A federal court in California has ordered Safeguard Metals LLC and its owner, Jeffrey Ikahn (also known as Jeffrey Santulan and Jeffrey Hill), to pay $25.6 million in restitution to victims and an additional $25.6 million civil monetary penalty for operating a nationwide precious metals fraud scheme, according to the Commodity Futures Trading Commission (CFTC). The ruling follows coordinated action between the CFTC and 30 state securities regulatory agencies that are members of the North American Securities Administrators Association.
Charles Marvine, Acting Chief of the Division of Enforcement’s Retail Fraud and General Enforcement Task Force at the CFTC, said, “This resolution shows the impact the CFTC and state regulatory agencies have when joining forces to combat fraud and is a testament to the hard work of staff at the CFTC and our state regulator co-plaintiffs.”
The court previously found that Safeguard Metals LLC and Ikahn conducted a fraudulent operation that took approximately $68 million from more than 450 customers, most of whom were elderly or retirement-aged. The defendants misled customers about risks associated with their traditional retirement investments, then sold them silver coins and other precious metals at inflated prices by hiding markups. These undisclosed markups led to significant losses for customers. The consent order also prohibits Safeguard Metals LLC and Ikahn from future violations of both federal commodities laws and various state regulations, as well as from trading or registering with the CFTC or participating states.
The enforcement actions resolve proceedings initiated by regulators in February 2022.
In a separate case brought by the Securities Exchange Commission (SEC), Safeguard Metals LLC and Ikahn were ordered to pay an identical amount—$25.6 million in disgorgement plus a $25.6 million penalty—with amounts paid in either action offset against each other.
The CFTC noted that orders requiring repayment may not always result in full recovery for victims if wrongdoers lack sufficient assets but stated it will continue efforts to protect customers.
The agency thanked its state partners as well as the SEC for assistance on this matter. State regulators involved include agencies from Alabama, Arizona, Arkansas, California, Connecticut, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Maryland, Michigan, Mississippi, Missouri, Nebraska, New Mexico, New York (Attorney General Letitia James), North Carolina, Ohio, Oklahoma, Oregon (Attorney General Dan Rayfield), South Carolina (Attorney General Alan Wilson), South Dakota, Tennessee, Utah, Vermont, Washington State and Wisconsin.
Staff responsible for this action included Steve Turley, Christopher Reed and Charles Marvine of the CFTC’s Division of Enforcement along with former staff Jeff Le Riche, Clemon Ashley and Paul Fluke.
The CFTC has issued several advisories warning consumers about precious metals scams. Its Precious Metals Fraud Advisory provides information on how investors can identify potential frauds involving these products.
Suspicious activities related to commodity trading can be reported through a toll-free hotline or online tip form; whistleblowers may be eligible for awards ranging from 10% to 30% of collected sanctions under protections funded by penalties paid to the agency.
