July 4, 2023 –A US court has ordered two precious metals companies to pay almost $146m (£115m) after more than 500,000 American Silver Eagle coins went missing.
The firms and their owner Robert Higgins have been accused of running a “fraudulent and deceptive scheme”.
They had allegedly promised to store the coins for customers.
However, when investigators entered vaults that were meant to hold the coins, they were nowhere to be found.
Under the court settlement, precious metals dealer Argent Asset Group and First State Depository Company, which were both owned by Mr Higgins, were ordered to make restitutions of $112.7m and pay a penalty of $33m.
US financial watchdog the Commodity Futures Trading Commission (CFTC) said Mr Higgins’ companies ran “fraudulent silver leasing programmes” from 2014 to 2022.
These were known as the Maximus Program and the Silver Lease Program.
Through the schemes, the companies “solicited and misappropriated at least $7 million in funds and silver from at least 200 customers,” the regulator said.
The firms also made “false and misleading excuses for why assets could not be withdrawn”, according to the CFTC.
The regulator said that over 500,000 American Silver Eagle coins and more than 9,000 gold coins were missing from customers’ accounts.
In their place, investigators said that they found “‘IOU’ slips in empty boxes marked to indicate a customer’s account, yet containing no assets.”
“This kind of egregious behaviour merits the full weight of the Commission’s enforcement authority,” the CFTC added.
Mr Higgins did not immediately respond to a request from the BBC for comment.
The weight and purity of American Silver Eagle coins are guaranteed by the US government.
Each coin contains at least one troy ounce (31.1g) of 99.9% pure silver, according to the United States Mint.