Owner Bruce Sands Ordered to Pay $2 Million in Restitution and to Stay Out of the Precious Metals Business
City of Santa Monica and L.A. County prosecutors have reached a final agreement with Superior Gold Group and its owner, Bruce Sands, more than one year after a court ordered the business placed under receivership and its accounts frozen. Under the agreement, the court has entered a final judgment which requires Sands to pay $2 million in restitution to former customers, including an up-front payment of $200,000.
The case marks the second time in the past four months that Santa Monica’s Consumer Protection Unit has obtained a stipulated judgment and injunction against a nationally advertised precious metals dealer.
The judgment was signed by Judge Cesar Sarmiento of the Santa Monica Superior Court.
Under the judgment, Bruce Sands must pay between 20% and 25% of his future net income toward customer restitution.
Superior Gold Group was a national precious metals dealer based in Santa Monica and Woodland Hills, California.
In December 2010, the Santa Monica City Attorney’s Office filed a consumer protection lawsuit against Superior and its owner Bruce Sands, along with the Los Angeles County District Attorney’s Office. The suit claimed that the company was taking customers’ money for coins but providing nothing in return.
Prosecutors then obtained a preliminary injunction that froze all assets of Superior Gold and Sands. The court also appointed a Receiver, attorney Dean Pucci, to take control of the business and of Sands’s finances. At that time, Superior Gold’s operations were stopped and the business was effectively shut down.
During the next year, the Receiver and Santa Monica’s Consumer Protection Unit investigated Superior’s and Sands’s financial records and searched for assets that could be used to reimburse customers who had lost money. However, investigators were unable to locate any substantial assets.
“This result makes the most sense for consumers, and for law enforcement purposes,” said Adam Radinsky who heads Santa Monica’s Consumer Protection Unit. “We suspected going in that Sands had few remaining assets. Our main goal was to stop the wrongful practices in their tracks. We achieved that with the business being shut down and placed under court receivership.”
“With this settlement, we get what little money is available, directly to consumers, and far sooner than if we had gone to trial,” said Radinsky.
The civil lawsuit, filed under California’s Unfair Competition Law, alleged that Superior and Sands committed unlawful, unfair and fraudulent acts against consumers using three main practices:
– Inducing customers, through false and misleading statements, to buy more expensive coins instead of the basic gold bullion that customers typically wanted. This included misleading consumers into believing that the U.S. government may confiscate all gold bullion from consumers, and that certain higher-priced coins would be exempt from such confiscation.
– Charging prices far higher than fair market value for the coins while concealing that markup through false and deceptive pricing practices.
– Taking payments from customers for coins but failing to provide the coins.
The trial was to take place later this year.
More than 250 former customers of Superior Gold had filed complaints with Santa Monica’s Consumer Protection Unit. Most claimed that they never received the promised coins after paying substantial amounts of money to Superior Gold. Some customers filed their own lawsuits against Sands.
The judgment requires Bruce Sands to pay $2 million toward customer refunds. Sands must pay $200,000 up front. He then must pay 20% to 25% of his net income every year until the judgment is paid in full. Only those customers who have already filed complaints with the City Attorney’s Office, are eligible for restitution.
Under the court judgment, Superior Gold’s customers who lost money may also be eligible for a potential tax write-off. In the wake of the Bernie Madoff scandal, the IRS created a new tax exemption for fraud victims. The Superior Gold customers will be eligible to claim their losses as a tax write-off, less any restitution payments.
The court judgment also includes an injunction that prohibits Sands from owning a precious metals business, or from using any false or misleading advertising.
Superior Gold is the second national gold coin dealer against whom Santa Monica’s Consumer Protection Unit has obtained a settlement in the past four months. On February 22, 2012, Santa Monica obtained a stipulated final judgment and injunction in a consumer protection case brought against Goldline International, Inc., which is also based in Santa Monica.
Instead of using SGG’s logo as if you were providing free advertising for Bruce Sands, why don’t you interview some of us victims?
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Dear D.L.
The inclusion of the SGG logo in the article was in no way “free advertising”. The company is not only defunct, but hopefully Bruce Sands will never again defraud investors or work in the precious metals or numismatic industry.
In terms of numismatic fraud, we unfortunately get far too many emails and phone calls from victims, such as yourself, who have been over charged, not received delivery of items paid for, or just outright swindled.
In every case CoinWeek has provided information and advise on how best to address their particular situation, and we have referred many people to the Numismatic Consumer Alliance (NCA) (www.stopcoinfraud.com).
However the best tool to combat fraud is education. Using the experiences of victims, we have run dozens of articles about companies and individuals who have been accused of fraud or poor business practices, warning potential buyers and providing important information about how best to purchase precious metals and rare coins and how to select a dealer to do business with.
