(Adds quote from order, paragraph 4)
By Douwe Miedema
WASHINGTON May 22 The U.S. Commodity Futures
Trading Commission scored a legal victory on Thursday, as a
court ordered a group of precious metals firms and their owners
to pay $108 million in fines and restitution for fraud.
The Southern District Court in Florida said Hunter Wise
Commodities LLC and three related companies, as well as two of
their managers, defrauded thousands of retail customers, and
ordered them to pay $52.6 million in restitution.
The companies, and Fred Jager and Harold Edward Martin Jr.,
were also ordered to pay a civil monetary penalty of $55.4
million to the futures and swaps regulator.
"(Jager and Martin) purposefully decided to risk criminal
and civil liability by continuing Hunter Wise's fraudulent and
illegal operations," the court order said.
Senators last month scolded the CFTC for not doing enough to
prevent scam artists from luring retirees into risky investments
in precious metals - often in Florida.
Jager, Martin and other employees claimed to arrange loans
to buy gold, silver, platinum and other precious metals, the
order said, and charged high interest and storage fees for
metals that customers thought they had bought.
But in fact, no metal was ever bought, and more than 90
percent of retail customers lost money, the order said.
The CFTC settles the vast majority of the cases it
litigates. In the past three years, only two cases went to
trial, according to the agency. The CFTC won both.
(Reporting by Douwe Miedema; Editing by Andrea Ricci and Eric