Utah Rare Coin Dealer Accused of Running Multimillion Dollar Ponzi Scheme.
Peace_dollar88
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I have Purchased from Rust Rare coins before. I have always thought them to be professional. innocent until proven guilty. This hits a little close to home.
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Never heard of them before.
Wow, that's a huge sum of money and a long run of deception.
Click on this link to see my ebay listings.
$170 million... impressive sum. Likely ruined the lives of many hard working individuals.
I was just there, bought some really nice Barber halves Tues. Great prices too. Really shocking, I have been going to Rust since I was a kid. My whole family has bought and sold a LOT of metals with Rust. None of us ever approached or made aware of the silver pool. IMO the best coin shop along the wasatch front and the whole intermountain west.
I just can’t see it. Hopefully Josh Rust who currently runs the shop was not part of it.
I agree. I have never had a bad experience with them. Prices were always more than fair.
Precious metals should always be "cash and carry".
Any other arrangement defeats the purpose of acquiring precious metals in the first place.
Confucius say, the love of money is the root of all evil. Wonder what assets they seized and if victims can expect restitution. Peace Roy
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Rust Rare Coin "misappropriated investor funds and used these funds to make payments to other investors in the manner of a Ponzi scheme, transfer money to other companies owned by Rust, and pay personal expenses," according to the statement
Living high on the hog on others money, seems like a common theme. I've seen this many times on the television series "American Greed".
Reminds me of the guy at the FUN show a few years ago who was a "gold nut". He said that he had invested in gold, because it was the only real money, and that paper was worthless. Then he said, I've got a lot of gold, and I've got the certificates to prove it!"
I asked him if he was investing in gold or investing in certificates, and what happened to his "paper is worthless" concept.
No response.
An authorized PCGS dealer, and a contributor to the Red Book.
From the Salt Lake Tribune:
His family was also swept up in one of Utah’s biggest news stories, the forgers and eventual mail bombings of Mark Hofmann. Rust’s father, Alvin, paid $150,000 to try to get the “McLellin Collection,” papers allegedly written by early Mormon apostle turned apostate William McLellin. The controversy made trading in rare Mormon artifacts difficult.
The Mysterious Egyptian Magic Coin
Coins in Movies
Coins on Television
Similar to Tulving, went from having a good reputation, to a bad one. Businesses have to work hard to maintain the same level of quality and ethics.
Futures trading is rough. I cannot predict the future, but I know what I have “in-hand” now.
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RELEASE Number
7842-18
November 16, 2018
CFTC and State of Utah Charge Salt Lake City Precious Metals Dealer and His Company with Engaging in $170 Million Precious Metals Ponzi Scheme
Washington, DC — The Commodity Futures Trading Commission (CFTC) and the Utah Department of Commerce, Division of Securities, through its Attorney General, jointly filed a civil enforcement action in the U.S. District Court for the District of Utah, Central Division, against Defendants...
https://cftc.gov/PressRoom/PressReleases/7842-18
FYI. Rust Rare Coin in Orem/Provo, Utah is a completely separate company, and with different ownership than the SLC store.
Recipient of the coveted "You Suck" award, April 2009 for cherrypicking a 1833 CBHD LM-5, and April 2022 for a 1835 LM-12, and again in Aug 2012 for picking off a 1952 FS-902.
Wow. I’ve been in there before but not for a few years. I think I sold them some bullion IIRC. Can’t be too careful in this world.
How do they happen to have the same name? Are the owners both descendants of the Rust who advertised in the Numismatist for well over 50 years?
Yes, I believe they were brothers and Alvin Rust, the father would have been the one advertising in the Numismatist.
Seems to happen time and time again in this business. It's been said a million times, if you don't hold it you don't own it.
Hope they get prosecuted to the full extent of the law. Sadly, "white collar" crimes rarely do.
Call in Donnie and Marie! They are sweaky clean.....
Where are Laura’s comments?
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Utah Rare Coin Dealer Accused of Running Multimillion Dollar Ponzi Scheme.
Peace_dollar88 443 views 19 comments Most recent by specialist November 16, 2018 2:21PM
You do not like paper so you get PMs. Only they are paper PMs. Hummmm.
