Dallas-based Damien Moran and the precious metals dealer companies Crown Bullion, Inc. and Bright Future Financial LLC (also d/b/a Oakhurst Metals) have all been charged by the Commodity Futures Trading Commission (CFTC) for fraudulently soliciting customers to buy precious metals in self-directed individual retirement accounts (IRA), and for misappropriating the customers’ funds and assets.
More than 100 people, mainly elderly and retirement-aged, were targeted in the fraud scheme, and the defendants managed to fraudulently obtain more than $7m in total since March 2018.
“As alleged, the defendants defrauded victims out of their hard-earned retirement savings with deceptive claims of safe and secure precious metals investments through self-directed IRA accounts, but in fact, they misappropriated most of the funds,” said Director of Enforcement Ian McGinley “There is no room in the commodity markets for precious metals dealers who defraud their customers.”
Misappropriated the investor funds
According to the CFTC, Moran solicited individuals via radio advertisements, telephone, social media, and his companies’ websites to tout ‘the safety and benefits’ of purported precious metals investments.
The defendants then lured victims into contact with a telephone sales representatives, who claimed to be experts in this type of precious metals investment, and who guided their victims to invest via a self-directed IRA.
“Moran played upon victims’ fears of high market volatility and impending economic catastrophe due to the COVID pandemic and political elections to sell the purported security of investing in precious metals.”
CFTC Commissioner Kristin N. Johnson
The deposited funds were sent to the IRA custodians, which were hand-picked by the defendants. The defendants then issued fraudulent invoices to those custodians. Most of the funds were then misappropriated with only a fraction of the investment money being used to buy metals – most of which were often bought at vastly inflated prices.
“What makes Moran’s fraud – and others like it that I have called attention to before – particularly harmful is that according to the complaint he directed his unlawful attention toward predominantly elderly and retired persons with little investment experience, bilking them of their hard-earned retirement savings,” CFTC Commissioner Kristin N. Johnson commented.
“In this case, Moran played upon victims’ fears of high market volatility and impending economic catastrophe due to the COVID pandemic and political elections to sell the purported security of investing in precious metals. Instead, the money ended up in his personal bank accounts.”
“The defendants defrauded victims out of their hard-earned retirement savings with deceptive claims of safe and secure precious metals investments through self-directed IRA accounts, but in fact, they misappropriated most of the funds.”
Director of Enforcement Ian McGinley
On September 20, a statutory restraining order was entered against the defendants, which froze their assets and gave the CFTC immediate access to their books and records. With the charges, the CFTC seeks restitution of funds to the defrauded victims, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and permanent injunctions against further violations of the Commodity Exchange Act and CFTC regulations.
A preliminary injunction is scheduled by the court for October 3, 2023.