CFTC News Release 4415-00 (civ-00-6885)

For Release July 5, 2000

**CFTC CHARGES NATIONAL BULLION AND COIN, INC. (NBC) (d/b/a/ NATIONAL    BULLION & COIN SERVICES, INC.); CAPITAL CREDIT MANAGEMENT &    FINANCE, INC. (CCMF); JOSEPH B. FLANIGAN; AND LAWRENCE COLMAN WITH    CONDUCTING A FRAUDULENT NATIONWIDE PRECIOUS METALS SCHEME**

**Federal Court Enters *Ex Parte* Order Which, Among Other Things,    Freezes the Assets of NBC and CCMF and Appoints a Receiver to Take Control    of Businesses**

**CFTC Issues Consumer    Advisory Warning Asking the Public to be Wary of Sales Pitches Offering    Great Profits and Low Risk through Investments in Precious Metals**

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced    today that on June 28, 2000, it filed an injunctive action in the    U.S. District Court for the Southern District of Florida against **National Bullion and Coin, Inc. (NBC), doing business as National Bullion    & Coin Services, Inc.** of Plantation, Florida; **Capital Credit    Management & Finance, Inc. (CCMF)** of Tamarac, Florida; **Joseph B.    Flanigan** of Plantation, Florida, the owner of NBC and CCMF; and **Lawrence Colman**, the president of NBC and CCMF, whose last known    address was in Tamarac, Florida, charging them with the fraudulent sale of    illegal precious metals futures contracts via telemarketing to individuals    nationwide.

The CFTC complaint alleges that customers were defrauded about the    nature of the investment they were making and about the risk and profit    potential of the futures contracts.

On June 29, 2000, the court entered an ***ex**parte*** restraining    order which, among other things, freezes the assets of all the    defendants and appoints a receiver to take control of both companies. None    of the defendants is registered with the CFTC.

**CFTC Posts Consumer    Advisory Warning on its Website**

In a separate announcement today, the CFTC issued a Consumer Advisory    warning the public to be wary of similar sales pitches offering great    profits and low risk through investments in precious metals (seeCFTC News Release 4416-00, July 5, 2000).

**CFTC Charges That NBC/CCMF Fraudulently Solicited Customers to    Purchase Illegal Futures Contracts**

The CFTC complaint alleges that since approximately September 1998,    NBC/CCMF has offered a metals financing program in which customers made    downpayments that purportedly were applied to purchases of metal or to    commissions and other fees. NBC/CCMF then supposedly purchased physical    metal for customers and stored it, lending the customers the balance they    owed on the value of the metal; when the price of metal dropped, customers    using this financing were required to pay additional funds to bring the    equity in their accounts back to pre-determined levels.

The CFTC complaint claims that the defendants violated the Commodity    Exchange Act (CEA) by deceiving customers about the risks related to these    transactions by having account executives make various false statements,    such as: "It�s absolutely impossible not to make money on a product    [gold] that�s been in the earth since there�s been an earth," or    "if you and I had done business a week or ten days ago when we first    started talking, and you had 10,000 ounces, you would have made yourself    $10,000."

The CFTC complaint also alleges that NBC and CCMF did not buy and store    metal as promised customers, and that the metals contracts are illegal    futures contracts because they were not sold on a CFTC-designated contract    market.

The CFTC, in addition to the restraining order, is also seeking    preliminary and permanent injunctive relief, disgorgement and restitution,    civil monetary penalties (in amounts not to exceed the higher of $110,000    or triple the monetary gain to the defendants for each violation of the    CEA), and other relief.

The **Department of Banking and Finance** for the **Office of the    Comptroller for the State of Florida** provided valuable assistance to    the CFTC during the investigation of this matter.

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