South Florida Arbitration & Litigation Lawyer Blog
Precious Metals Fraud:
As an example of precious metals fraud, the reader need look no further then what recently happened to a California gold dealer, Superior Gold Group LLC, which was seized and whose assets were frozen by a court order.
Recently, a California judge froze the assets of Superior Gold Group LLC of 100 Wilshire Boulevard, as well as another office in Woodland Hills, after it was accused of fraudulent business practices in a civil lawsuit filed against the company and owner Bruce Sands by the Los Angeles County district attorney and the Santa Monica city attorney.
Superior Gold Group, which sold gold coins and bullion and other precious metals, is alleged to have taken payments from customers but never delivered the gold ordered, charged prices much higher than fair market value and misled customers into buying expensive specialty coins according to the lawsuit. In their lawsuit, the agencies said Superior Gold took advantage of investors who flocked to gold as the price of the precious metal rose and the value of many other investments fell in recent years. “By fostering fear and confusion among its customers, Superior has induced them to pay far above market prices for various gold products,” the complaint said.
In a report by The LA Times, they recounted one victims story…” Steven Siry, 61, of Los Angeles is one customer who believes he was ripped off. Siry said he invested $20,000 in a “gold IRA” through Superior Gold. But company representatives sold him collector’s coins at an inflated rate rather than offering him bullion, and it took more than a year and numerous phone calls before the coins were delivered to the trust company that was to hold them, he said. Siry estimates the actual value of the gold, when it finally arrived, as a little more than half of what he paid for it. “It was a big mess, it was uncomfortable, and I felt kind of stupid, quite frankly, because I didn’t do enough shopping before I used them,” he said.
In another complaint the victim stated: “Nearly two years ago (Mar. 09), I purchased approx. $47, 000 worth of gold and silver coins (my entire life savings). I have yet to receive (sic) a single coin! I have been calling for years and they refuse to give me my money back or to buy my coins.”
“Receiver Dean Pucci of the law firm Jones & Mayer took control of Superior Gold’s two locations in Woodland Hills and Santa Monica, Monday afternoon,” Santa Monica officials said.” Pucci was ordered by the court to secure the assets of the business and take over its operation. The court set a hearing for December 17, 2010 to decide whether the receivership and asset freeze will remain in place until the case goes to trial.
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