True case studies of people who have been scammed by gold coin companies

Case Studies-- Now that we have learned a little about what to watch out for when dealing with a coin company, let’s look at a few tragic experiences that people have had with different gold coin companies. All these case studies are true. I have talked to these people on the phone, sometimes for hours and sometimes over a long period of time. I have changed their names for obvious reasons. Many innocent people have fallen victim to these con artists who call themselves gold coin dealers. It is not uncommon for people to have lost tens of thousands of dollars before these wolves were done devouring them. Very rarely was there any legal recourse...a happy ending. All of these case studies are sad and tragic. But they all have one common denominator: they make my blood boil.

Case Studies: Anita and the Two Wolves

First, there was Anita, a 78-year-old widow from Oregon. One day a broker from a gold coin company called her on the phone. This company stated that they were legitimate, being members of the American Numismatic Association (ANA), which is the largest non-profit numismatic organization in the world. But better yet, they claimed to be a “good Christian company,” and told her that they hold prayer meetings every morning before they start their business day. Anita, being a Christian herself, was impressed with that testimony, and she consequently trusted them from that point on. That was her first mistake. They talked her into putting almost $50,000 in MS64 and MS65, $20 Liberties and $20 St. Gaudens, at an average price per coin of $4,500. She bought 11 coins. That company, by the way, grades their own high Mint State (MS) coins. They do not use PCGS or NGC.

A few months later, Anita got a call from another gold coin company, also claiming to be a “good Christian company.” They didn’t hold prayer meetings every morning, but the owner claimed to be a believer, and so Anita automatically trusted him also. They asked her if she had ever bought any gold from another company, and she replied that she had. They asked her about the name of the company and the kind of coins she bought. She naively told them. They asked the years and the grades of the coins, and she told them. Suddenly, the broker got excited and told Anita that five of those coins were very rare, numismatic gold coins and were much more valuable than what she had paid for them.

The broker told her that he knew a number of international numismatic dealers and he would “auction off” those coins at their next auction and send her the money. He assured her that she would make a lot of money on the deal. The broker told her to send the coins to their company so the numismatic dealers could see them before they bought them. So, she sent him the coins. Two days later, the broker called back and said that he had buyers for three more of her coins. She sent them also. She didn’t hear anything for over a week, so she called to find out if they had sold her coins yet. The broker said he never received the coins and could not remember even talking to her. He asked her to send copies of her invoices on the coins, so she made duplicates and sent them to him. Another week went by and she heard nothing, so she called back, and the owner said that the broker was not with the company anymore, and he didn’t have any records of that broker dealing with her. Anita then called the State Attorney General’s office for help. Unfortunately, he couldn’t do a thing. A true story!

Case Studies: David – Twice a Victim

David, a 69 year old retired truck driver, was concerned about Y2K and wanted some gold to preserve his wealth. He called a woman whom he had heard selling gold on the radio. The thing that impressed David about this woman was the fact that she was a preacher, and she seemed sincere. She told David that the high Mint State numismatic gold coins were the best thing to buy for wealth preservation, and he bought 95 of the MS64 $20 Liberties for a total of a little over $60,000. So, David had 95 ounces of numismatic, very expensive, gold.

About six months later David got a call from a young man at another gold coin company, posing as the boss’s son. He convinced David that he had bought gold that was much too high-priced and persuaded him to convert those 95 - MS64s into old foreign gold coins that he claimed were numismatic and non-confiscatible. David now had 134 ounces of foreign bullion gold. Little did he know that he had been ripped-off two times until he called me. Fortunately, this is one of the few stories with somewhat of a happy ending. I converted his foreign bullion gold coins into 114 - $20 Liberties in the Extra Fine grade. He now has 114 ounces of private, inexpensive gold. He did lose money twice at the hands of these two wolves, but now he has 19 ounces more of private gold than before.

Case Studies: Melinda and the Bear

Melinda’s husband died leaving her $300,000 worth of stocks. Melinda was 74 years old and lived by herself in a modest home in Florida. One day a man from a gold coin company called her, the same company, by the way, that Anita had dealt with before. Melinda also was a nice Christian lady and was also duped by the aura of dealing with a good Christian company. It didn’t take her long to find out just how good and how Christian they were. All the investments Melinda had were that $300,000 in stocks. She had very little in the bank and she was living on Social Security. None of that mattered to the broker. Using high-pressure tactics and coercion, he badgered her into agreeing to buy 66 - $20 Liberties and St. Gaudens at an average price of $4,500 per coin. The total sale was only a few dollars under $300,000. After the broker got her to agree to the purchase on the phone, he put the “company attorney” on the line. The “company attorney” told Melinda that if she agreed verbally to the purchase over the phone that she was legally bound to send them a check for the full amount. She was so intimidated by the two of them that she agreed to the purchase over the phone.

I had been talking to Melinda previous to her conversation with the other company, and I called her the next day. She told me the whole story. I went off. I told her that in no way was she obligated to send them a check, that these were unscrupulous crooks who were just trying to pillage every last hard-earned cent out of her pocket. She sent me their literature and their quotes for the specific coins that she was supposed to buy from them. Right there in their literature it says that they do not use PCGS or NGC to grade their coins. They say that grading by PCGS or NGC does not guarantee the grade or the quality of the coin. So, they grade their own coins in-house. That means they can take any coin of any grade they want, put it in a $.75 plastic case, put their stamp on it, and sell it for $4,500. The small print also states that they will buy these coins back from you any time you want to sell them, but there is no guarantee that they will be able to find a buyer. And the best part is that it is all in the name of God. Needless to say, Melinda never sent her check to those wolves, and she was extremely thankful to me for saving her from their jaws.

Case Studies: Nancy Lost It All

One of my saddest moments involves a 63-year-old lady named Nancy. One day in the summer of 1998, Nancy heard me on the radio talking about Y2K. At the time I was working with another gold coin company. She called in to talk to me, but another broker lied to her and said I didn’t work there anymore, and that he could help her. She said that she was afraid of Y2K and had taken $10,000 out of the stock market and wanted to buy some survival gold coins. She told him that was all the money she had. She had no savings, no other money anywhere. She told the broker that her husband was an alcoholic and he didn’t work. She had two part time jobs just to try to make ends meet and was baby-sitting for her daughter-in-law periodically just to make a few extra dollars. The broker didn’t regard any of that. He got her on both ends, on one end with some high-priced MS63 $10 Liberties, and on the other end with some foreign gold coins. He took every penny she had.

I want to emphasize one point. I would not have sold that woman even an ounce of silver, let alone any gold. She didn’t have it to spend. I would have told her to keep her money. She was in no position to buy any gold or silver. In fact, I turn more people away than I try to sell, simply because I fear God and I have a conscience. Many people don’t have enough money to take care of their own bills to say anything of buying gold, so I turn them away. On the other hand, if someone has a great deal of discretionary money that is not earmarked for anything, I am not bashful to recommend that they protect a good portion of it with the purchase of gold.

I think by now, with these few case studies, you have a pretty good idea of some of the tactics these wolves use to shear their sheep—--you, the consuming public.