Holy s**t...this has a major impact on me. I purchased a high-end Morgan from them a couple of months ago and have been making installment payments to them....sent them $1,500.00 about 10 days ago. Interestingly enough, I requested another installment invoice from them on Monday and have yet to receive it, which I thought was odd as they usually respond quickly....now I know why. The article says all of their assets have been frozen by the court....I am going to get screwed. Might be time for a charge-back on the credit card.
@DRUNNER said:
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
I drove by the place on Wed, peeked inside the store windows. Place has been emptied out and is dark. No notice on the doors or any indication it is out of business.
Reading the CFTC filing, the "silver pool" was mostly a scam, some silver was purchased in earlier years, but nothing from 2016 onward. All immediate family members of Gaylen Rust have been charged. All assets, bank accounts and anything of value seized. This company is down and out. Their reputations tarnished / ruined for good. I stopped by Monarch Coin later and talked to some of the staff. They were sad to see Rust go and the situation in general, but oddly they smiled when saying it.
Silver has been a huge dud for years, how did investors think they were generating returns by buying physical silver and reselling it when it was high and buying low? I didn't know Rust could see the future?
I wonder how many people had coins / currency on consignment with Rust? I bought coins on consignment two days before assets were seized. Somehow I doubt the consignees will ever get that money for the coins I paid Rust for.
@BigBaz said:
Holy s**t...this has a major impact on me. I purchased a high-end Morgan from them a couple of months ago and have been making installment payments to them....sent them $1,500.00 about 10 days ago. Interestingly enough, I requested another installment invoice from them on Monday and have yet to receive it, which I thought was odd as they usually respond quickly....now I know why. The article says all of their assets have been frozen by the court....I am going to get screwed. Might be time for a charge-back on the credit card.
So let me get this straight, you bought a coin, have a payment plan and have been making payments with your credit card?
@DRUNNER said:
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
I drove by the place on Wed, peeked inside the store windows. Place has been emptied out and is dark. No notice on the doors or any indication it is out of business.
Reading the CFTC filing, the "silver pool" was mostly a scam, some silver was purchased in earlier years, but nothing from 2016 onward. All immediate family members of Gaylen Rust have been charged. All assets, bank accounts and anything of value seized. This company is down and out. Their reputations tarnished / ruined for good. I stopped by Monarch Coin later and talked to some of the staff. They were sad to see Rust go and the situation in general, but oddly they smiled when saying it.
Silver has been a huge dud for years, how did investors think they were generating returns by buying physical silver and reselling it when it was high and buying low? I didn't know Rust could see the future?
I wonder how many people had coins / currency on consignment with Rust? I bought coins on consignment two days before assets were seized. Somehow I doubt the consignees will ever get that money for the coins I paid Rust for.
I know monarch coins staff well and I’m sure they were genuine in being sad over the situation.
@bestday said:
my dealer friend said today there are other dealers not in good shape,,,, his big whale buyers trimmed their coin buying this year ,,,,
I know almost nothing about the coin business.
As I've stated before, I mainly buy Drek / gold commodity $20 gold pieces. the closer to spot the better.
However, every once in awhile I take a small flyer on a premium gold coin:
In recent years I've bought an MS63 Central America, an 1851 - O, and a 1862-S MS 55 and MS53 all $20 gold slabbed. Nothing crazy but still a good sized premium to generic gold.
My purchases have mainly been through Heritage. It seems no matter what I have bought in recent years, the prices continue to fall on the dates I've bought.
In recent months I've seen a slew of $20 gold CC;'s being auctioned off. My only guess is that the dealers no longer have an interest or the capital to support the "low end" coin market?
Even the premiums in my generic gold buys (I've bought quite a bit over the last 5 years) have fallen to a relatively small premium.
I'm really just speculating as I have no info but it seems to me that there is little retail interest in gold while the only real buyers are the central banks? Perhaps a 7 year bear market in gold versus a 10 year bull market in stocks isn't good for business?
@DRUNNER said:
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
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.
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?
Maybe now people will see this and start to request their physical silver to be made available to them. This could be the start of the end for many firms making the same claims. I have seen this on a small scale. Lets have everyone request their physical silver and lets see what happens.
Most philanthropy is great! I do hope that all philanthropic organizations are formed for the best intentions and that the monies involved is not sourced through ill-gotten means.
