Coinex Chief Jailed After Disobeying Judge’s Order
The head of a West Hollywood company that sells contracts for investments in coins and precious metals has been jailed for failing to set up an account covering possible damages from a customer’s lawsuit.
Edward Mazur, chief executive of Coinex International, was jailed Monday for contempt of court. Mazur and Coinex had been ordered to turn over $260,250 or a corporate surety bond for the same amount to the federal court registry in Los Angeles.
Judge A. Wallace Tashima had issued a temporary restraining order in August requiring the deposit and freezing Coinex’s assets, said Grace Carter, a lawyer representing Robert S. Richard, who filed suit Aug. 9 against Coinex. Mazur and Coinex were first ruled to be in contempt of court on Sept. 19 and were fined $500 for each day that the $260,250 deposit was not made, Carter said.
Mazur’s attorney, Robert Sills, said Mazur hasn’t paid the court because “he does not have, at this time, the personal cash resources to make a deposit like that.”
Coinex is under investigation for possible securities laws violations. An affidavit filed in Los Angeles Superior Court by the state Department of Corporations accuses Coinex and its officers of unlawfully selling coin investment contracts as securities and “using investors’ monies for their own account and personal benefit.”
Richard’s suit accuses Coinex of violations of federal commodities laws, fraud, racketeering and breach of contract and fiduciary duty. The suit seeks $260,250 in compensatory damages--the amount that the Alabama resident invested with Coinex to buy silver coin contracts. In addition, the suit seeks nearly $800,000 on the racketeering charge and $5 million in punitive damages.
The suit accuses Coinex of selling Richard contracts for silver coins that were “grossly overvalued,” Carter said. The coins were never delivered, she said.
Sills said Mazur denies all the accusations in the lawsuit.
The state’s affidavit also accuses Coinex of making untrue statements or omitting material facts in the sale of the coin contracts. In July, the Department of Corporations seized 70 boxes of corporate records from Coinex’s Sunset Boulevard office, and those materials are still being reviewed, a spokesman said.