Goldline metals dealer is charged
Prosecutors have filed criminal charges against Goldline International Inc., a Santa Monica company that is one of the nation’s largest gold dealers, for allegedly tricking customers into buying gold coins at inflated prices.
The Santa Monica city attorney’s office accused Goldline of running a “bait and switch” operation in which customers seeking to invest in gold bullion were instead sold gold coins that were marked up more than 50%.
The company, which used radio talk show host Glenn Beck as a pitchman, has seen sales soar in recent years along with the price of gold. In one ad campaign, Beck said Goldline was “a top-notch organization” and in another said it was the “only gold company I recommend and use.”
Beck did not respond to an email seeking comment for this story.
The 19-count criminal complaint accused Goldline Chief Executive Scott Carter and five other current and former employees of promoting coins as a better investment than bullion without disclosing the markup.
Goldline, which had more than $500 million in annual sales, denied wrongdoing and vowed to fight the charges. Founded in 1960, the company employs more than 300 people.
“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,” Brian Crumbaker, the company’s executive vice president, said in a statement.
“We believe Goldline has industry best practices in customer disclosures enabling the most informed decisions.”
Among the charges against Goldline was one misdemeanor count of elder abuse for allegedly defrauding a client in July 2011. Prosecutors also accused the company of falsely promoting its coins as “rare” and claiming that bullion could be seized by the government while coins could not.
The company encouraged salespeople to steer customers into the overpriced coins by offering commissions on coin sales that were 2,000% more than the commissions for bullion sales, the complaint alleged.
Also accused in the criminal complaint were Goldline’s former CEO Mark Albarian, executives Robert Fazio and Luis Beeli, and sales agents Charles Boratgis and Stephanie Howard. Each of the defendants is scheduled to appear in court Jan. 4 for arraignment. Albarian could not immediately be reached.
Gold prices have soared in recent years, along with other precious metals. Just this year, gold has risen 22% to $1,728.70 an ounce on Wednesday.
