Rare Coin Dealer Accused In $170 Million Ponzi Scheme

Nov 16, 2018, 8:23 PM | Updated: 8:23 pm

SALT LAKE CITY, Utah – A more than $170 million Ponzi scheme was believed to have started right here in Utah.

Investigators said the well-known precious metal dealer duped at least 200 people from Utah and as many as 16 other states, according to a statement released by the Commodity Futures Trading Commission (CFTC) and the Utah Department of Commerce, Division of Securities.

Owner Gaylen Dean Rust and his company, Rust Rare Coin, Inc. in Salt Lake City, have been accused of creating the Ponzi scheme that crossed state lines years ago.

Detectives said Rust tricked friends, family, and other folks to pool their cash with the promise they would make big bucks buying and selling silver they never touched.

Salt Lake resident Daniel Jesse has been a regular customer at Rust Rare Coin for years.

“Every paycheck I just go buy five Silver Eagles. I’ve been doing it since 2012,” said the silver investor.

He was shocked when he heard the allegations Friday morning. He had plans to stop by after work.

“They had some really cool stuff in there, but I had no clue that a paper market was something that they even offered. Yeah, I was shocked,” Jesse said.

The store was raided Thursday night. FBI Supervisory Special Agent Michael Pickett was one of the investigators there.

He said he’s seen similar schemes trick many Utahns.

“Here we’re very trusting,” said SSA Pickett. “We’re hesitant to talk about (perpetrators) with authorities because that diminishes the hope we’ll get that money back.”

Pickett urged people to look for red flags when investing their money, like high pressure sales tactics and something that seems too good to be true.

“What we do too many times, is we replace due diligence with that trust, so we don’t do the homework,” said SSA Pickett.

He suggested using UTfraud.com as a resource. (https://www.utfraud.com/)

While Jesse said the Ponzi scheme was never pitched to him, he can see how people got sucked into the glimmer of silver. He was glad he stuck to his gut.

“The old adage, if you don’t hold it, you don’t own it,” he said while holding his silver coin.

Officials have asked people who believe they’re a victim of fraud to reach out to their local law enforcement agency, or contact the Precious Metals Customer Fraud Advisory. 

Information from the Commodity Futures Trading Commission:

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Precious Metals Fraud Advisory, which alerts customers to precious metals fraud and lists simple ways to spot precious metals scams.

Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.

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Rare Coin Dealer Accused In $170 Million Ponzi Scheme