I also saw that and was waiting on the message to appear.
First . . yes, of course. Innocent until proven guilty. Absolutely. But . . . there seems to be quite a lot of smoke for no fire at all. Hoping for whatever may be the 'best'.
This has been ripping me up all day. Got a text during my 1st period at school . . . teaching a bit of vocab to my sophs. Stared at my phone incredulously . . . went to DesNews.com to see the story and just paced around my room trying to teach. Stunned beyond belief. Years ago, I was the ANA Sec. 25 Rep back when they had that program. I would evaluate collections (for free) and then would inevitably be asked, "Where would you take this to sell it?" I never wavered . . . . "Rust Coin, for sure." I probably sent 30-40 collections there in the last 15 years. Wonderful people (I am sure they still are), and back 'in the day' they would hang a little Ziplock bag for me in the back room and when nice toned stuff came in, it would go in that bag. Sold to me cheaply . . . . and the bulk of those Morgans went to another shop in SLC that made murderously huge profits off them after I sold a few. Many memories . . . .
I watched Larry Miller (the late Utah Jazz owner) drop about $250k in there once (1893-S Morgie???) . . .
I was looking through a new PCGS box of common Indian Cents in 63-64RB years ago. Little $35 coins . . . and in the back was a single Morgie hiding there. 1884-S in PC 64PL. I gulped, and showed it to Gaylen . . . saying, while coughing . . . "Um, what is this doing in here?" He laughed . . . .
That Doily Mormon $5 gold that many of you have seen and fawned over? Yup . . . had a shot at that for a song the day it came in before any of you had seen it, but it would have required moving a bit of money around. I declined. Bad mistake. They helped me with a few Doilies.
So many great people there over the years, helping so many numismatists and caring so much. It is for this reason I am just heartbroken. I hope there is some hope or positivity for the employees, as I have no idea what will happen with these slow wheels of investigation and/or justice.
So many great times walking through those doors. I am just sick . . . .
Drunner
And yes . . . . the Provo shop (Brian Rust) is brother to Gaylen, but their shops diverged many years ago. Not involved in any way. Alvin was dad . . . and you all know or can research his past, contributions, and history in numismatics. The family has had several generations of solid numismatists . . . preeminent in the intermountain west. That is why this is so challenging to wrap my head around . . . . . .
Drunner
Oh my, that's a huge sum of money, glad it was stopped before others were affected !!!
I just don’t get it. You read these stories and in every single one, it took a good bit of thought and effort to cheat. If they’d have out that much into doing things honestly, they’d have made a good deal of money. Maybe not as much as the cheat, but then they wouldn’t be afraid of bending over in the shower. I just don’t get it.
Sometimes greed just wins out in the end. A silver pool that did not exist. I keep thinking of Bernie Maddoff
a.k.a "The BUFFINATOR"
Incredible.... That is the reason my PM's are in my possession..... I just do not trust these 'pools', 'funds', certificates, etc.. Sad to hear that likely a lot of good people will suffer because of this.... Cheers, RickO
I like what the guy said, "you don't own it if you can't hold it". The only problem with silver is it starts taking up a lot of room in any quantity. I've got a roll of each year of SE's from when they started in 86 and it's starting to get a bit bulky. Wish they were all rolls of gold eagles though!
Let's see... If returns were 25% percent, up to 40% and one bought in more than 3 years ago. one would be ahead of the game.
I wonder if they'll go back to early "investors" to disgorge profits.
Check out my current listings: https://ebay.com/sch/khunt/m.html?_ipg=200&_sop=12&_rdc=1
It might be time for me to change my forum name.....
Recipient of the coveted "You Suck" award, April 2009 for cherrypicking a 1833 CBHD LM-5, and April 2022 for a 1835 LM-12, and again in Aug 2012 for picking off a 1952 FS-902.
That is why I used 5 gallon paint cans in the garage to store Gold Eagles. Too heavy to move.
I could not tell from the article if the investment fund started as a scam, or if it turned into one trying to maintain returns. It also is confusing with how much money was involved, because of the churning.
