February 9, 2016
Federal Court Orders Cindy and Paul Vandivier to Pay Civil Monetary Penalties and Restitution of Almost $3 Million to Settle CFTC Charges of Operating an Illegal, Off-Exchange Precious Metals Scheme
The Vandiviers Were also Charged with Misappropriating Virtually All of Customer Funds, Using the Money for Office and Personal Expenses
Washington, DC -- The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court Consent Order imposing a permanent injunction against CFTC Defendants Cindy Vandivier and Paul Vandivier of Coconut Creek, Florida. The Court’s Order requires the Vandiviers to each pay a $1 million civil monetary penalty and jointly to pay $986,763 in restitution to defrauded customers to settle CFTC charges of fraudulently soliciting customers and misappropriating customer funds in connection with illegal, off-exchange transactions in precious metals. Cindy Vandivier is the wife of Paul Vandivier.
The Order, entered on February 5, 2016, by Judge William J. Zloch of the U.S. District Court for the Southern District of Florida, also imposes permanent trading and registration bans on the Vandiviers and prohibits them from further violations of the anti-fraud and off-exchange trading provisions of the Commodity Exchange Act and CFTC Regulations, as charged.
The Order arises out of a CFTC Complaint filed on May 12, 2014. The Complaint charged the Vandiviers and their company, Mintline, Inc., with fraudulently soliciting retail customers and misappropriating customer funds in connection with illegal, off-exchange transactions in precious metals, from July 2011 to at least April 2013 (see CFTC Complaint and Press Release 6934-14). The CFTC’s litigation against Mintline is still ongoing, as Mintline is currently in default in this action, awaiting the entry of a default Order by the Court.
According to the Order, the Vandiviers, through Mintline, solicited retail customers throughout the United States to purchase physical metals on a leveraged, margined, or financed basis. The Order finds, however, that contrary to what customers were led to believe, the Vandiviers did not purchase, sell, transfer ownership of, deliver, or arrange for storage of any physical metals in connection with the financed metals transactions. Instead, according to the Order, they misappropriated most, if not all, of customers’ funds to pay Mintline’s operating expenses and to pay for personal expenses, including animal, automobile, communication, employee, medical, and shopping expenses. As a result of the Vandiviers’ fraudulent activities, Mintline’s customers lost a total of $986,763, according to the Order.
The CFTC cautions victims that restitution orders may not result in the recovery of 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.
CFTC Division of Enforcement staff members responsible for this case are Alan I. 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: February 9, 2016