Utah man nailed in $ 170m silver Ponzi Scheme

The SEC has launched a civil enforcement action against Rust Rare Coin Inc. and its owner Gaylen Dean Rust after they say a ponzi scheme defrauded hundreds of people out of $170 million over several years. The scheme has operated since 2013 and may have been operating since 2008. Rust attempted to solicit new suckers as recently as October of this year.

Investors were told they were buying into a share of a pool that purchased precious metals when prices were low and sold them when prices were high. Rust promised returns of 20% to 25% per year and provided fraudulent documentation to back up his claims. Rust told investors the Silver Pool had about $80 million worth of silver stockpiled at various locations. That was rubbish.

Rust used incoming money to pay off earlier investors and for personal expenses including to bankroll betting on horses.