American Precious Metals' sales pitches and marketing materials touted precious metals as low-risk investments due to the fact bars, bullion and coins are tangible, physical assets that tend to rise in value during times of economic uncertainty.

But despite the hard-sell tactics and other lies the Tanners fed their customers, they never used their victims' money to buy any precious metals at all. Instead, after pocketing fees and commissions that were never clearly disclosed to consumers, they deposited the rest of the money in a clearinghouse account that recorded the investments without buying the precious metals.

The FTC also accused the defendants of regularly failing to inform their customers that their investments were leveraged and, as such, were agreeing to take out a loan and pay interest on up to 80 percent of the purchase price of the precious metal investments -- which, of course, were never made.

Consumers also weren't told their leveraged investments were subject to equity calls that could force them to pay even more to prevent their investments from being liquidated. Because these leveraged investments were opened with low equity levels and subject to hefty interest charges, the investments were exposed to equity calls even if prices remained stable.

The FTC complaint charged the Tanners and American Precious Metals with violating the FTC Act and the FTC's Telemarketing Sales Rule. In a related case, the Commodity Futures Trading Commission charged American Precious Metals, Harry Tanner and Sammy Goldman of breaking federal law by using the mail and other methods of interstate commerce to defraud consumers.