The US Commodity Futures Trading Commission (CFTC) today charged a Florida-based commodity pool operator and his firm in a case involving the operation of a fraudulent precious metals scheme, according to a CFTC statement.
Betty Lea Grimes and his company Mark Olsen Mining Company (MOMC) were accused of taking money from customers who thought they were getting gold, silver, and other precious metals in return. Customers were lulled into the false belief that precious metals had been purchased and were stored in MOMC’s vault, but $870,000 million worth of their bullions vanished over two years.
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The complaint also charges MOMC with making several misleading representations to actual and prospective investors. As also alleged, the defendant assured the victims that they were pooling their funds for purported purpose of investing in precious metals, while he was actually running a Ponzi scheme.
Grimes has used several names including Betty Grimes, Lea Grimes, Lea Lauren, Betty Nehme, and Lea Nehme, according to the complaint that accuses the defendants of fraud, misappropriation, registration violations, and issuing false statements.
The U.S. derivatives regulator alleged in its complaint the money sent to MOMC was not used to purchase or trade precious metals on its clients’ behalf. Prosecutors said that instead of buying the precious metals ordered by his customers, Grimes spent the money on company expenses, investment activities and for his own personal use and benefit.
As a result of the actions and misappropriation, the commission seeks full restitution to defrauded participants, disgorgement of any ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against violations of federal commodities laws, as charged.