May 21, 2014
CFTC Charges Florida Residents Cindy and Paul Vandivier and Their Company, Mintline, Inc., with Fraud in Connection with Illegal, Off-Exchange Commodity Transactions
Federal Court Issues Order Freezing Defendants’ Assets and Prohibiting Destruction of Books and Records
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained an emergency court Order on May 13, 2014, freezing and preserving the assets under the control of Cindy Vandivier, Paul Vandivier, and their company, Mintline, Inc. (collectively, the Defendants), all of Coconut Creek, Florida. The court’s Order, entered by Judge William J. Zloch of the U.S. District Court for the Southern District of Florida, also prohibits the Vandiviers and Mintline from destroying books and records and grants the CFTC immediate access to such documents. Neither Mintline nor Cindy Vandivier has ever been registered with the CFTC, and Paul Vandivier has no current registration status with the CFTC.
The Order stems from a CFTC enforcement action filed on May 12, 2014, charging the Vandiviers and Mintline with fraudulently soliciting customers and misappropriating customer funds in connection with illegal, off-exchange transactions in precious metals from July 2011 to at least April 2013.
Defendants Allegedly Misappropriated Virtually All of the Customers’ Funds
According to the CFTC Complaint, the Defendants purported to sell physical metals, on a leveraged, margined, or financed basis to retail customers located throughout the United States. The Complaint alleges that the Defendants, in fact, did not purchase, sell, transfer ownership of, deliver, or arrange for storage of any physical metals in connection with the financed metals transactions, but instead misappropriated virtually all of the customers’ funds, using a portion of those funds to pay for office and personal expenses.
The CFTC Complaint further alleges that the Defendants falsely represented to customers that their metals were being held in secured depositories, and fraudulently charged customers interest on purported loans to finance the purchase of the metals. In reality, the Complaint alleges that no physical metal was stored for Defendants’ customers and no loans were made to customers to purchase physical metal.
Sometime between January and April 2013, the Defendants ceased operations, leaving customers without their metals or a return of their funds, according to the Complaint.
In its continuing litigation against the Defendants, the CFTC seeks full restitution to defrauded customers, a return of ill-gotten gains, permanent trading and registration bans, civil monetary penalties, and a permanent injunction from future violations of federal commodities laws, as charged.
CFTC Division of Enforcement staff members responsible for this case are Alan Edelman, Michelle Bougas, James H. Holl, III, and Rick Glaser.
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CFTC’s Precious Metals Customer Fraud Advisory
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.
Last Updated: May 21, 2014