We fully understand the trauma and severe financial consequences many victims have suffered, and it is our hope and goal that we can prevent others from becoming victims of this kind of fraud by not just exposing the “bad guys”, but educating the public on how best to buy and sell precious metals and rare coins.
One last point about advertising. CoinWeek takes our responsibility to the collecting community very seriously, and we are proud to say that the advertisers and sponsors presented on CoinWeek are some of the best and most respected numismatic dealers and businesses in the industry.
In fact, we have turned down advertising requests from companies that we feel do not meet the high standards we set for ourselves or those reflected by our current sponsors.
Only doing business with knowledgeable, professional and reputable dealers is the best protection any buyer or seller can have.
The way the headline is written it sounds like the Superior Gold ‘Group’ accepted a settlement.
That is not true. The Superior Gold ‘Victims’ as a group are still deciding what to accept. Only the Santa Monica Attorneys office accepted a deal that looks like it was written by Bruce Sands. Bruce Sands did not pay anything. Insurance pays almost nothing, and to prevent him form working in the industry means he will probably not pay anything in the future. This settlement will only empower more dealers to ‘take the money and run’.
Your article makes the victims seem uneducated so it is their fault that their IRA money was stolen. SGG & Bruce Sands has tarnished your business, not the victims.
As far as the logo goes – If CoinWeek really was interested in protecting the consumer they would show fraudulent dealers and not cover their face with a bag.
B.H.
We reported the facts, that the City of Santa Monica and L.A. County prosecutors reached anagreement with Superior Gold Group and its owner, Bruce Sands.
The company and all of its assets, along with the assets of Bruce Sands,were frozen and seized after the Dec 2010 Lawsuit was filed. Then the court appointed a Receiver to try to locate other assets and come up with a plan to reimburse the victims.
Personally, I would have liked to see SGG and Sands criminally prosecuted, or at least get some jail time as part of any settlement, but my opinion doesn’t count.
As far as the settlement “empowering” other dealers to “take the money and run”, I don’t think so. Scum bags who steal peoples life savings and run scams do it because of greed and hubris.
On your point of making the victims seem uneducated, that is not what we said at all. Nobody is blaming the victims for this criminal activity, but there is no question in my mind that based on conversations I have had with similar victims, that some of the loses’ could have been avoided.
Finally, the image that accompanied the article was not an attempt to hide the identity of Mr. Sands. In fact we searched for a photo of him with every intention of putting his mug shot in the article, but were unable to locate an photo. So we instead took an image off of one of SGG’s You Tube videos and replaced the spokesperson with the man with a bag over his head. The only people we are trying to protect are collectors and investors.
It was determined early on that this was not viewed as a Ponzi Scheme; no big deal it was straight-up theft! The last time I checked my crime-O-meter stealing was still a crime; maybe I need to download an update for my crime-O-meter! I don’t care if the man was taking the money and contributing it to his favorite benevolent charity; which we know he wasn’t! I did not give him permission to do that with my money; the first non-faux-victim here to answer yes will be shot right on the spot?
Bruce Sands was not utilizing the money we provided him with to purchase bullion on our behalf; that is called theft, stealing, obfuscating, plundering, mis-appropriation of funding, pilfering, usurping, purloin; what part of “breaking the law” don’t these miserable attorneys freaking understand?
I feel like for the second time in two-years that I have had someone wave their hand in front of my face defending Bruce Sands victimization and both hands waving were mistaken, by silly me, to represent the hands of Justice; have I woke up in the middle of the “Twilite Zone”? Bruce Sands is not the victim here;I believe we are! That was our retirement’s and our nest-eggs that were obfuscated; not Bruce Sands!
I know exactly where you are comming from by your response. However, trust me, this group of Bruce [BS] Sands victim’s clearly do not need anyone to define a crook to us! All I needed to convice that I was dealing with a loose cannon was for Bruce Sands to threaten me with violating the “Patriot Act” at the time I had my husbands account frozen in order to keep Sands from depositing the wrong kind of metal into our account; you know the rest of the story…
I find it entirely incredulous that Mr. Rosen should choose to defend his client by having his client, Bruce Sands, proclaimed to be a victim of his own success! When in reality the day Bruce Sands started up his business he had prior pending judgments that needed to be accounted for first, and prior to his venturing out to become the ignominious entrepreneur that he would prove to be. While more than 250 victims of Bruce Sands, who hold claim legitimate impact-statements of their own were never provided a voice to being heard during the proceedings.
Mr. Sands chose to steal his victim’s money and spend it on other than the product the customer purchased; such as costly advertising, executive suites, high-rent-district real estate utilized in boiler-room operations, excessive boiler-room-commissions, personal council, spokes-holes, the good life; get my drift?
There are not words in the English Language describable as to how each of the 250 victims of Bruce Sands, Superior Gold Group, associates, affiliates, including any related Doe’s later to be determined, are feeling about this settlement reached on their behalf.
