DOJ: Arizona Man Defrauded Purchasers, Used $13M in Funds to Purchase Metals

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An Arizona-based man allegedly presupposed to be an funding advisor and raised almost $20 million from purchasers, spending greater than $13 million of these funds on shopping for gold, silver and different metals as an alternative of investing, in accordance with fees from the Division of Justice (DOJ).

John Lopez lives in Flagstaff, however was arraigned this week on a 27-count indictment in New Mexico federal court docket, together with 16 counts of wire fraud and 11 counts of mail fraud, in accordance with the Justice Division. He was indicted on Dec. 20.

In line with the indictment, Lopez was the founder and president of Private Cash Administration Firm (PMMCO) and had no staff. Starting in 2014, Lopez started touting himself as an funding advisor “with appreciable experience who might persistently and considerably beat the market common on return of investments” by means of primarily promoting shares and bonds.

Between February 2014 and November 2021, Lopez acquired about $19.4 million in belongings from purchasers, a lot of whom had been retired or had been nearing retirement. In line with the indictment, Lopez promised assured annual returns of 10% (no matter market volatility), and that he’d get an annualized 19.2% return on a retirement funding.

“Lopez falsely advised numerous purchasers and potential purchasers that he had developed a pc program or algorithm that resulted in constant and substantial above-average market returns on investments,” the indictment learn.

Nonetheless, as an alternative of investing the belongings into the promised shares and bonds, Lopez purchased $13.3 million in “treasured metals,” together with gold and silver, whereas disbursing about $6.1 million from the belongings to purchasers, which he falsely stated had been “funding features,” in accordance with the DOJ.

After telling purchasers that he’d place their funds in particular person Charles Schwab brokerage accounts he would handle, Lopez additionally lied in regards to the efficiency of the funds, falsely representing the worth of their investments in month-to-month or quarterly paperwork accomplished up as account statements, in accordance with the Justice Division. 

In a single occasion, a consumer received an account assertion exhibiting that his $200,000 funding had supposedly grown to greater than $3.289 million, a 1,544% improve over 5 years. In the identical time interval, an funding within the S&P 500 would have jumped by solely about 104%, in accordance with the DOJ.

Ahmad Assed, Joel R. Meyers and Shaheen Torgoley, attorneys representing Lopez, disputed the allegations, together with his counsel noting Lopez was in his 70s and had by no means been arrested, not to mention charged with against the law.

“He seems ahead to a chance to clear his title in court docket, not defend himself in opposition to selective leaks from the federal government brokers within the court docket of public opinion,” they stated in a press release to “Mr. Lopez maintains that his precedence has all the time been and can proceed to be the monetary well-being of his clientele.”

The account statements positioned PMMCO’s complete consumer account values at about $39 million in October 2021, however on Nov. 9 and 10 of that yr, authorities brokers seized the corporate’s belongings, discovering principally metals with a worth beneath $15 million. However Lopez continued to create false account statements even after PMMCO’s belongings had been seized, representing consumer account values at about $49 million in Might 2022, in accordance with the DOJ.

Lopez faces as a lot as 20 years in jail if convicted.

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