ND Securities Dept. joins enforcement action against a 'precious metals' scheme
North Dakota’s Securities Department has joined a national enforcement action to stop a fraudulent precious metals scheme that targets the elderly.
The complaint alleges Safeguard Metals, LLC touted precious metals at grossly inflated prices. In this case, it was silver coins.
Securities Department chief investigator Michael Daley said the company convinced these people to move their retirement money out of 401K and Roth IRA retirement accounts, and into buying the coins.
"They try and get investors to be fearful of the stock market, and convince them that precious metals — gold and silver — are a safer place," Daley said in an interview.
Daley said the "melt value" of the silver was far below the purchase price. He said the company claimed these were rare coins.
"They were very common coins, available on the market for much less than what was being advertised," Daley said.
Daley said three North Dakota investors were defrauded out of approximately $178,000. He said restitution is being sought through the court action, filed in federal court in California.
Daley said these kinds of scams are becoming more common.
"When they're offered these investments, people should contact the Department to see if they're properly registered to be selling commodities or securities, and if there's any history that would cause them to not want to do business with those companies," Daley said.