In a shocking revelation, New York Attorney General Letitia James has unveiled a massive investment scandal that has left nearly 1,000 New Yorkers defrauded out of approximately $10 million. The lawsuit, filed against precious metals company Lear Capital and its founder Kevin DeMeritt, alleges a web of deceit that targeted vulnerable investors, particularly elderly residents of Western New York seeking to secure their retirement savings.
The lawsuit alleges that Lear Capital lured investors into investing tens of millions in precious metals, primarily coins, while clandestinely charging undisclosed commissions of up to a staggering 33 percent on more than $43 million in sales. This tactic siphoned off substantial portions of investors’ hard-earned money, leaving many with severely diminished retirement funds. What’s more alarming is that Lear was not even registered as a commodity broker-dealer, commodity investment advisor, or telemarketer, in clear violation of New York law.
Attorney General James, a staunch advocate for investor protection, minced no words in her condemnation of the fraudulent activities. “When it comes to protecting New Yorkers’ life savings, we will not hesitate to do everything in our power to safeguard their investments and their ability to retire with dignity,” she declared. She emphasized that the lawsuit not only aims to halt Lear’s illegal operations but also to restore millions of dollars back into the pockets of affected New Yorkers.
Lear’s deceitful tactics extended beyond hidden commissions. Prospective investors were duped into believing that Lear’s success was aligned with their own financial security. In reality, Lear was profiting at the expense of its investors, charging exorbitant commissions that instantly eroded up to one-third of their investments. These commissions were strategically buried within complex legal jargon, often overlooked or misunderstood by unsuspecting investors.
To compound their scheme, Lear engaged in coaching investors on how to respond to questions, invented non-standard financial terms, and issued invoices that obfuscated or omitted crucial information about commissions. Such manipulative practices further underscore the calculated nature of the scam.
Perhaps most concerning is that Lear and DeMeritt persist in marketing and selling precious metals and coins to New Yorkers even after their fraudulent activities have been exposed. In response to this continued threat, Attorney General James has not only filed the lawsuit but is also seeking a temporary restraining order to immediately halt the company’s illicit operations.
The lawsuit seeks more than just monetary restitution. Attorney General James aims to secure a permanent prohibition against Lear and DeMeritt from operating in New York. Additionally, the lawsuit calls for disgorgement, damages, penalties, and costs, serving as a stark warning to fraudulent operators that they will be held accountable for their actions.
This lawsuit serves as a resounding reminder of the critical need for investor education and regulatory oversight within the financial industry. It underscores the importance of scrutinizing investment opportunities and seeking guidance from reputable and registered financial advisors. As this legal battle unfolds, it is a testament to the commitment of officials like Attorney General James to upholding the principles of integrity and fairness in the realm of investments, ensuring that individuals can retire with the security and dignity they deserve.