The shop had cultivated quite a well-earned reputation going back all the way to Alvin Rust of being numismatically sound and a great place to pick up the coins you needed, from hole-fillers through to the greatest rarities. I enjoyed many visits and picked up most of the keys to my Morgan Set, Commems, and beautifully toned pieces. Also, buying and selling gold and silver was always easy and fair.
The problem always seems to develop when you do not take physical possession of the metal. This isn't the first time . . . and it certainly won't be the last.
@Hemispherical said:
Most philanthropy is great! I do hope that all philanthropic organizations are formed for the best intentions and that the monies involved is not sourced through ill-gotten means.
I agree with much of what you’re saying. Big-ticket white-collar crime is not victimless. I had a neighbor who retired and within a year or two lost it all in a similar Ponzi scheme that a former classmate of mine set up. A couple of days before Christmas he went home and put a bullet through his head. Apparently, that way the life insurance would at least take care of his family. What a senseless tragedy.
The disincentive to steal on this level should be clear and profound.
This is scam is the same as one that was perpetrated by a guy, who advertised with a Mexican flair, who called himself “the leetal profit dealer” many years ago. He had investors paying into to a fund where he said he was pooling a lot of gold. As it turned out there was no gold, only an empty bank account for the “the leetal profit dealer” who went on the lamb.
The moral of the story - If you invest in precious metals, take physical charge of them. Don’t think that there really is a pot at the end of the rainbow that contains the fruits of your investments.
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
@BillJones said:
This is scam is the same as one that was perpetrated by a guy, who advertised with a Mexican flair, who called himself “the leetal profit dealer” many years ago. He had investors paying into to a fund where he said he was pooling a lot of gold. As it turned out there was no gold, only an empty bank account for the “the leetal profit dealer” who went on the lamb.
The moral of the story - If you invest in precious metals, take physical charge of them. Don’t think that there really is a pot at the end of the rainbow that contains the fruits of your investments.
Renato Ruiz, El Paso Coin Company. I was with Coin World when he split in the Summer of 1974. I was still with the Advertising Dept. and had designed his two-page centerfold ad for the ANA Convention issue.
There were rumors that he owed a lot of money to “the wrong people,” aka gangsters, probably mafia. Disappeared back to Mexico and was never seen again.
Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
I can see how a person who’s planning on disappearing plans on getting out of a Ponzi scheme but how about someone with a generational family brick an mortar shop? I would think that’s basically like lighting it on fire when the merry go round stops. Or like others have said, pretty good pay for just a few years in the clink.
For what it’s worth, I’ve been to that shop in the past. Didn’t buy much. Seemed like a normal coin shop.
Silver dealers and gold dealers that make promises of any sort as to future value are cousins of psychics. Neither one can do it alone and require your capital to make a living. If they really knew any more than 99.9999999999% of earthlings they would not rely on you. They'd just go it alone and get rich. How many psychics do you know have it rich on anything? Zero.
bob
PS: Did you all hear about that new silver lode in S America? Vein is 100 feet tall and 200 feet wide and miles long. So, you think that silver will become scarce or that we will run short of it? Oh, and it's often recycled.
Registry: CC lowballs (boblindstrom), bobinvegas1989@yahoo.com
@WildIdea said:
I can see how a person who’s planning on disappearing plans on getting out of a Ponzi scheme but how about someone with a generational family brick an mortar shop? I would think that’s basically like lighting it on fire when the merry go round stops. Or like others have said, pretty good pay for just a few years in the clink.
For what it’s worth, I’ve been to that shop in the past. Didn’t buy much. Seemed like a normal coin shop.
@WildIdea said:
I can see how a person who’s planning on disappearing plans on getting out of a Ponzi scheme but how about someone with a generational family brick an mortar shop? I would think that’s basically like lighting it on fire when the merry go round stops. Or like others have said, pretty good pay for just a few years in the clink.
For what it’s worth, I’ve been to that shop in the past. Didn’t buy much. Seemed like a normal coin shop.
I think many of times, these schemes start out honest and they either borrow or loose the investors money, then their plan is to keep going so they can earn back what they lost. Kind of like the Vegas gambler that is sure their luck is going to turn any moment.
@BigBaz said:
Holy s**t...this has a major impact on me. I purchased a high-end Morgan from them a couple of months ago and have been making installment payments to them....sent them $1,500.00 about 10 days ago. Interestingly enough, I requested another installment invoice from them on Monday and have yet to receive it, which I thought was odd as they usually respond quickly....now I know why. The article says all of their assets have been frozen by the court....I am going to get screwed. Might be time for a charge-back on the credit card.
