March 18, 2019
In CFTC Action, Federal Court Orders Precious Metals Firm and its Principal to Pay More than $3.6 million in Monetary Sanctions for Precious Metals Fraud and Misappropriation
Washington DC — The Commodity Futures Trading Commission (CFTC) announced today that a federal court in Florida has entered an Order of Final Judgment by Default (Final Judgment Order) and an Order Granting Motion for Final Default Judgment (collectively, Orders), against Betty Lea Grimes (Grimes) of Boca Raton, Florida, and the precious metals firm she founded, Mark Olsen Mining Company (MOMC) (collectively, defendants). The Final Judgment Order requires the defendants to pay $2,723,460 in civil monetary penalties and $907,820 in disgorgement to customers. The Final Judgment Order also permanently bars them from trading in CFTC regulated markets, as well as seeking registration with the CFTC.
Grimes used the following names, and/or combinations of these names, in various legal documents: Betty Grimes, Lea Grimes, Lea Lauren, Betty Nehme, and Lea Nehme.
The Orders resolve the CFTC’s action against the defendants, filed on June 12, 2018, which charged them with fraudulently soliciting retail customers to engage in illegal off-exchange transactions in precious metals and misappropriating all of the customer funds (see CFTC Complaint and Press Release 7738-18).
The Final Judgment Order found that the defendants made material misrepresentations and omissions while soliciting investors about their own experience and track record, as well as falsely stating that all the MOMC investors’ funds would be invested in precious metals. While the defendants successfully solicited more than $2,723,460 for the supposed purpose of acquiring precious metals, the Final Judgment Order found than none of these funds were ever used to purchase precious metals. Instead, Defendants misappropriated all the investor funds. Grimes transferred a significant amount of money via wire transfer to multiple bank accounts located in South Africa. Grimes spent the remaining amount of MOMC investor monies on personal living expenses.
The CFTC cautions that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
The CFTC thanks and acknowledges the assistance of the Financial Sector Conduct Authority (FSCA), formerly known as the Financial Services Board (FSB), of South Africa for its assistance in this matter.
The CFTC Division of Enforcement staff members responsible for this case are Maura Viehmeyer, Erica Bodin, Aimée Latimer-Zayets, and Rick Glaser.