Utah Based Precious Metals Company Scammed Millions Out Of Investors

The Utah Office of the Attorney General has charged a Precious Metals dealer out of Salt Lake City in a Precious Metals Ponzi scheme. James McDonald, CFTC Director of Enforcement, states that “(a)s alleged, for at least a decade, the Defendants defrauded their friends, customers, and business associates out of more than $170 million…”

In 2018 the investors paid out $42 million towards the “Silver Pool.” Investors believed this silver pool bought and sold silver for them. Additionally, the defendants attempted to solicit new investors into this pool as recently as October 8th of this year.


The defendants are Gaylen Dean Rust and his company Rust Rare Coin, Inc. of Layton, Utah and Salt Lake City. They have allegedly defrauded over 200 people out of millions of dollars. The victims include investors from Utah and 16 other states. Commodity Futures Trading Commission, and Utah Department of Commerce: Division of Securities, charged Gaylen Dean Rust and his company Rust Rare Coin, Inc. (RRC). CFTC and the State of Utah combined efforts with Utah’s attorney general. A civil enforcement case will be heard in the U.S. District Court for the District of Utah, Central Division. COURT FREEZES ASSETS AND APPOINTS A TEMPORARY RECEIVER

On November 15th, Honorable Tena Campbell declared a restraining order to freeze any assets of the defendants and Relief Defendants. CFTC and the State of Utah will inspect all relevant records about the case. In the meantime, Jonathan O. Hafen will be the temporary receiver to oversee RRC. Additionally, Hafen will take control of the assets of Rust and the individual Relief Defendants.

The defendants allegedly concealed their fraud through false account statements and Ponzi scheme payments. Efforts of both the CFTC and law enforcement agencies to protect markets from fraud and ensure that financial crime doers were held accountable helped bring the case to light. The Utah Department of Commerce and Utah’s Attorney General all worked together on this case.


From 2008 through October of 2018, the Defendants tricked investors into believing that the Precious Metals Company was pooling investor money to enter into contracts of sale for silver. Defendants also told investors they would sell the silver when market prices increased and buy silver when market prices decreased. This would increase the amount and value of silver contained in the Pool. Investors believed their investments would increase in high-value amounts.


A “guarantee” of extremely high profits lured investors and prospective investors into this Ponzi scheme. Investors thought that by investing in silver in this way that they would see a better return on investment than doing it themselves. Defendants coaxed investors into the scheme. They made promises such as an average of 20-25% profit per year–sometimes as high as 40% per year. They also backed up these narratives with false account statements that showed trades made by defendants and how they profited. Investors were assured that the Silver Pool possessed about $77-80 million of silver. The silver was supposedly stored at Brink’s and Incorporated Brink’s depositories in Salt Lake City and Los Angelos


Defendants did not purchase silver. Instead, they used the money from investors to make payments to other investors, transfer cash to different companies owned by Rust, and for personal expenses.


Ill-gotten gains, civil monetary penalties, restitution, permanent registration, and trading bans, and a permanent injunction against’ further violations of the Commodity Exchange Act, CFTC Regulations and Utah Securities Laws are some of the disgorgement The State of Utah seeks. The CFTC acknowledges and appreciates the cooperation of several agencies. These include the Utah Department of Commerce: Division of Securities, Utah Attorney General’s office, the Federal Bureau of Investigations, U.S. Attorney’s Office for the District of Utah, Securities and Exchange Commission, and the Salt Lake City Regional Office.


When buying silver or other precious metals, it’s important to go with a company you can trust. Bullion Exchanges wants your investments to stay protected. This is why we guarantee the precious metals we sell. You can find 100% Authentic products, at fair prices, delivered straight to you. If you have questions about the precious metals buying process, we are here to help. Email us anytime at customerservice@bullionexchanges.com.


In addition, the CFTC has Fraud Advisories that state the warning signs of fraud. You can read ways to prevent scams through their Precious Metals Fraud Advisory. Buyers who suspect possible violations of commodity trading laws or other fraud can call the Toll-Free Hotline 866-FON-CFTC (866-366-2382). Visit CFTC Precious Metals Fraud Department for more information.

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