So let me get this straight, you bought a coin, have a payment plan and have been making payments with your credit card?
The dream coin customer.
The pardon is for tyrants. They like to declare pardons on holidays, such as the birthday of the dictator, or Christ, or the Revolution. Dictators should be encouraged to keep it up. And we should be encouraged to remember that the promiscuous dispensation of clemency is not a sign of political liberality. It is instead one of those valuable, identifying marks of tyranny.
Charles Krauthammer
FWIW. This may go on for awhile a lot of people lost their hard earned money and are trying to get something back. $170 million is alot of money. So sad.
——-
“Investors who lost money in coin dealer’s alleged silver Ponzi scheme sue Zions Bank, saying bankers ignored warning signs
Twenty investors who lost money in a Utah rare-coin dealer’s alleged $170 million Ponzi scheme are suing Zions Bank, claiming bankers ignored red flags in the dealer’s deposits and withdrawals that would have exposed the con game.
The investors are suing to recoup some of the money they say they lost in a scheme revealed in November, when the U.S. Securities and Exchange Commission filed a civil complaint against Gaylen Dean Rust and his Salt Lake City company, Rust Rare Coin Inc.“
"Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment."
Impossible earnings; that describes the "silver pool", among many other red flags.
I have never bean to Utah but I saw images of the coin shop and it looked so cool, almost coin museum like. It’s a shame that such a nice coin shop had to close.
@Hemispherical said:
FWIW. This may go on for awhile a lot of people lost their hard earned money and are trying to get something back. $170 million is alot of money. So sad.
——-
“Investors who lost money in coin dealer’s alleged silver Ponzi scheme sue Zions Bank, saying bankers ignored warning signs
Twenty investors who lost money in a Utah rare-coin dealer’s alleged $170 million Ponzi scheme are suing Zions Bank, claiming bankers ignored red flags in the dealer’s deposits and withdrawals that would have exposed the con game.
The investors are suing to recoup some of the money they say they lost in a scheme revealed in November, when the U.S. Securities and Exchange Commission filed a civil complaint against Gaylen Dean Rust and his Salt Lake City company, Rust Rare Coin Inc.“
I do not think the bank could be held liable. They just had a customer with a high cash flow business buying and selling inventory. They are not a CPA guaranteeing balance sheets.
As for the bank, it's crazy to think they should be held responsible. They're not privy to the books of any business on such an intimate level. It's one thing if they are regularly dealing with 8 figures transfers from Colombia or something like. And if they held up business or froze accounts will nilly, I could see much more of an actual liability to the account holders. The primary individuals responsible are Rust, and the victims that only saw dollar signs and thought with greed and not with any sense.
Also, I find it odd that a coin shop's name would have "rust" in it. Just sounds weird.
It is crazy, when you consider that the "investors" themselves had all the access far ahead of Zions Bank. All they had to do earlier is what they are now demanding of Zions.
Something like this; "Uhhh, Gaylen, do you have audited financials you can provide for this investment pool?" "Are you licensed to sell investments to non-accredited investors?"
@Zoins said:
I wonder if this started with telling a “white lie” to their customers, and if so, what instruction it could provide to other dealers doing the same.
I don't think this scheme had much to do with anything related to dealers or numismatics. Rust touted a trading algorithm that always made the right trades. The scheme was to pool investor money, buy silver bullion and store that bullion at a Brinks repository located in Salt Lake City. What I don't get is why buy physical silver at all? If there were some algorithm, Rust could have traded the paper markets all the same without the hassle of tons and tons of physical silver (more than could have even fit at Brinks) removing and adding physical bullion constantly.
I think Rust simply married the two concepts (paper trading and physical bullion) into one concept that investors would believe in. If you believe that your money is backed by a physical asset, a lot of anxiety and worries go away.
Most board members here, and almost every bullion nut I have met has one common refrain: "It isn't yours unless you have physical possession". I bought coins and bullion (sold to them also) from Rust over the years. When you buy physical bullion, pay in cash, there is almost no way for the potential of fraud. You can look down touch your silver and the dealer can look down and touch the cash you are handing off. Near perfection.
This was a con game that presented all sorts of red flags that investors simply ignored.
Rust Rare Coin had their own silver rounds as well. Anyone knows who minted these? Will these become collectible now that they are no longer in business?
