Court Penalizes Metals Dealer with $15M Fine on Fraud Scheme

A precious metals dealer and his company responsible for defrauding over 380 customers were fined $15.7 million in a federal court late Thursday, according to a CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term ‎statement.

Hannes Tulving, 64, of Newport Beach, California was charged in a case involving the ‎operation of a fraudulent precious metals vault, called The Tulving Company, Inc.

Court records show that from August 2013 to January 2014, Tulving was the sole owner of a California-based business that sold coins, bullion, and other precious metals over the internet. During this period, he executed a scheme to defraud investors throughout the United States by convincing them to place more than $150 million in metals orders.

Customers were lulled into the false belief that precious metals ‎had been purchased and were stored in Tulving’s vault, but $15 million worth of their bullion vanished over two years.

The coin dealer jailed

The complaint also charges Tulving and his company with making several misleading ‎representations to actual and prospective investors. As alleged, ‎the defendant assured the victims that they were pooling ‎their funds ‎for buying standard-sized bars of gold and ‎silver, while he was actually running a Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term. ‎

An estimated 400 victims nationwide were scammed out of close to $18 million, according to the complaint that accuses the ‎defendants of fraud, misappropriation, registration ‎violations, and issuing false statements.‎

Early in 2016, Tulving was sentenced to 30 months in prison after pleading guilty to one count of wire fraud in connection with the scheme. He was also ordered to pay a $10.8 million fine and repay his victims, who included many retirees, elderly, and military veterans.

Prosecutors said that instead ‎of buying the precious metals ordered by his customers, Tulving ‎spent the money on company expenses, investment activities ‎and for his own personal use and benefit. ‎