Federal, State Agents Raid Metals Firm

First American Currency Inc., a Laguna Hills precious metals company recently sued by the government for fraud and racketeering, was raided Wednesday morning by more than 35 state and federal officials, said Gary R. Jones, public relations coordinator for the Postal Inspection Service for Los Angeles and Orange counties.

Armed with search warrants from the U.S. attorney’s office, postal inspectors entered the offices at 25411 Cabot Road, Suite 115, at 9 a.m. They left almost eight hours later with numerous boxes filled with documents and business records, Jones said.

Federal officials were mostly mum about the Wednesday raid, deferring to a press conference scheduled today at 1:30 p.m. at the U.S attorney’s office in Los Angeles. It is anticipated that the formation of an investment fraud task force, to be composed of local, state and federal officials, will be announced at the press conference.

More than 60 First American Currency employees, including senior executives, salesmen, and administrative workers, were at the company’s office at the time of the raid. Gilbert Traylor, the company’s president and chief executive, was also in the office, Jones said.

No arrests related to the search warrant were made, but there were some arrests related to outstanding traffic warrants, Jones said. The Orange County Sheriff’s Department could not confirm those arrests late Wednesday afternoon.

On Tuesday, the Commodity Futures Trading Commission (CFTC) and the California attorney general’s office filed in federal court in Los Angeles for an injunction against First American, Traylor, and Eric Kuvet, the company’s secretary and treasurer.

The five-count complaint, made public Wednesday, alleges that the company and its two officers engaged in sale of futures contracts in violation of the Commodity Exchange Act, and are committing fraud by soliciting the public to buy these contracts.

The company is not registered with the CFTC, said Arthur Salzberg, the commission’s regional counsel. He said First American Currency collected “several million dollars” from more than 1,000 customers nationwide.

A hearing on the order is set for noon today in U.S. District Court in Los Angeles.

Late Tuesday, U.S. District Judge David Kenyon issued an order freezing the company’s assets and gave the commodity commission access to the company’s books and records. The CFTC is also seeking a permanent injunction against the company.