FWIW
The complaint as filed, “IN THE UNITED STATES DISTRICT COURT, DISTRICT OF UTAH, CENTRAL DIVISION”
https://www.cftc.gov/sites/default/files/2018-11/enfrrarecoinorder111518.pdf
Looks like Gaylen and his immediate family took advantage of the good family name to sucker in investors. Brother Brian must be devastated.
and . . . .
The Complaint listing the others just breaks my heart. One in particular on that list. Of course . . . yes, I know . . . 'innocent until' . . .etc.
But I also think of potential victims in this culturally-prone area (we are the nexus of pyramid schemes worldwide) who may have sacrificed life savings . . retirement . . children's tuition . . elderly care . . . . . .
One of the most shocking events I have become aware of.
Drunner
Unless that purpose is GREED.
DUE DILIGENCE. This is what happens when you don't use it.
Drunner'
That $250k dropper by LHM - it was for a 1794 Bust Dollar PCGS62 - Brian showed me the coin. Easily MS64 today and a census coin. Original luster and centering. I can't remember how he got it out of my hands.
Yes, I too have been churning this through my head the last couple of days. I have known the Rusts since the early '80s. Al must be beside himself. I can see how this can happen, and they have put a lot of money into a new shop (the smoke), but you do hope that the effects of tis will be limited in scope and people.
There was a coin shop in Stockton, CA that ...guaranteed,,,, (in writing) that every coin bought from them would appreciate at a 20% rate ....in perpetuity.
They got a LOT of people with that. No one questioned the premise.
Tulving's reputation may have been "good" to newbies in the 2002-2012 era when he entered into the bullion market on rising bullion prices. And it all collapsed on falling prices in 2013-2015 as they got trapped. But Tulving did the same basic thing back in the later 1980's and early 1990's selling "investment" packages of coins via Coin World. That didn't work out well for many collectors as you could imagine....and the FTC shut down his operation. So even though he came back 10 yrs later, I never forgot or forgave him for that nor would I have ever done business with his firm.
When coin markets are weak (as they've generally been from Sept 2008 to 2018) be very leery on who you consign to, give credit to, etc. Many previously well-intentioned dealers got on the wrong side of the coin/bullion markets and just kept digging deeper holes to try and find a way out. Shades of Renato Ruiz and El Paso Coin Galleries from decades past.
Alvin was clearly a victim in that matter. He even had to go back and add an addendum to a book he had published which had included Hofmann as a source for some of the information provided by Hoffmann that turned out to be false.
Listening to the KSL news broadcast it sounds like family members are among those facing losses from the "silver pool" that is the subject of the recent court filing. Would not be surprised to learn those include the brother in Orem and parents (Alvin and Lauretta) who just celebrated their 60th wedding anniversary last month.
As Finn has posted with eloquence . . . . . greed and excess seem to be a driving force in those who are on the wrong side of the industry. I hesitate to pop the thread to the top . . . but it has such relevance to EVERY shop, consumer, and possible investor. If this can happen to a business like Rust Coin, NO ONE is safe . . . no matter what you think. As Finn has pointed out well . . . . if you are an investor and do not take physical control of your metal (despite the weight of silver . .yada, yada, yada) . . .you are asking for trouble. Hard times present hard options . . . . . but should also induce caution !!!!
Drunner
Here is the number one problem with someone claiming 25% returns or higher: If someone can legitimately generate consistent returns of 25% or more, they do not need your money. If I could generate 25% returns I would use my money and grow rich, and keep all others out.
I’m gonna assume that’s a typo because said coin doesn’t exist
Maybe not now, but I held it in my two hands. I remember asking if they got $250K or it, and Brian said just a bit under. You believe what you want, and I will believe what I saw. Drunner knows me. I don't make up stories.
TDN is right. Was it 1795 perhaps? Or was it a Flowing Hair?
Yes, sorry, a Flowing Hair Dollar. Bust was the type after that type.
Had a chat with another SLC dealer today. Just happened to drop past his shop . . . . had not thought of the current situation.
Looks like Rust is finished . . . I am sorry. So many years of trust . . .and now . . . nothing.
Drunner
TDN,
My customer, whom you know, has the 62+
I think you can refer to 1794-95 FH dollars as Bust Dollars?