Scammers Who Defrauded Seniors Out of Millions Sued by FTC
Harry R. Tanner, Jr. and his wife, Andrea Tanner, the FTC has charged, ran a telemarketing scheme that conned senior citizens into buying precious metals on credit without disclosing the costs and risks involved -- including the fact that victims were usually forced to pony up more money or risk losing their entire investment.
The FTC said the Tanners and their company, American Precious Metals LLC, of Deerfield Beach, Fla., fleeced elderly victims out of more than $37 million dollars. Pending trial, a federal judge has shut down the Tanner's company, placed it in receivership and frozen the defendant's assets.According to the FTC's complaint, the Tanners targeted elderly consumers with a get-rich-quick scheme that promised huge profits by investing in precious metals such as silver, gold, platinum and palladium. American Precious Metals' telemarketers used strong-arm sales tactics to convince consumers they were being offered low-risk investments that stood to quickly double or triple in value.
American Precious Metals' sales pitches and marketing materials touted precious metals as low-risk investments due to the fact bars, bullion and coins are tangible, physical assets that tend to rise in value during times of economic uncertainty.
But despite the hard-sell tactics and other lies the Tanners fed their customers, they never used their victims' money to buy any precious metals at all. Instead, after pocketing fees and commissions that were never clearly disclosed to consumers, they deposited the rest of the money in a clearinghouse account that recorded the investments without buying the precious metals.
The FTC also accused the defendants of regularly failing to inform their customers that their investments were leveraged and, as such, were agreeing to take out a loan and pay interest on up to 80 percent of the purchase price of the precious metal investments -- which, of course, were never made.
Consumers also weren't told their leveraged investments were subject to equity calls that could force them to pay even more to prevent their investments from being liquidated. Because these leveraged investments were opened with low equity levels and subject to hefty interest charges, the investments were exposed to equity calls even if prices remained stable.
The FTC complaint charged the Tanners and American Precious Metals with violating the FTC Act and the FTC's Telemarketing Sales Rule. In a related case, the Commodity Futures Trading Commission charged American Precious Metals, Harry Tanner and Sammy Goldman of breaking federal law by using the mail and other methods of interstate commerce to defraud consumers.
For consumers considering investing in precious metals, the FTC recommends reviewing the following consumer alerts: Investing in Gold? What's the Rush?, Investing in Bullion and Bullion Coins and Investing in Collectible Coins.