They charged them today I am so surprised how quite they have kept this and looks like they are going very easier on them unless there are more charges to come. not one charge has to do with all the money they stole and life's ruined just money laundering I would assume the people that lost everything are upset.
@oldstandard said:
They charged them today I am so surprised how quite they have kept this and looks like they are going very easier on them unless there are more charges to come. not one charge has to do with all the money they stole and life's ruined just money laundering I would assume the people that lost everything are upset.
People affected are pursuing remedies. Hopefully, they can get something back.
@thefinn said:
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.
@tradedollarnut said:
I’m gonna assume that’s a typo because said coin doesn’t exist
Writing as a former Utahn (I lived in northern Utah for 19 years), I can only say that I am shocked and that I believe that many (most?) of Rust's 'marks were LDS, and that he took advantage of this.
Member: EAC, NBS, C4, CWTS, ANA
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
@LanceNewmanOCC said:
why is it, in just the 10 or so years i've actively been in numismatics, i recall almost half a dozen similar situations to this one?
those are just the ones i read about here.
"if you don't hold it, you don't own it", it is as simple as that.
Comments
Holy s**t...this has a major impact on me. I purchased a high-end Morgan from them a couple of months ago and have been making installment payments to them....sent them $1,500.00 about 10 days ago. Interestingly enough, I requested another installment invoice from them on Monday and have yet to receive it, which I thought was odd as they usually respond quickly....now I know why. The article says all of their assets have been frozen by the court....I am going to get screwed. Might be time for a charge-back on the credit card.
Very likely
my dealer friend said today there are other dealers not in good shape,,,, his big whale buyers trimmed their coin buying this year ,,,,
I drove by the place on Wed, peeked inside the store windows. Place has been emptied out and is dark. No notice on the doors or any indication it is out of business.
Reading the CFTC filing, the "silver pool" was mostly a scam, some silver was purchased in earlier years, but nothing from 2016 onward. All immediate family members of Gaylen Rust have been charged. All assets, bank accounts and anything of value seized. This company is down and out. Their reputations tarnished / ruined for good. I stopped by Monarch Coin later and talked to some of the staff. They were sad to see Rust go and the situation in general, but oddly they smiled when saying it.
Silver has been a huge dud for years, how did investors think they were generating returns by buying physical silver and reselling it when it was high and buying low? I didn't know Rust could see the future?
I wonder how many people had coins / currency on consignment with Rust? I bought coins on consignment two days before assets were seized. Somehow I doubt the consignees will ever get that money for the coins I paid Rust for.
So let me get this straight, you bought a coin, have a payment plan and have been making payments with your credit card?
I know monarch coins staff well and I’m sure they were genuine in being sad over the situation.
Sounds like they knocked the 'T' right off of 'Trust'.
Check out my current listings: https://ebay.com/sch/khunt/m.html?_ipg=200&_sop=12&_rdc=1
Everyone enjoys a little Schadenfreude.
I know almost nothing about the coin business.
As I've stated before, I mainly buy Drek / gold commodity $20 gold pieces. the closer to spot the better.
However, every once in awhile I take a small flyer on a premium gold coin:
In recent years I've bought an MS63 Central America, an 1851 - O, and a 1862-S MS 55 and MS53 all $20 gold slabbed. Nothing crazy but still a good sized premium to generic gold.
My purchases have mainly been through Heritage. It seems no matter what I have bought in recent years, the prices continue to fall on the dates I've bought.
In recent months I've seen a slew of $20 gold CC;'s being auctioned off. My only guess is that the dealers no longer have an interest or the capital to support the "low end" coin market?
Even the premiums in my generic gold buys (I've bought quite a bit over the last 5 years) have fallen to a relatively small premium.
I'm really just speculating as I have no info but it seems to me that there is little retail interest in gold while the only real buyers are the central banks? Perhaps a 7 year bear market in gold versus a 10 year bull market in stocks isn't good for business?
just my 2 cts from observations.
Yep, FH. Too many things running through my head.
Maybe now people will see this and start to request their physical silver to be made available to them. This could be the start of the end for many firms making the same claims. I have seen this on a small scale. Lets have everyone request their physical silver and lets see what happens.
Most philanthropy is great! I do hope that all philanthropic organizations are formed for the best intentions and that the monies involved is not sourced through ill-gotten means.
https://history.cfac.byu.edu/index.php/Gaylen_Rust
https://www.legacymusicalliance.org/about-us/board-of-directors/
The implications from the CFTC document are bad enough, but you do not want to potentially get the IRS involved.
