Compliance July 6, 2023

Fake Silver Coin Scheme Penalized by CFTC

The companies involved were penalized over $100 million and its main organizer was arrested on June 10.

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The U.S. District Court for the District of Delaware imposed a default judgement of $145.7 million on an investment company and depository for selling silver coins fraudulently, the Commodity Futures Trading Commission announced on Monday.

Argent Asset Group LLC, First State Depository Co. LLC and Robert Leroy Higgins, the owner of both, sold American Silver Eagle coins to investors, according to the CFTC. Higgins and the companies then leased those same coins from the investors and paid investors monthly payments. They told the investors the coins were fully insured and under the custody of First State Depository.

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However, the coins were not custodied or insured. Additionally, Higgins misappropriated “tens of millions of dollars” worth of coins from more than 200 customers, according to the CFTC’s release.

The scheme began in January 2014 and was known as the “Maximus Program.” Investors had the option of transferring their own coins to the defendants in exchange for monthly payments or buying them from Higgins.

The CFTC complaint from September 2022 explained that, “To the extent that defendants even obtained ASEs for customers in the first place, defendant’s typical practice was for FSD to systematically transfer all of the customer’s ASEs to Argent and Higgins, and for Higgins to sell those ASEs to third parties. This was typically done by moving metal from FSD’s vault to Argent’s offices at FSD, but on occasion it was simply accomplished by having metal delivered directly to Argent without ever being physically placed in FSD’s vault.”

The complaint says that no assets of equal value were used to replace customers’ ASEs, and “very little, if any, of the leased silver was actually stored in customer accounts at FSD.” It goes on to say that the “Defendants misappropriated the Leased Silver, simply taking it and diverting it for their own use.”

The CFTC brought charges in October 2022. The CFTC claimed it served the defendants and that they never responded. The judge therefore issued a default judgement of $112.7 million in restitution to their victims, as well as $33 million in civil penalties.

The District Court established a receivership for First State Depository. A website made by the court-appointed receiver states that $78 million in precious metals is unaccounted for in FSD’s vaults and that Higgins was arrested on June 10.

No information on how to contact the defendants was readily available.

Deals & People July 6, 2023

Cbiz Adds to Retirement Plan Capability With APA Acquisition

The financial and insurance advisory brings on Indianapolis-based American Pension Advisors, along with its 1,200 clients.

 

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Financial, insurance and retirement plan advisory Cbiz Inc. announced Wednesday an addition to its retirement plan practice with the acquisition of American Pension Advisors Ltd.

Cleveland-based Cbiz will bring on APA, with its reported $2.9 million in revenue from retirement plan consulting for more than 1,200 clients, according to the announcement. The Indianapolis-based advisory has 14 employees to design, implement and administer retirement plans, including 401(k), 403(b), 457(b), defined benefit and cash balance, according to the announcement.

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Cbiz joins other insurance and workplace benefit aggregators who have been acquiring independent retirement advisories in recent years to expand service offerings, as well as gain access to retirement plan participants.

“The acquisition of American Pension Advisors brings valuable talent, expertise, and capacity to bolster our growing Retirement Investment Services business,” Jerry Grisko, president and CEO of Cbiz, said in a statement. “Working together, we will be able to offer our collective clients a broader array of services.”

The deal also adds to CBIZ’s Indianapolis market presence, the CEO noted, after the firm acquired the city’s fifth-largest accounting firm, Somerset CPAs and Advisors, in February.

“We are so excited to join forces with a nationally recognized company like CBIZ,” APA qualified plan adviser David Behrmann said in a statement. “I’m pleased that our team members will now have access to additional technical support, resources and tools that will make them more successful and better serve our clients.”

Cbiz’s most recent retirement plan acquisition was in 2021, when it acquired the assets of third-party administrator Wright Retirement Services LLC, according to Cbiz’s 2022 annual report. The retirement and investment solutions business is about 15% of CBIZ’s total revenue, which was $1.4 billion in 2022, according to the firm’s 2023 first quarter investor presentation.

The advisory released research in May noting that small and medium-sized businesses are struggling with employee attraction and retention, which points to them prioritizing strong retirement plan benefits and wages to keep talent.

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