Kansans lose millions in scam targeting political and religious people, officials say

Twenty-two Kansans lost $2.5 million in an investment scheme in which a Los Angeles based company charged exorbitant prices on precious metals, the Kansas Insurance Department said this week.

The insurance department, which oversees the Kansas Securities Commission, said the scheme netted $185 million from at least 1,600 seniors and other investors by cold-calling and using advertisements designed to “instill fear in elderly and ... build trust with investors based on representations of political or religious affinity.”

An article in The Wall Street Journal says the scheme had duped investors since 2017 and targeted conservatives.

The insurance department joined the Commodity Futures Trading Commission, or CFTC, and 29 other states in a case filed in Dallas federal court against TMTE Inc., which also goes by Metals.com and a few other names, as well as Tower Equity LLC and Simon Batashvili and Lucas Asher, according to a news release from the insurance department.

Investors were told to liquidate their current investments to buy gold and silver at markups ranging from 100% to 300%, the news release says.

“In many cases, the market value of the precious metals sold to investors was substantially lower than the value of the securities and other retirement savings investors had liquidated to fund their purchase,” the release says.

In the WSJ article posted online Friday, defendant Asher said he thinks it is a “mistaken identity” and he had no involvement with Metals.com or the sale of precious metals; Batashvili and the attorney for both men did not respond to messages for comment.

The federal court case requests that the defendants pay back investors.

“This case highlights just how geographically broad commodities fraud can be in our rapidly-evolving financial markets and how important it is for regulators at all levels of government to work together to pursue bad actors and protect market participants,” CFTC Chairman Heath P. Tarbert said in the release.

Kansans who believe they have been targeted by a similar precious metal scheme can contact the insurance department at insurance.kansas.gov or by calling 1-800-432-2484.