FTC Wins Summary Judgment Against Fraudulent Gold, Silver Investment Scheme

At the Federal Trade Commission’s request, a federal judge has banned the operators of a fraudulent investment scheme from selling investments and ordered them to pay more than $6.5 million for return to consumers.

According to an FTC complaint filed in June 2016, many people lost thousands of dollars to the Discount Gold Brokers scheme, which marketed gold and silver as investments, but often failed to deliver the goods. The defendants ran ads in national media and touted gold and silver as a safe retirement investment on their website. Many consumers, including older Americans, used their retirement savings to pay the defendants. Yet in numerous instances, defendants entirely failed to send consumers the gold or silver ordered and refused to provide refunds. 

On October 4, 2017, U.S. District Court Judge Otis D. Wright II granted the FTC’s request for summary judgment against Donald Lee Dayer and his wife, Katherina Dayer. On October 23, 2017, Judge Wright issued a final judgment and order banning the Dayers, Michael Scott Berman and DiscountMetalBrokers, Inc. from selling investment opportunities, misrepresenting any good or service, and violating the FTC’s Mail, Internet or Telephone Order Merchandise Rule. The order imposes a judgment of $6,526,559 against the defendants, which represents their unjust gains between 2012 and 2014.

The Mail, Internet or Telephone Order Merchandise Rule requires sellers soliciting orders via mail, internet, or phone to have a reasonable basis to expect that they can ship merchandise within any advertised time frame, or within 30 days if no specific time frame is promised. It also requires that, when the promised shipping time cannot be met, the seller must obtain the buyer’s consent to a shipping delay or cancel the order and promptly refund payment for the unshipped merchandise.

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