“Oh! What a tangled web we weave”
Had metal prices risen over the years, the ponzi would still be going. The tide goes out when prices go low.
The shop had cultivated quite a well-earned reputation going back all the way to Alvin Rust of being numismatically sound and a great place to pick up the coins you needed, from hole-fillers through to the greatest rarities. I enjoyed many visits and picked up most of the keys to my Morgan Set, Commems, and beautifully toned pieces. Also, buying and selling gold and silver was always easy and fair.
The problem always seems to develop when you do not take physical possession of the metal. This isn't the first time . . . and it certainly won't be the last.
Drunner
I am pretty sure the IRS will look at this, $170 million is a lot of potentially un-taxed income.
I always hate to see these situations, this will most likely be a life changing event for some of the investors.
I agree with much of what you’re saying. Big-ticket white-collar crime is not victimless. I had a neighbor who retired and within a year or two lost it all in a similar Ponzi scheme that a former classmate of mine set up. A couple of days before Christmas he went home and put a bullet through his head. Apparently, that way the life insurance would at least take care of his family. What a senseless tragedy.
The disincentive to steal on this level should be clear and profound.
This is scam is the same as one that was perpetrated by a guy, who advertised with a Mexican flair, who called himself “the leetal profit dealer” many years ago. He had investors paying into to a fund where he said he was pooling a lot of gold. As it turned out there was no gold, only an empty bank account for the “the leetal profit dealer” who went on the lamb.
The moral of the story - If you invest in precious metals, take physical charge of them. Don’t think that there really is a pot at the end of the rainbow that contains the fruits of your investments.
Like a Queen tune.... "another one bites the Rust "
Renato Ruiz, El Paso Coin Company. I was with Coin World when he split in the Summer of 1974. I was still with the Advertising Dept. and had designed his two-page centerfold ad for the ANA Convention issue.
There were rumors that he owed a lot of money to “the wrong people,” aka gangsters, probably mafia. Disappeared back to Mexico and was never seen again.
I can see how a person who’s planning on disappearing plans on getting out of a Ponzi scheme but how about someone with a generational family brick an mortar shop? I would think that’s basically like lighting it on fire when the merry go round stops. Or like others have said, pretty good pay for just a few years in the clink.
For what it’s worth, I’ve been to that shop in the past. Didn’t buy much. Seemed like a normal coin shop.
Silver dealers and gold dealers that make promises of any sort as to future value are cousins of psychics. Neither one can do it alone and require your capital to make a living. If they really knew any more than 99.9999999999% of earthlings they would not rely on you. They'd just go it alone and get rich. How many psychics do you know have it rich on anything? Zero.
bob
PS: Did you all hear about that new silver lode in S America? Vein is 100 feet tall and 200 feet wide and miles long. So, you think that silver will become scarce or that we will run short of it? Oh, and it's often recycled.
How long did Madoff live high on the hog?
I think many of times, these schemes start out honest and they either borrow or loose the investors money, then their plan is to keep going so they can earn back what they lost. Kind of like the Vegas gambler that is sure their luck is going to turn any moment.
The dream coin customer.
The pardon is for tyrants. They like to declare pardons on holidays, such as the birthday of the dictator, or Christ, or the Revolution. Dictators should be encouraged to keep it up. And we should be encouraged to remember that the promiscuous dispensation of clemency is not a sign of political liberality. It is instead one of those valuable, identifying marks of tyranny.
Charles Krauthammer
FWIW. This may go on for awhile a lot of people lost their hard earned money and are trying to get something back. $170 million is alot of money. So sad.
——-
“Investors who lost money in coin dealer’s alleged silver Ponzi scheme sue Zions Bank, saying bankers ignored warning signs
Twenty investors who lost money in a Utah rare-coin dealer’s alleged $170 million Ponzi scheme are suing Zions Bank, claiming bankers ignored red flags in the dealer’s deposits and withdrawals that would have exposed the con game.
The investors are suing to recoup some of the money they say they lost in a scheme revealed in November, when the U.S. Securities and Exchange Commission filed a civil complaint against Gaylen Dean Rust and his Salt Lake City company, Rust Rare Coin Inc.“
https://www.sltrib.com/news/2019/01/09/investors-who-lost/
The Richest man in Babylon:
"Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment."
