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Slemmer Enterprises, Dorrian Enterprises and Roth Investment Group all part of the Berkley Enterprise that defrauded customers
The Commodity Futures Trading Commission (CFTC) announced that Judge William P. Dimitrouleas of the U.S. District Court for the Southern District of Florida entered a Consent Order against Defendants Jeffrey Slemmer of Acton, Massachusetts, Christian Dorrian of Boynton Beach, Florida, Adam Roth of Boca Raton, Florida, and their former respective Florida companies Slemmer Enterprises LLC, Dorrian Enterprises, LLC, and Roth Investment Group LLC, finding that the defendants fraudulently solicited customers in connection with precious metals and diamonds transactions, misappropriated customer funds, and concealed their fraud with false account statements. The defendants executed the scheme using the business names Berkley Hard Asset Group, Berkley Hard Assets, and Berkley Rare Diamonds (the Berkley Enterprise).
The Order requires the Defendants to pay, jointly and severally, $2,738,040 in restitution to defrauded customers and a $2,738,040 civil monetary penalty. The Order also imposes permanent trading and registration bans against the defendants, among other things, and prohibits them from committing further violations of the Commodity Exchange Act and CFTC Regulations, as charged.
The Court’s Order arises from a CFTC enforcement action filed on May 31, 2016, charging the Defendants with fraud, engaging in illegal, off-exchange transactions in precious metals, and acting as Futures Commission Merchants without registering as such with the CFTC, as required.
The Order finds that, from at least June 2012 through May 2015, the Defendants solicited customers to invest in precious metals on both a fully-paid and a financed, or leveraged, basis.
According to the Order, during these solicitations, Slemmer, Dorrian, Roth, and others acting on behalf of the Berkley Enterprise, misrepresented the value and risk of investments in precious metals, as well as the expertise and experience of the “brokers” employed by the Berkley Enterprise.
The Order also finds that between July 20, 2012 and September 4, 2014, the Defendants received at least $2,769,218 from at least sixty customers for the purpose of investing in precious metals, but used only a portion of the customer funds to purchase precious metals as promised. Instead, the Defendants misappropriated the remaining funds for their personal benefit. Moreover, the Order finds that, notwithstanding their failure to acquire precious metals with customer funds, the Defendants provided customers with account statements and trade confirmations falsely representing that customers owned specific amounts of precious metals purchased at particular prices.
The Order further finds that the Defendants employed a “bait-and-switch” scheme in which, after soliciting customers to purchase precious metals, the Defendants pressured customers to exchange their precious metals investments for diamonds. The Defendants then provided customers with physical diamonds, along with purchase orders and appraisal documents that fraudulently misrepresented the diamonds’ fair market or resale values.
The CFTC cautions that Orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
CFTC Division of Enforcement staff members responsible for this case are Daniel Burstein, Joseph Patrick, Elizabeth N. Pendleton, David Terrell, Scott Williamson, and Rosemary Hollinger.