The Commodity Futures Trading Commission (CFTC) has taken legal action against the head of Crown Bullion, Inc. and Bright Future Financial LLC, seeking a substantial financial penalty. On March 19, 2025, documents were submitted to the Northern District Court of Texas requesting a penalty of $18.9 million.
This penalty seeks to leverage the full extent of the law, which allows the CFTC to impose a civil monetary penalty amounting to three times the financial gain obtained by the defendants. In this case, the monetary gain cited by the CFTC is $6,316,891.83, which represents the net customer deposits after deducting customer returns and business expenses totaling approximately $926,027. By applying the multiple prescribed by law, the requested penalty of $18,950,675.49 reflects the serious nature of the alleged misconduct that violated anti-fraud laws.
Back in September 2023, the CFTC initiated its action against these parties concerning fraudulent activities related to the sale of precious metals. The defendants were charged with misleading clients into purchasing precious metals through self-directed individual retirement accounts (IRAs) and unlawfully using client funds.
According to the complaint, more than 100 individuals, primarily elderly and nearing retirement, were targeted, resulting in the defendants collecting over $7 million since March 2018. Most of these funds were allegedly misappropriated, which represented gross violations of the Commodity Exchange Act (CEA) and associated regulations.
The fraud scheme began in March 2018, wherein the defendants approached elderly clients with offers to purchase precious metals, touting their experience and claiming the security benefits of these investments through self-directed IRAs. Victims were drawn in through deceptive advertising that promoted the supposed reliability of investing in precious metals.
Once clients transferred funds to custodians, who were chosen by the defendants, they would receive fraudulent invoices designed to facilitate the transfer of assets from these custodians to the defendants. However, instead of fulfilling their promises, the defendants reportedly misappropriated a significant portion of these funds, frequently only purchasing a fraction of the precious metals that clients believed they were acquiring, and charging significantly inflated prices.
As detailed in the complaint, the scale of the operation resulted in more than $7 million being transferred from victims’ self-directed IRAs directly to the defendants. The vast majority of these funds were not utilized for their intended purpose, further exacerbating the losses experienced by the clients involved.
In response to these serious allegations, the CFTC is pursuing an assertive course of action to address the fraudulent conduct and protect the interests of the affected customers who entrusted their savings to these entities. The case exemplifies the ongoing challenges within the financial markets concerning fraudulent practices and the potential risks to individual investors, particularly those who may not be fully equipped to navigate complex financial products and schemes.