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Goldline International Inc., one of the nation’s largest retail precious metals dealers headquartered in Santa Monica, CA,  has been charged with theft and fraud in a 19-count criminal complaint filed by the Santa Monica City Attorney’s consumer protection unit.

According to an ABC News report, the consumer affairs division of the Santa Monica City Attorney’s office filed a complaint on November 1st alleging that Goldline “runs a bait and switch operation in which customers, seeking to invest in gold bullion, are switched to highly overpriced coins by using false and misleading claims.”

goldliine swiss Goldline Executives Accused of Theft and Fraud in a 19 Count Criminal ComplaintThe ABC News report continues “The company has been charged in the court filing with misdemeanors that include theft by false pretenses, false advertising, and conspiracy, the City Attorney’s office said. In addition to the charges against the company, the complaint accuses former CEO Mark Albarian, executives Robert Fazio and Luis Beeli, and salespeople Charles Boratgis and Stephanie Howard of defrauding customers. Current CEO Scott Carter is accused of making false or misleading statements. Each of the charged offenses carries a maximum penalty of one year in jail and maximum fines of between $1,000 and $10,000 per offense.”

Goldline quickly responded to the allegations in a posting on their website saying  the “complaint filed by the Santa Monica City Attorney’s office is without merit.” and that Goldline  ” will vigorously contest the allegations.”

The Goldline site continued… “Brian Crumbaker, Goldline’s Executive Vice President, said the complaint filed Tuesday has numerous errors. He noted that a core allegation of the complaint cites the company for “offering Bullion for sale on Goldline’s website with no intention of selling it. The so-called bait and switch allegation is preposterous because bullion accounts for more than 40% of the ounces of gold sold by the company during the past year.”

Goldline was the subject  of an “investigation” in April of 2010 when now former NY Congressman Anthony Weiner (NY)started looking into the sales practices of one of TV Talk show host Glen Beck’s sponsors, Goldline International . Weiners “concern” was twofold: First, that Beck and other conservative talk show/TV personalities had formed a “unholy Alliance” with Goldline by unduly influencing their trusting viewers to purchase gold from Goldline and second, that Goldline was ripping its customers off with “bait and switch ” and hard sell tactics, and “peddling overpriced collector coins.”

Basically, Beck was seen as scaring his viewers with doom and gloom analysis and then inappropriately influencing his viewers to buy gold from one of his sponsors, who were paying Beck a handsome sponsorship fee. In short, Weiner accused Beck of being a shill for Goldline, who in turn was running a scam and grossly overcharging customers. Many people at the time considered Weirner’s “investigation” little more than political theater aimed at discrediting Beck based on the sales techniques of one of his sponsors.

Subsequent  to the Weiner assault, Brian Ross at ABC News ran and “expose” about Beck and Goldline (07-19-10) outlining in greater detail the “questionable” practices of Goldline and the connection to Beck and other conservative TV and Radio personalities. The report included interviews with individuals who were “ripped off”, each describing pressure tactics used by the Goldline sales people: directing them away from low margin bullion coins to the high margin foreign gold coins.

After a short lived congressional  hearing, amid the consistent denial of any wrongdoing by Goldline or Beck, the story sort of faded away until yesterday’s surprise announcement.

Although Weiners attacks in 2010 might have been uncomfortable for Goldline at the time, yesterdays criminal complaint is a whole other matter. Goldline will not be able to rely on the  “we have an A+ rating from the Better Business Bureau” defense. These are serious charges directed at the upper level  current and former executives of the firm and a couple of the salespeople.

Goldline is not one of those shady backroom telemarketing companies we occasionally read about getting busted in the newspapers. This is a company with a long history and over 500 Million in  annual sales.

According to ABC News “In filing the complaint, officials have opened a new front in a long-running and very public dispute over the way Goldline has turned the sale of gold into a massive retail operation…..At the heart of the complaint is the suggestion that Goldline profits not so much by selling pure gold bullion, but by persuading customers who want to capitalize on the rising value of gold to purchase collectable coins. The coins are subject to a significant mark-up in price, and several Goldline customers told ABC News that they found it difficult or impossible to resell those coins without taking a loss.”

Whatever the reality of the situation turns out to be, the spotlight will certainly be shining on the sales practices within the bullion and rare coin industry, warranted or not.

 

 

 

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14 Comments

  1. exemployee says:

    The fact is, Goldline does train the sales reps to turn over “TO” customers to a senior account executives for the “up sell” . They also train sales people to dance around the 35% markup which every employee knows it’s actually more like 55%. Goldline also trains all the account executives to “get the money in” first THEN switch the customer to collectible coins-AKA: bait and switch. All Goldline reps were let go if we sold too much bullion and not enough collectible. Every account executive preyed that the customer didn’t “shop around” because we all knew Goldline had the highest prices in the industry. It’s a typical boiler room, High pressure telemarketing job. I know because I worked there and I went through their training. If the courts ask any old employees to testify, we would all say the same thing because it’s true. That is what the sales training consisted of. Good luck Goldline!

  2. Richard says:

    What is even more scary is you give claim to the thought that because they are listed by the Better Business Bureau as A1 it means something. The BBB is NOT a government organization. You pay “dues” to become a member. Who do you think the BBB is going to protect? The consumer who pays them nothing or the business who keeps them in Business. Like Mel Brooks said in Blazing Saddles, “Gentlemen, we have to protect our phony baloney jobs”.

    • Pogino says:

      I too have been fooled by goldline by kevin. And richard. I was fooled to invest thousandsand the value is notevenhalf of it.
      Iwill file asuitagainst goldline too.

      • Chris Olufsen says:

        I was one of those that they got my money and haven’t recieved anything. It sure changes my mind about Glen Beck. Well I was dumb enough to buy their gold. Have yet to recieve it. I guess its lost.

