CFTC Obtains Over $18M in Restitution and Penalties in Florida Precious Metals Fraud Case

The Commodity Futures Trading Commission (CFTC) announced that the U.S. District Court for the Southern District of New York has entered final judgments resolving its enforcement action against three individuals and three Florida entities over a fraudulent precious metals scheme. The court entered a consent order imposing a permanent injunction and equitable remedies against Ross Baldwin and his inactive firm, National Coin Broker, Inc. This follows an earlier default judgment order against Robert Jeffrey Johnson, Kathleen Hook, Precious Commodities Inc., and NCB Wholesale Co. Together, the orders require the defendants to pay a combined $6,923,919 in restitution on a joint and several basis. Additionally, the defendants subject to the default judgment were ordered to pay an $11.5 million civil monetary penalty. Under the court orders, all defendants are permanently prohibited from committing further violations of the Commodity Exchange Act and CFTC regulations, and they have been issued permanent trading and registration bans. The enforcement action, initially filed by the CFTC on July 1, 2021, stems from a deceptive operation running from approximately June 2014 through at least October 2019. During this timeframe, the defendants solicited millions of dollars in cash and silver from customers through a purported precious metals leasing program branded as the "Silver Lease Program." The scheme also resulted in a parallel criminal action in the U.S. District Court for the Southern District of New York. In that case, Johnson pleaded guilty to wire fraud, Hook pleaded guilty to conspiracy to commit wire fraud, and Baldwin pleaded guilty to wire fraud, conspiracy to commit wire fraud, and making false statements to CFTC officials. The CFTC acknowledged the assistance of several partner agencies in the investigation, including the U.S. Attorney’s Office for the Southern District of New York, the FBI, the U.S. Mint, and the UK Financial Conduct Authority. The regulator reiterated its warning to investors to verify the registration status of any financial entity through the National Futures Association's BASIC system before transferring funds.