Impossible earnings; that describes the "silver pool", among many other red flags.
I have never bean to Utah but I saw images of the coin shop and it looked so cool, almost coin museum like. It’s a shame that such a nice coin shop had to close.
To knowingly destroy so many peoples lives is absolutely horrific.
I do not think the bank could be held liable. They just had a customer with a high cash flow business buying and selling inventory. They are not a CPA guaranteeing balance sheets.
Have bought nice stuff from Rust Rare Coins too & never a problem.
It is crazy, when you consider that the "investors" themselves had all the access far ahead of Zions Bank. All they had to do earlier is what they are now demanding of Zions.
Something like this; "Uhhh, Gaylen, do you have audited financials you can provide for this investment pool?" "Are you licensed to sell investments to non-accredited investors?"
FWIW
A guess.
They lost money. That bank has money. How much money does the bank have? They have to file financial reports that are open to the public.
Latest 10-K (2017), https://www.sec.gov/Archives/edgar/data/109380/000010938018000102/zion-20171231x10k.htm
I wonder if this started with telling a “white lie” to their customers.
I don't think this scheme had much to do with anything related to dealers or numismatics. Rust touted a trading algorithm that always made the right trades. The scheme was to pool investor money, buy silver bullion and store that bullion at a Brinks repository located in Salt Lake City. What I don't get is why buy physical silver at all? If there were some algorithm, Rust could have traded the paper markets all the same without the hassle of tons and tons of physical silver (more than could have even fit at Brinks) removing and adding physical bullion constantly.
I think Rust simply married the two concepts (paper trading and physical bullion) into one concept that investors would believe in. If you believe that your money is backed by a physical asset, a lot of anxiety and worries go away.
Most board members here, and almost every bullion nut I have met has one common refrain: "It isn't yours unless you have physical possession". I bought coins and bullion (sold to them also) from Rust over the years. When you buy physical bullion, pay in cash, there is almost no way for the potential of fraud. You can look down touch your silver and the dealer can look down and touch the cash you are handing off. Near perfection.
This was a con game that presented all sorts of red flags that investors simply ignored.
https://www.ksl.com/article/46548597/rust-rare-coin-owners-face-criminal-charges-in-alleged-200m-silver-trading-scam
update
That's another bad thing about this.........it gives the good guys a bad name!
More info to @Peace_dollar88 update from the Department of Justice.
Department of Justice
U.S. Attorney’s Office
District of Utah
FOR IMMEDIATE RELEASE
Wednesday, May 8, 2019
https://www.justice.gov/usao-ut/pr/grand-jury-returns-indictment-charging-three-connection-fraudulent-silver-trading-program
Huh? I called those guys squeeky clean? Must have been really good drugs
Wow, scary story, thank you all for the heads-up and sharing your information !!!
Rust Rare Coin had their own silver rounds as well. Anyone knows who minted these? Will these become collectible now that they are no longer in business?
Here's one of their rounds:
Their website is no longer operational but here's what it looked like:
What I glean from the indictment is they took in $200 million and paid out $150 million. $50 million is out there floating around somewhere.
Incredible that this alleged scam continued for decades.
They charged them today I am so surprised how quite they have kept this and looks like they are going very easier on them unless there are more charges to come. not one charge has to do with all the money they stole and life's ruined just money laundering I would assume the people that lost everything are upset.
People affected are pursuing remedies. Hopefully, they can get something back.
https://forums.collectors.com/discussion/comment/12198945/#Comment_12198945
We see now in the Stacks announcement that it is a $1 1794 NGC MS-62.
But maybe what TDN meant is what CNN said - it's a Flowing Hair Dollar, not a Bust Dollar.
https://forums.collectors.com/discussion/1043819/3rd-yes-3-ms-1794-1-to-be-offered-for-sale-by-stacks-bowers
Where do I start?
A) it’s not a bust dollar
.B) it’s not pcgs
C) it’s not an upgrade to 64 no way no how
D) it won’t sticker
C) it won’t cross
But it’s a great coin for what it is nonetheless
why is it, in just the 10 or so years i've actively been in numismatics, i recall almost half a dozen similar situations to this one?
those are just the ones i read about here.
Writing as a former Utahn (I lived in northern Utah for 19 years), I can only say that I am shocked and that I believe that many (most?) of Rust's 'marks were LDS, and that he took advantage of this.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
"if you don't hold it, you don't own it", it is as simple as that.