        • CoinWeek says:

          Mr. Olufsen:
          If you purvhased gold and did not recieve delivery, I would call the company straight away, provide proof of payment and demand the gold!. It is NOT lost

  3. Raz says:

    Ohh. I call to buy gold bullion, but then being weak minded and easy to manipulate, they sell me something else. Please protect me Govt!! I am too dumb to be allowed out in public… Help me.

  4. Claire says:

    Don’t Let the Better Business Bureau Profit from Corporate Greed

    How did Goldline allegedly commit a long list of criminal practices for so long, without customer complaints and consumer organizations sounding the alarm? As new investors researched Goldline’s family of precious metal products, they likely went to the Better Business Bureau (BBB) first, to check the company’s rating. The BBB listed Goldline as an “A”, showing confidence in its reliability, good service, and customer satisfaction, yet the Santa Monica City Attorney has now filed charges for significant violations. We now realize that the BBB did in fact receive more than 100 complaints against Goldline, however these were not calculated into the ranking. Instead, it appears that the BBB allows businesses to buy their BBB scores, increasing their rank and removing complains to give the appearance of excellence.

    At this time, the only people charged in the Goldline scheme include the following Goldline executives: former CEO Mark Albarian, current CEO Scott Carter, executives Robert Fazio and Luis Beeli, and salespeople Charles Boratgis and Stephanie Howard. Accusations include grand theft by false pretense, false advertising, bait and switch, elder abuse, and conspiracy. But were they the only ones to blame? The BBB’s support of Goldline through its 80 years of “pay to play” policies has profited BBB leadership as well. Perhaps these BBB executives should also be held accountable:

    Stephen A. Cox (aka Steve Cox) – President/CEO
    Beverly Baskin – Senior VP
    Genie Barton – Vice President and Director, Online Behavioral Advertising Program
    Rodney L. Davis – Senior VP Enterprise Programs
    Joseph E. Dillon – VP and CFO
    Victoria Doran – VP Brand & Digital Media
    Chris Garver – Senior VP, Chief Information Officer
    Frances Henderson – National Director, Privacy Initiatives
    Susan Kearney – Senior VP & Chief Marketing Officer
    Wayne J. Keeley – VP & Director, CARU
    Elaine Kolish – VP & Director Children’s Food & Bev
    Andrea C. Levine – Senior VP, NAD
    Brenda Linnington – Director, BBB Military Line
    Peter Marimello – VP, Electronic Retail Self Regulation Program
    C. Lee Peeler – EVP & President NARC
    Steven Salter – VP, Standards & Services
    Anaise Schroeder – VP Human Resources
    H. Art Taylor – President & CEO, BBB WGA
    Mary Lou Watkins – Senior VP, Chief of Staff
    Bennett Weiner – VP, CBBB & COO, BBB WGA
    Richard Woods – VP, General Counsel
    Vincent L. Gottuso – President, Southland BBB Office
    Mary Lou Diaz – Director of Consumer Services, Southland BBB Office
    Mr. Tom Bartholomy – President/CEO
    Ms. Janet J. Robb – President
    Ms. Jan Quintrall – President
    Mr. Matthew Fehling – President
    Mr. Edward J. Johnson, III – President and CEO

    The basic Goldline scam, as alleged by the Santa Monica City Attorney, was to draw customers in through good pricing for gold and silver bullion, but instead sell them rare coins marked up with a 2000% commission. By rating them “A”, the BBB supported this practice, and it appears to be standard business. Consider these precious metals dealers, also based in Southern California, that have high scores despite high numbers of complaints:

    Goldline International, Inc. F* Rating 73 Complaints
    Monex Deposit Company A+ Rating 69 Complaints
    Capital Gold Group, Inc. A- Rating 14 Complaints
    Lear Capital Inc. A+ Rating 55 Complaints
    Merit Financial Services A+ Rating 47 Complaints

    *Downgraded from “A” after the City Attorney’s complaint was filed.

    We cannot allow the BBB to continue to sell its ratings. You can help by acting today – contact these decision makers:

    Send a letter to The Council of Better Business Bureau, 4200 Wilson Blvd, Suite 800, Arlington, VA 22203-1838 – Phone: 703-276-0100 – Fax: 703-525-8277

    Contact your state’s Attorney General Office, and say you won’t stand for deceptive and unfair trade practices by the BBB.

    Email the Federal Trade Commission (FTC) on their convenient website https://www.ftccomplaintassistant.gov/.

    The Better Business Bureau cannot stay in business if you refuse to accept their “pay to play” tactics. Act today to do your part in protecting American consumers.

  5. agewa says:

    i dont care

  6. KO says:

    Who is to say these rare coins could not actually out perform gold in the long run ? Stockbrokers often steer clients into more volitale stocks when they are looking for safer bonds . They are not charged with a crime .

  7. Scott says:

    What the hell ever happened to “caveat emptor”? If a sales person pressures you into another product, what’s wrong with expecting intelligent people to say “no, thank you. I will not purchase that without doing some research first.” Information these days is usually pretty easy to obtain.

    “Every account executive preyed that the customer didn’t “shop around” because we all knew Goldline had the highest prices in the industry.”

    Proof positive.

  8. DDUHHH says:

    I’m starting a class action suit against McDonalds for upselling me on hot apple pies for the last two decades.

  9. Phil says:

    Goldline customers seeking to recover losses, must act immediately. Submit your case for a free review – GoldlineLawsuit.com

  10. Silhouette says:

    Hmmmm….too bad folks, I bought a load of gold from Goldline at $855 an ounce….I sold it right under $1700. I have no complaints at all.

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