March 8, 2022
SALT LAKE CITY, Utah (Mar 8, 2022) – Utah business owner Gaylen Rust will serve 19 years in federal prison for running a $200 million, multi state Ponzi scheme.
A U.S. District Court Judge sentenced Rust on Tuesday, ordering him to pay over $153 million to 568 victims spread across the United States. The judge also issued an order of forfeiture in the same amount, allowing for the seizure of all money and assets owned by Rust and traceable to the criminal scheme.
The Utah Department of Commerce’s Division of Securities partnered with several government agencies in uncovering this scam. Rust pleaded guilty in December 2021 to securities fraud, among other charges. In a plea agreement with prosecutors, Rust admitted taking money from investors and putting it in personal accounts.
“The actions of Mr. Rust represent some of the biggest consumer harm we’ve seen,” said Department of Commerce Executive Director Margaret Busse. “Ponzi schemes absolutely destroy trust in the investment industry. Without trust, individuals aren’t willing to participate in future opportunities and that affects our entire economy.”
Investigators found that Rust started a “silver trading program” in 2008, telling investors that their money would be used to buy and sell silver bullion. In truth, Rust admitted that he used funds from later investors to pay earlier investors, creating a false impression that the program was successful.
“Those who defraud their family, friends, and associates out of their hard-earned savings will be held accountable,” said United States Attorney Andrea T. Martinez. “This should be a stark reminder to all Utahns that it is imperative to vet your financial advisor or anyone who attempts to persuade you to invest in their business or financial dealings.”
“We’re proud to have been able to partner with the U.S. Attorney’s office and other agencies in uncovering this awful scam,” said Division of Securities Director Jason Sterzer. “The most common sign that an investment is a scam is an offer of high returns with little or no risk. Education remains the best defense against securities fraud.”
This sentence represents the combined efforts of Department of Commerce’s Division of Securities, the U.S. Attorney’s office, the FBI, the IRS, The Commodity Futures Trading Commission (CFTC), The U.S. Securities and Exchange Commission (SEC), among others.
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About the Department of Commerce: The mission of the Department of Commerce is to strengthen trust in Utah’s commercial activities. This is done through regulation, enforcement, and education. The Division of Securities oversees investment law in the state of Utah and investigates complaints related to financial advising. In addition, division staff offer investor education. The Division of Securities can be reached at (801) 530-6600 or online at securities.utah.gov.
Media Contact:
Zach Whitney
Communication Director
zwhitney@utah.gov
385-315-4536