On Thursday, the Commodity Futures Trading Commission (CFTC) filed a complaint to the District of Delaware against First State Depository Company, LLC (FSDC), Argent Asset Group LLC and Robert Leroy Higgins charging them with fraud in connection with a multimillion-dollar precious metals scheme.
According to the complaint, FSDC is a Delaware company that describes itself as a private depository that offers a range of precious metals custody, shipping and accounting services to commercial and individual customers in the rare coin and precious metals market.
Argent is a Delaware company that buys, sells and leases coins, bullion, bars and other precious metals and claims it is a “leading numismatic and precious metals trading firm.” The complaint also states that Robert Leroy Higgins is the owner, manager and operator of both FSDC and Argent. The CFTC states that neither company nor Higgins has ever been registered with the Commission in any capacity.
The CFTC alleges that since January 2014 FSDC and Argent , through the control of Higgins, fraudulently solicited and misappropriated at least $7 million in funds and silver from at least 200 customers. The complaint states that the funds and silver were misappropriated through a deceptive scheme called the “Maximus Program.”
The agency purports that the Maximus Program promised customers monthly lease payment in exchange for the use of the customers silver which they either provided to Argent or Argent bought on their behalf. Further, customers were told that the customers silver purchased by or provided to Argent would be securely stored by FSD.
However, the complaint states that the defendants misappropriated their clients assets and misled and deceived those clients when they attempted to withdraw their assets or transfer them to another depository. Accordingly, the CFTC filed the present complaint seeking restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction for the defendants alleged violation of Commodity Exchange Act (CEA) and CFTC regulations.
In addition to the complaint the CFTC filed an accompanying press release, stating “the CFTC will vigorously investigate and seek to hold accountable those who make false promises and misappropriate customer funds.” The press release also stated that a statutory restraining order freezing assets controlled by the defendants was issued on September 29th, and a status hearing for that order is scheduled for October 11.
