South Carolina Attorney General Secures $25.6 Million Judgment Against Safeguard Metals LLC for Defrauding Elderly Investors

Strategic Insights -

The U.S. District Court for the Central District of California has entered a final judgment imposing $25.6 million in restitution and an equal civil monetary penalty against Safeguard Metals LLC and its owner, Jeffrey Ikahn, for operating a fraudulent scheme targeting elderly and retirement-aged individuals. The scheme, which occurred from October 2017 to July 2021, involved soliciting approximately $68 million from at least 450 people for the purchase of precious metals, primarily silver coins. The court found that the defendants disseminated false and misleading information, failed to communicate material facts to customers, and fraudulently overcharged customers.

Key Takeaways:

  • The U.S. District Court for the Central District of California imposed a final judgment of $25.6 million in restitution and an equal civil monetary penalty against Safeguard Metals LLC and its owner, Jeffrey Ikahn.
  • The scheme, which occurred from October 2017 to July 2021, involved soliciting approximately $68 million from at least 450 people for the purchase of precious metals, primarily silver coins.
  • The court found that the defendants systematically and widely disseminated false and misleading information to customers, failed to communicate material facts to customers, and fraudulently overcharged customers.
  • Attorney General Alan Wilson stated that the court's final judgment provides meaningful restitution to investors harmed by the scheme and reinforces the Attorney General's commitment to protecting investors, especially those in vulnerable communities.
  • The case was brought by the CFTC in partnership with 29 state regulators, including South Carolina, and resulted in a Consent Order that found the defendants liable for employing a nationwide scheme.
  • The Consent Order also enjoined the defendants from future violations of the Commodity Exchange Act, as well as future violations of state laws and regulations set forth in the complaint.

Names and Organizations Mentioned:

  • Attorney General Alan Wilson
  • US District Court for the Central District of California
  • Safeguard Metals LLC
  • Jeffrey Ikahn
  • US Commodity Futures Trading Commission (CFTC)
  • South Carolina Office of the Attorney General
  • Securities Division
  • Alabama, Arizona, Arkansas, California, Connecticut, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Maryland, Michigan, Mississippi, Missouri, Nebraska, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Utah, Vermont, Washington, and Wisconsin

Statistics:

  • $25.6 million: amount of restitution and civil monetary penalty imposed by the U.S. District Court
  • $68 million: amount of money solicited by Safeguard Metals LLC from at least 450 people
  • 450: number of people solicited by Safeguard Metals LLC
  • October 2017 to July 2021: duration of the scheme
  • 29: number of state regulators involved in the case, including South Carolina

Sources:

  • US State of South Carolina (COLUMBIA, S.C.)
  • MIL-OSI USA News (http://milnz.co.nz/mil-osi-aggregation/)
  • South Carolina Office of the Attorney General