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Ahhh, vindication is sweet. In July 2010 I called the Goldline scam a scam, and now it appears that investigators agree.
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.
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.
Of course, this is a scam that Mark Albarian has been involved in before. From my July, 2010 post:
Two of Goldline's executive team -- Mark Albarian and Joel Gabrelow -- were officers of Valley State Bank's Collateral Loan Division from 1984-1986. Gabrelow was also Vice President of Numismatic Lending at West Coast Bank.That time frame is, of course, when Savings and Loan Associations melted down across the country in a foreshadowing of the 2008 banking crisis. While Valley State Bank and West Coast Bank were not S&Ls, they did loan funds based on the value of numismatic coins. A 1987 article from the Los Angeles Timesconcerning an employee who embezzled a large amount of money from this division also has a description of their lending practices:
Unlike many banks, Valley State regularly lends money to investors who buy rare coins or metals such as gold, platinum and silver. Either the bank or another institution holds the metals as collateral until the 180-day loan is paid off.
I'm waiting for Glenn Beck and Fred Thompson, those glorious guardians of liberty, to be next to be served with documents. After all, Beck in particular invoked apocalyptic visions of national destruction to drive up gold prices and hawk coins. It would be so very just to see him caught in the net, wouldn't it?