US Court imposes $3M penalty on couple over illegal, off-exchange precious metals transactions

For the third time in less than a week, the US authorities have acted against law violations concerning precious metals transactions.

The latest penalty is imposed on Cindy Vandivier and Paul Vandivier, a married couple from Florida, whom were ordered by a federal court to pay a cumulative penalty of circa $3 million over a fraud in relation to an illegal, off-exchange precious metals scheme.

The U.S. District Court for the Southern District of Florida imposes a permanent injunction against the Vandiviers. Each of them is ordered to a pay $1 million civil monetary penalty. In addition, the couple have to jointly pay $986,763 in restitution to defrauded customers.

The court order also imposes permanent trading and registration bans on the Vandiviers and prohibits them from further violations of the anti-fraud and off-exchange trading provisions of the Commodity Exchange Act and CFTC Regulations.

The legal decision stems from a Commodity Futures Trading Commission (CFTC) complaint filed on May 12, 2014. The complaint charged the Vandiviers and their company, Mintline, Inc., with fraudulently soliciting retail customers and misappropriating customer funds in connection with illegal, off-exchange transactions in precious metals, from July 2011 to at least April 2013.

The Vandiviers, through Mintline, solicited retail customers in the United States to purchase physical metals on a leveraged, margined, or financed basis. The Vandiviers, however, did not purchase, sell, transfer ownership of, deliver, or arrange for storage of any physical metals in connection with the financed metals transactions. Instead, they misappropriated most of customers’ funds to pay Mintline’s operating expenses and to pay for personal expenses, including animal, automobile, communication, employee, medical, and shopping expenses.

The official announcement from the CFTC can be viewed by clicking here.

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