Silver-coin IRA seller settles with CFTC over alleged $68M fraud

investmentnews.com:

Another company is settling fraud charges from regulators amid a widespread crackdown on precious metals dealers that target retirees.

The firm, Safeguard Metals, along with its sole owner, Jeffrey Ikahn, allegedly defrauded customers to whom it marketed gold IRAs of $68 million, according to two separate lawsuits brought by the Securities and Exchange Commission and the Commodity Futures Trading Commission and numerous states in early 2022.

Safeguard misrepresented key figures about itself to more than 450 customers, and it used a markup averaging 50% more than it disclosed on the coins it sold — most often silver collectibles it steered clients toward, the plaintiffs alleged in the lawsuits. For example, it grossly overstated its assets under management, claiming them to be $11 billion when the figure was close to $75 million, court records stated. It also allegedly inflated its employee head count and qualifications.

The company and Ikahn, who previously was known as Jeffrey Santulan, agreed with CTFC and numerous states to permanent injunctions from violating securities laws as well as to pay yet-to-be-determined restitutions and monetary penalties. A similar agreement was reached in July with the SEC.

Between 2017 and 2021, the firm dramatically understated the markups on the products it sold, and its sales reps pressured older customers to move money out of their retirement accounts to buy silver coins, according to court records. For example, one Arkansas retiree was told by a sales rep that “the stock market was in for a major correction and was overvalued,” that “the Federal Reserve was devaluing the dollar by excessive printing and how the rise of inflation was going to make precious metals more valuable,” and