Markets Wired

At the request of the Federal Trade Commission, a federal judge stopped the allegedly illegal practices of a defendant who helped operate a telemarketing scheme that is believed to have received more than $37 million by conning consumers into buying precious metals on credit without clearly disclosing significant costs and risks. The court also froze the assets of the defendant, Sam J. Goldman, pending a trial.

In May 2011, the FTC charged American Precious Metals LLC, Harry R. Tanner, Jr., and Andrea Tanner with violating the FTC Act and the FTC’s Telemarketing Sales Rule while selling precious metal investments. The court subsequently halted their allegedly deceptive practices, froze their assets, and appointed a receiver to oversee the business, pending a trial. In November 2011, the FTC added Goldman as a defendant.

The court order prohibits Goldman from misrepresenting that consumers are likely to earn high or substantial profits in a short time period on the precious metals sold by the defendants, or that the precious metals are low or minimal risk. The order also bars him from failing to clearly disclose to consumers, before they pay, material information such as the total fees, commissions, interest charges, and leverage balances that consumers are required to pay, or that consumers are likely to receive equity calls that will require them to pay more money or liquidate their precious metals. In addition, the order prohibits Goldman from violating the Telemarketing Sales Rule, and from selling or otherwise benefitting from customers’ personal information.

The preliminary injunction was entered by the U.S. District Court for the Southern District of Florida on December 28, 2011. (FTC File No. X110036; the staff contact is Dama Brown, FTC’s Southeast Region, 404-656-1361.)

For information about investing in precious metals, the FTC offers Investing in Gold? What’s the Rush?, Investing in Bullion and Bullion Coins and Investing in Collectible Coins.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.

(Precious Metals, Goldman PI)