TMTE, Inc.

Agency: Commodity Futures Trading Commission/CFT
Description: On September 22, 2020, the Commodity Futures Trading Commission (CFTC) and 30 state regulators that are members of the North American Securities Administrators Association (NASAA) filed a joint civil enforcement action in the U.S. District Court for the Northern District of Texas against two precious metals dealers and their companies TMTE, Inc., d/b/a Metals.com, Chase Metals, LLC, Chase Metals, Inc. (collectively "Metals.com"), Barrick Capital, Inc. and its principals, Lucas Asher a/k/a Lucas Thomas Erb a/k/a Luke Asher and Simon Batashvili with executing an ongoing nationwide fraud that solicited and received more than $185 million in investor funds to purchase fraudulently overpriced gold and silver bullion. Tower Equity, LLC is also charged as a relief defendant.

On September 22, 2020, the U.S. District Court for the District of Northern District of Texas entered a restraining order freezing the assets of Matals and the relief defendant and permitting the CFTC and the states to inspect all relevant records. The court also appointed a receiver to take control of Metals.com, Barrick, and Tower Equity, as well as the assets of Asher and Batashvili.

The CFTC investigated this matter in parallel with state securities regulators. This enforcement action is the largest joint filing in CFTC history with state regulators, and the first resulting from a 2018 information sharing agreement between the CFTC and NASAA, which represents state and provincial securities regulators in the United States, Canada, and Mexico.
The complaint alleges that, from at least September 1, 2017 to the present, the defendants fraudulently solicited and received over $185 million in customer funds—including more than $140 million in retirement savings—from at least 1,600 persons throughout the United States for the purpose of purchasing precious metals bullion. The defendants targeted a vulnerable population of elderly persons with little experience in precious metals. Through their fraudulent solicitation, the defendants deceived customers into purchasing precious metals bullion at grossly inflated prices that bore no relationship to the prevailing market price. The overcharges averaged from 100 percent to more than 300 percent over the prevailing market price. In the end, nearly every customer lost the vast majority of their funds deposited with the defendants.

As the complaint alleges, to perpetuate their fraud, when questioned by customers about the value of the precious metals bullion they purchased, the defendants falsely claimed that the precious metals bullion were rare and carried a premium far above the base melt value. In fact, the precious metals bullion were significantly less valuable than the defendants claimed.

In the continuing litigation against the defendants, the CFTC and the states seek disgorgement of ill-gotten gains, civil monetary penalties, restitution, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act, CFTC regulations, and state laws, as charged.

Details of the complaint can be found

here. Details of the restraining order and appointment of receiver is available also.