The Commodity Futures Trading Commission fined a Florida man and the two metals firms he owned a total of $4.7 million for illegal, fraudulent off-exchange financed transactions in precious metals with retail customers, the agency said Monday.
The CFTC ordered two Miami, Fla., companies, Pan American Metals of Miami, LLC and Pan American Metals of Miami Beach, Inc., and their owner and principal, William J. Hionas, to pay restitution of approximately $3.2 million to defrauded customers and a $1.5 million civil monetary penalty. The agency also permanently banned Hionas and the Pan American companies from registering or trading commodities. Neither company, nor Hionas, was registered with the CFTC.
From July 2011 to at least April 2012, the companies “fraudulently solicited and accepted more than $4.7 million from retail public customers throughout the U.S. and Canada to engage in illegal off-exchange financed transactions in gold, silver, platinum, and palladium, in which a retail customer purportedly purchases physical commodities and pays just a portion of the purchase price,” the CFTC said.
The firms falsely claimed to sell and transfer ownership of physical metals to customers, provide loans to buy physical metal and arrange for storage at independent depositories, the agency said. In its complaint, the CFTC said the firms did none of these activities for customers.