but formerly of Miami-Dade County, Bart Gomer, 66, of Sunrise, Florida, Ricardo Jorge Padron, 52, and Carlos Rodriguez, both of Miami, were accused of engaging in a long-term conspiracy to commit fraud through their operation of three corporations, Global Bullion Tracking Group, WJS Funding, d/b/a Capital Asset Management, and Certified Inc., d/b/a Certified Clearing.
These businesses claimed to be investment brokerage firms offering investors the opportunity to invest in gold, silver, platinum, and palladium bullion, which would be stored for the investors in depository vaults.
The indictment claims that, instead of purchasing the physical bullion as promised, the defendants "merely established investment accounts for Capital Asset Management with a broker/dealer in London and used the account to purchase derivative contract investments in precious metals but never actually purchased any physical metal for the investors."
The defendants allegedly used investors' funds for their personal benefit. "In this way, certain defendants allegedly diverted millions of dollars of investors' funds to Arthur Schlecht, his family and third parties to pay for, among other things, maid services, personal tax obligations, salary, social security contributions, home and vacation home construction, landscaping, remodeling, interior furnishings, automobile purchase, restaurant dining, personal travel expenses, clothing and jewelry," said a news release filed by U.S. Attorney Wilfredo A. Ferrer, FBI Acting Special Agent in Charge Jeffrey C. Manzanec, Postal Inspector in Charge, Henry Gutierrez, and Linda B. Charity, interim commissioner, State of Florida's Office of Financial Regulation.
"Thereafter, in order to continue to operate and conceal the companies' insolvency, the defendants engaged in a Ponzi-scheme, through which they used new investors' money to pay off previous inventors and to cover operating expenses," the officials claimed.
When the alleged Ponzi-scheme collapsed, Global Bullion Trading Group, Capital Assessment Management, and Certified, Inc., all filed for bankruptcy.
Ironically, Commodity Futures Trading Commission records reveal Schlecht was the subject of a consent order entered in July 1996 by the U.S. District Court for the Southern District of Florida, which ordered a permanent injunction against Schlecht and his Concorde Trading Group. The CFTC claimed that Concorde reportedly committed fraud, in the course of soliciting customers through telemarketing to purchase options on commodities, specifically oil and gas.
Concorde and Schlecht were ordered by the court to pay $1.5 million in restitution to former Concorde customers.
A National Futures Association complaint filed on Aug. 18, 1993, alleged that Concorde traded over 2,800 customer accounts "and that over 90 percent of these customers lost all or substantially all of their money, while Concorde collected $12.8 million in commissions.