Gutterman and companies to pay over USD2.5m over gold and oil commodities fraud
The US District Court for the Southern District of Florida has entered an order of default judgment and permanent injunction against Abraham Gutterman, who currently resides in Brooklyn, NY, and his companies, Alliance Capital Metals LLC (ACM) and AR Goldman Wealth Management, LLC (ARGWM), both of South Florida.
The order stems from a CFTC complaint filed against the defendants on 15 March, 2012, in connection with a fraudulent gold and oil commodity options scheme .
The order requires Gutterman and his companies jointly and severally to pay restitution of USD483,725 to defrauded customers and a USD2.1 million civil monetary penalty. The order also imposes permanent trading and registration bans against the defendants and prohibits them from violating the Commodity Exchange Act and CFTC regulations, as charged.
The order finds that since at least November 2009 the defendants fraudulently solicited and accepted at least USD483,725 from at least 15 customers for the purpose of trading gold and oil commodity options, but instead misappropriated all of the money for personal expenses and purchases, including spending it on restaurants, gambling, entertainment, and retail purchases.
The defendants used high pressure sales tactics calling customers repeatedly and promising large profits to convince them to invest, including that customers could “make a killing” if they invested in commodity options through ACM and ARGWM, the order finds. The order also finds that the defendants falsely represented to customers that ACM was registered with the CFTC, when it was not.
Furthermore, the defendants did not provide customers with documentation for their investments and fraudulently represented to customers shortly after they invested that all of their funds were lost trading commodity options, the order finds. The defendants also fraudulently represented that the only way customers could recoup their losses was to invest additional funds with defendants, but no money was ever returned to investors, according to the order.