Gold has been among the most lucrative investments in recent years, more than doubling in value since 2007. But a Deerfield Beach-based precious metals dealer apparently never believed the industry’s standard credo, “Past performance is no guarantee of future results.”
A federal judge has slapped Premier Precious Metals, Inc., and its owner, Anthony J. Columbo, with a temporary restraining order and frozen the company’s assets after regulators accused the business of falsely making extravagant promises to its customers, many of them senior citizens who lost retirement savings in the process. The lucrative scheme raked in more than $9 million over the last two years, the Federal Trade Commission announced Wednesday.
Columbo, 57 of Boca Raton, conned his elderly clients into buying precious metals on credit without clearly disclosing the investments’ significant costs and risks involved, the FTC alleges.
The accused, along with his companies Premier Precious Metals, Rushmore Consulting Group and PPM Credit, Inc., used “high-pressure sales tactics to convince consumers to purchase precious metals and, in the process, provide consumers with an inaccurate and incomplete description of their sales offer,” the FTC alleged in its five-count federal complaint.
The listed phone numbers for all three companies have been disconnected and their websites taken down. Further efforts to reach Columbo for comment were unsuccessful.
Those who were able to speak with Premier Precious Metals representatives before the FTC got involved tell of assurances they received from the company of risk-free high returns — even though the trading prices of precious metals are actually volatile and unpredictable.
Furthermore, cold-callers would play down — or completely omit — the fine print. Buyers had no idea that they were buying just a portion of the asset promised, and had to pay for up to 75 percent of their gold, silver or platinum order with an interest-charging loan. When investors fell behind on their loan payments or failed to make good on equity calls, their assets were often liquidated.
The federal order, filed in the Southern District of Florida, doesn’t technically shut these companies down, but does forbid them from misrepresenting the true nature of their transactions, and compels them to tell clients that profits were not guaranteed with low risk. They have also been ordered to preserve their records and report new business, pending an April 3 hearing.
This isn’t the first time Columbo has been accused. In 2007, the National Futures Association suspended Columbo’s membership in the independent commodity-trading organization for one year after finding his business — Ace Financial Group — “utilized a high-pressure approach and made misleading and deceptive statements in their solicitations of prospective customers,” according to the NFA’s website.
Read more here: http://www.miamiherald.com/2012/03/28/2719597/south-florida-gold-dealer-accused.html#storylink=cpy