Federal Court Orders Precious Metals Dealer, its CEO and President to Pay $49M for Fraudulent Misappropriation Scheme

WASHINGTON, D.C.- The Commodity Futures Trading Commission today announced U.S. District Judge Fernando M. Olguin, Central District of California, issued orders of default judgment against a company and two individuals: Regal Assets LLC, a California LLC; Regal Assets' owner and CEO, Tyler G. Gallagher,formerly of Los Angeles; and Regal Assets' former President Leah Donoso of Robinson, Texas.

The orders stem from the CFTC and the California Department of Financial Protection and Innovation complaint jointly filed Sept. 27, 2023, charging the defendants with misappropriating customer funds given to defendants to purchase precious metals from Regal Assets. [See CFTC Press Release No. 8791-23].

As alleged in the complaint, Regal Assets solicited customers to transfer funds primarily from their tax-deferred retirement accounts to purchase precious metals from Regal Assets through self-directed IRAs. Rather than using all of the customers' funds to purchase precious metals, the defendants misappropriated more than $21 million from more than 120 customers. The defendants made knowing or reckless fraudulent misrepresentations and omissions to customers, including using forged documents to conceal their misappropriation and maintain their fraudulent scheme.

Under the terms of the orders issued Oct. 15, the defendants are required to pay, jointly and severally, over $21.9 million in restitution to defrauded customers and civil monetary penalties over $27.3 million. The orders also permanently enjoin the defendants from engaging in conduct that violates the CEA and California law, as charged, and permanently bans them from registering with the CFTC and from trading in any CFTC-regulated markets. The orders resolve the CFTC's lawsuit against all three defendants.

The CFTC thanks DFPI, its co-plaintiff in this action, for its assistance.

Division of Enforcement staff responsible for this action are Rishi Gupta, Brendan Forbes, Kara Mucha, Erica Bodin, Daniel Jordan and Rick Glaser.

CFTC's Precious Metals Customer Fraud Advisory

The CFTC has issued several customer protection fraud advisories and articles, including the Precious Metals Fraud Advisory, which provides information about fraud involving the trading of precious metals - such as gold, silver, palladium and platinum - and how customers can detect, avoid and report these scams.

The CFTC strongly urges the public to verify a company's registration with the CFTC at NFA BASIC before committing funds. A customer should be wary of providing funds to any unregistered company.

Suspicious activities or information, such as possible violations of commodity trading laws, can be reported to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the Whistleblower Office. Whistleblowers may be eligible to receive between 10 and 30 percent of the collected monetary sanctions, from the CFTC Customer Protection Fund which is financed through the sanctions paid by CEA violators.