Four Charged in Precious Metals Investment Scheme
|U.S. Attorney’s Office August 09, 2012|
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; Jeffrey C. Mazanec, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI); Henry Gutierrez, Postal Inspector in Charge, United States Postal Inspection Service; and Linda B. Charity, Interim Commissioner, State of Florida’s Office of Financial Regulation, announce the unsealing of an indictment charging Arthur John Schlecht, 53, of Boone, North Carolina, and formerly of Miami-Dade County; Frederick Bart Gomer, 66, of Sunrise; Ricardo Jorge Padron, 52, of Miami; and Carlos Rodriguez, 35, of Miami, with conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349. In addition, Schlecht was charged with wire fraud, in violation of Title 18, United States Code, Section 1343. Schlecht was arrested earlier today by FBI agents in Boone, North Carolina, and made his initial appearance in federal court this afternoon in Charlotte, North Carolina. Schlecht was ordered to appear in Miami federal court on August 15, 2012, before U.S. Magistrate Judge Patrick White. The remaining defendants are expected to surrender in court next week.
According to the allegations in the indictment, the defendants engaged in a long-term conspiracy to commit fraud through their operation of three corporations, Global Bullion Trading Group Inc., WJS Funding Inc., d/b/a Capital Asset Management, and Certified Inc., d/b/a Certified Clearing. These businesses claimed to be investment brokerage firms offering investors the opportunity to invest in gold, silver, platinum, and palladium bullion, which would be stored for the investors in depository vaults. The indictment alleges that, instead of purchasing physical bullion as promised, the defendants merely established investment accounts for Capital Asset Management and Certified Inc. with a broker/dealer in London and used this account to purchase derivative contract investments in precious metals but never actually purchased any physical metal for the investors.
To perpetuate the scheme and conceal the fraud from the investors, the defendants allegedly engaged in a variety of tactics, including attempts to hide Arthur Schlecht’s ownership and control of Global Bullion Trading Group Inc. and Capital Asset Management, so that investors would not discover Schlecht’s negative regulatory and disciplinary history with the Commodity Futures Trading Commission and National Futures Association.
According to the charges, instead of using the investors’ money to buy the purported precious metals, the defendants used the funds for their personal benefit. In this way, certain defendants allegedly diverted millions of dollars of investors’ funds to Arthur Schlecht, his family, and third parties to pay for, among other things, maid services, personal tax obligations, salary, Social Security contributions, home and vacation home construction, landscaping, remodeling, interior furnishings, automobile purchases, restaurant dining, personal travel expenses, clothing, and jewelry. Thereafter, in order to continue to operate and conceal the companies’ insolvency, the defendants engaged in a Ponzi scheme through which they used new investors’ money to pay-off previous investors and to cover operating expenses. Eventually, as the Ponzi scheme collapsed, Global Bullion Trading Group Inc., Capital Asset Management, and Certified Inc. filed bankruptcy petitions in the United States Bankruptcy Court for the Southern District of Florida.
Mr. Ferrer commended the investigative efforts of the FBI, U.S. Postal Inspection Service, and Florida’s Office of Financial Regulation. In addition, Mr. Ferrer thanked the Commodity Futures Trading Commission and National Futures Association for their assistance in this case. The case is being prosecuted by Assistant U.S. Attorney Peter B. Outerbridge.
An indictment is only an accusation, and a defendant is presumed innocent until and unless proven guilty.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.