Attorney General James Sues Precious Metals Company and Owner for Defrauding Seniors Out of $68 Million
Safeguard Metals Charged Exorbitant and Deceptive Markup on Silver Coins
NEW YORK – New York Attorney General Letitia James today filed a lawsuit against a precious metals company — Safeguard Metals LLC — and its owner and manager, Jeffrey Santulan, also known as Jeffrey Hill, for defrauding investors, including many seniors, across New York and the nation. The lawsuit, filed by the U.S. Commodity Futures Trading Commission (CFTC) and a bipartisan coalition of 27 states, alleges that Safeguard Metals deceived nearly 450 investors nationwide by fraudulently soliciting nearly $68 million for precious metals and misrepresenting its exorbitant fees charged to investors.
“These investors may have been sold on the comfort of investing in precious metals, but Safeguard Metals tarnished their dreams,” said Attorney General James. “Today, we are holding Safeguard Metals accountable for its shameful conduct that preyed on older New Yorkers and robbed them of a worry-free retirement. Companies’ peddling in lies and deception for profit at the expense of hardworking New Yorkers will not be tolerated. New Yorkers can trust that my office is fully committed to protecting their wallets from fraudsters like Safeguard Metals.”
The lawsuit — filed in the U.S. District Court for the Central District of California — claims that the California-based firm and its owner and manager targeted elderly investors through online advertisements as well as on social media and lured them into transferring funds from their traditional individual retirement accounts (IRA) into self-directed IRAs. The company misrepresented the markups it charged investors on precious metals. These charges resulted in instant and substantial losses, with many investors losing a large portion of their investment funds immediately upon completing the transaction. The complaint alleges that Safeguard Metals and Jeffrey Santulan violated the Commodity Exchange Act.
Attorney General James’ action today follows an announcement earlier this year that her office secured $6 million from precious metals dealer Lear Capital, Inc. (Lear) and its founder, Kevin DeMeritt. In her lawsuit against Lear, Attorney General James alleged that the company persuaded investors — including many elderly residents of Western New York who were seeking to protect their retirement savings — to invest tens of millions in precious metals by fraudulently concealing millions of dollars in commissions the company charged investors. As part of the consent order resolving the lawsuit, Lear will modify its business practices in New York in addition to making the $6 million payment. The funds will be distributed to eligible New York customers harmed by Lear’s misconduct.
The Office of the New York Attorney General (OAG) encourages any investors who suspect they have been targeted by precious metals investment schemes to come forward by contacting the office’s Investor Protection Bureau by emailing Investor.Complaints@ag.ny.gov.
Joining Attorney General James and the CFTC in filing today’s lawsuit are securities and financial regulators and the attorneys general from various states, including Alabama, Arizona, Arkansas, California, Connecticut, Florida, Hawaii, Idaho, Illinois, Indiana, Kentucky, Maryland, Michigan, Mississippi, Missouri, Nebraska, New Mexico, North Carolina, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Vermont, Washington, and Wisconsin.
This matter is being handled by Assistant Attorneys General Tanya Trakht and Kenneth Haim, under the supervision of Acting Deputy Bureau Chief Shamiso Maswoswe and Acting Bureau Chief Scott J. Spiegelman — all of the Investor Protection Bureau. The Investor Protection Bureau is a part of the Division for Economic Justice, which is led by Chief Deputy Attorney General Chris D’Angelo and overseen by First Deputy Attorney General Jennifer Levy.