To insult the integrity of this victim by erroneously stating that his client was attempting to pay his victim’s back in 2010 is mind-boggling! This naive victim shared three days of arbitration in April, 2010 sitting right across the table from Bruce Sands, as was required by an embedded “mandatory arbitration clause” in the SGG contract. This victim was furthermore found to be the prevailing party during that arbitration and was subsequently awarded legal fees to be paid also. The suggested award, might have tripled the award amount, under the guidelines set forth defining unfair business practices; had not Bruce Sands managed to game the arbitration system. Bruce Sands was able to game the arbitration system by presenting to the arbitrator a document from Sterling Trust Company/Equity Trust Company confirming, that he had fulfilled victim’s account one day prior to the scheduled arbitration hearing; by his depositing all metals into victims FBO account at the Delaware Service Depository Company. Moreover, the day after the close of arbitration Mr. Sands managed to have the metals deposited one day prior to the hearing into victim’s account removed from victim’s account one day after close of arbitration…
When Bruce [BS] Sands was questioned about that outrageous behavior; again Sands morphed himself into a self-proclaimed victim status, at his attorneys defense, implying that it was Sands experience, that the Delaware Service Depository Company had regularly removed money from one account to another account when the depository needed to fill other outstanding accounts.
“Both Mr. Sands and the IRA Department manager asserted that this was also the first they heard of this. It is SGG’s practice and experience that precious metals, once deposited, cannot be extracted or removed without the consent of the account holder. As such, SGG immediately attempted to contact the depository to obtain an explanation. The only explanation based upon the information SGG has been given and past experience, is that the depository (DDSC) on its own volition removed the precious metals from [victims] account to fill another customer’s outstanding account balance. Both Mr. Sands and Rex Saint-Onge (IRA Department Manager) can provide declarations in support of the aforementioned facts.” This was an excerpt taken directly from the letter provided by Bruce Sands attorney; Alfred W. Sloan ll, PC…
Not one person from SGG ever attempted to supply those particular facts to us! In reality it took nearly 6 months to serve Mr. Sands papers after the award was made; in order to have the award converted to a judgment. That judgment among others and all pending suits against Superior Gold Group/Bruce Sands were stayed during the Santa Monica proceedings. Bruce Sands testified during our arbitration proceedings, “that he always instructed employees, to never provide the customer with the true price; once you do that the customer will walk down the street go elsewhere…” Bruce Sands testified in our proceedings, “that besides our retirement account he had some account’s as old as three years that had not yet been delivered to yet…” Santa Monica could not find another gold company to explain how their companies did not become victims of their own success during that period and were still able to meet their client’s needs?
I had posted nearly two years ago, that I had just witnessed the death of “The Rule of Law” being succumbed through “Mandatory Binding Arbitration.” In 2012 I believe that I have just witnessed Justice for the 250 victims of Bruce Sands assassinated through civil proceedings; civil by whose standard?
Coinweek, my compliments. You are by FAR more responsive than any of our government’s financial “watchdog” agencies; from the BBB, FTC, SEC, CFTC, FBI, etc. Thank you for listening to us and having a dialogue!
City of Santa Monica, we the victim’s of Bruce Sands, Superior Gold Group, and all Doe’s later to be determined would like to take the time to tell you that we appreciate that your City took stellar action in shutting those miscreants down!
However, how can the City of Santa Monica possibly expect any victim to sign this OPT-in Settlement Agreement the way it is worded? To release what ever meager amount of asset’s that you were able to curry up from what was left, after Bruce Sands had already transferred his assets to a family member’s trust, in order to avoid paying a judgment. That transfer of assets to a family trust was also executed the day after our arbitration closed. Oh boy! Bruce Sands was a busy little boy that day! Have you people heard of the term “FRAUDULENT CONVEYANCE”? Why didn’t you pursue those assets?
If we the card-carrying “Impact Statement Bearing” victim’s of Bruce Sands & Superior Gold Group, LLC agree to sign your silly Opt-in-agreement in order to make recovery of funds that will not even pay for a cup of Starbucks by the time I get through writing this post; we will be agreeing to release all of those idiot Doe’s 1 thru 1000, Charles Manson, and the rest of California prison population! Are you Crazy?
Thank you for your efforts in locating BS assets; and shouldn’t those assets be returned to the REAL victim’s unconditionally?
Go ahead Santa Monica make my day! And while you are at it; just ask me how I really feel!
Thank you, CoinWeek for permitting the real Bruce Sands victim’s to express their views; the Santa Monica Mirror among other blog-sites have conveniently broke at this time…
Bruce sand should be stent to a “Devil Island” aka a small compound off Santa Monica
perhaps Catalina Island and have the guards be the 250 Victims Bruce Sands-SGG.
Each Victim would get to be an caretaker of Mr. Sands for one week. I am sure after 250 week under the kind eye of the people he
defrauded we would find out where the money is.
GG