Several South Florida Precious Metals Trading Firms Charged With Operating Ponzi Scheme

Prosecutors charged the owner of several South Florida precious metal investment firms with operating a giant Ponzi scheme that ultimately resulted in 1,400 investors losing more than $25 million.  Jamie Campany, 47, was charged with nine counts  each of wire fraud and mail fraud, each of which carries a maximum of twenty years in federal prison and a $250,000 fine.  A trial is not likely, as Campany's attorney has indicated he plans to enter a plea arrangement with prosecutors.

Campany is alleged to have operated several entities, including Global Bullion Exchange, that had a presence in several South Florida cities.  As the price of precious metals such as gold and silver rose dramatically, Campany promoted the businesses through internet and telephone advertising.  More than 1,400 investors flocked to invest in Campany's operation, which promised to purchase precious metals and store them in secure locations.  Instead, Campany bought minimal amounts of the precious metals and instead used funds from new investors to pay returns to old investors.  

A cease-and-desist order issued by the Maryland Securities Commissioner provides more insight into the selling tactics employed by the companies.  The order details the use of a now-vacant warehouse in Baltimore that was apparently used as a 'boiler room' to solicit investors.  A 'boiler room' refers to the practice glorified in the movie sharing the same name in which individual brokers make large volumes of cold-calls using high-pressure sales tactics to ensnare investors.  The order also noted that Global Bullion Exchange nor any of its related entities ever registered with the state of Maryland to sell securities or investments.

The operation collapsed in the fall of 2009, and a receiver was appointed to recover assets for the benefit of defrauded investors.  According to his attorney, Campany has been working with the receiver to assist in recovery of assets.