@logger7 said:
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.
I believe Tulving's downfall was different in that he was selling more physical metal for delivery than he could deliver.
In the bullion business never sell what you don't hold. Many an ebay seller has learned this lesson the hard way.
This sounds like something pretty easy to prove or disprove. The pool must have records of all purchases, sales, investments, payout etc.
Those can be verified as other parties are always involved. So if they are innocent, bet the proof out there. If authorities have proof they are not, that should also be put out.
@Sonorandesertrat said:
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.
Yes, I agree with you. However, in all fairness, I would add that like you I have spent much of my life in Utah, Idaho, Wyoming, etc. Family, ranching, business, whatever. 80% of the people that I have ever met in that area are LDS. So of course that's who his marks were. Business behavior like his, I assure you is cross-denominational. No one group has the market cornered. Sad fact of life.
Alvin Rust founded Rust Rare Coins in 1966 and was one of the victims of Utah document forger Mark Hoffmann.
I believe that Alvin Rust is still alive and is in his 90's.
@WillieBoyd2 said:
Alvin Rust founded Rust Rare Coins in 1966 and was one of the victims of Utah document forger Mark Hoffmann.
I believe that Alvin Rust is still alive and is in his 90's.
He is, and very sharp. Gaylen is the odd son in not treating people like his dad. Gaylen's son Josh is a very nice, considerate man too - but greed and a belief you can keep this going forever is what makes a Ponzi scheme.
I looked through the lots. The good stuff (if there is any) must have gone somewhere else. This is mostly bulk lots, silver rounds, proof ASEs and such.
Utahn behind $200M Ponzi scheme sentenced to 19 years in prison
By Jacob Scholl, KSL.com | Posted - March 8, 2022 at 4:20 p.m.
SALT LAKE CITY — The man behind one of Utah's largest ever Ponzi schemes, which netted over $200 million from victims, now knows his sentence.
Gaylen Dean Rust, 62, was ordered Tuesday to serve 19 years in federal prison after he pleaded guilty in December to felony counts of wire fraud, money laundering and securities fraud. Rust was also ordered to pay a staggering $153 million to the 568 victims in the case.
Rust was ordered to report to a federal prison by Wednesday, according to the Utah U.S. Attorney's Office.
A federal grand jury indicted Rust, his ex-wife Denise Rust, and their son Joshua Rust in May 2019 on numerous fraud and money laundering charges, after investigators alleged that the three orchestrated a silver trading Ponzi scheme that bilked hundreds of victims for over $200 million.
In a news release Tuesday, the Utah Department of Commerce called Rust's actions one of the biggest consumer harms the department has ever seen.
@Namvet69 said:
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
I was in their store years ago and bought some stuff there. Kind of leaves you with a skuzzy feeling. A kid I went to grade school with started a similar Ponzi scheme. My old neighbor lost everything, including his joy for life, and ended up killing himself a few years back. So-called "white collar" crime is plenty devastating. People who do this deserve far worse than what they get.
@BryceM said:
I was in their store years ago and bought some stuff there. Kind of leaves you with a skuzzy feeling. A kid I went to grade school with started a similar Ponzi scheme. My old neighbor lost everything, including his joy for life, and ended up killing himself a few years back. So-called "white collar" crime is plenty devastating. People who do this deserve far worse than what they get.
.
ty for saying it. may seem a bit macabre but is nothing but accurate. lets us never forget the years and decades even, some people work to get a nice amount to have fun with and if put with the wrong person(s), can vanish permanently. of course a lot of all this is easier in retrospect.
this reinforces my rule #1. do not EVER put all yours eggs in one basket or for that matter a significant portion unless you are ok if you lose nearly all or all. (emotionally or financially)
i do try to keep white collar crime in mind when coming down hard on those committing day-to-day crimes. the day-to-day, in your face, stirs up the emotions because you can see it or at least the aftermath. white collar usually affects a larger base that is much harder to see for the average person, by comparison and gets discussed even less.
from one shapshot of the lots that were purported to have been in that may or nov? 2020 auction, there is a "chance" that some were not authentic. i tried to go through their site to verify WITHOUT saying anything first, in case they turned out not to be but their auction site https://www.salesandauction.com/ has at least a few broken links, including for past auctions. i'll dig a bit more but i have some other things to need to work on today.
@Namvest69 - if you dig through https://www.ksl.com/article/50049015/rare-coins-being-auctioned-to-help-pay-victims-of-utah-ponzi-scheme and watch the video there is some information for this. i didn't grab any numbers as my prime focus was looking for those potential counterfeits. i feel pretty confident that there were probably some significant losses selling off assets and then of course probably large amounts not recoverable from having been spent for personal use.
i'm not invested in all of this and don't want to give the impression i'm chasing anything here. just for educational and informative purposes. there have been at least several of these situations, reported even just on this forum so it is quite relevant as they add up easily to well over a billion.
ok. i do THINK this is it. https://www.bidspotter.com/en-us/auction-catalogues/bscerke/catalogue-id-erkele10051 - that sheet with gold coin matches what was in the video. what is gained to match all of this up. maybe nothing, maybe something. i'll let posterity decide. never know what one may see/learn. nothing negative for me, just facts.
seeing stuff like this doesn't give me a lot of confidence
@BryceM said:
Having looked through the auction listings, there wasn't enough there to cover more than a trivial amount of what was lost.
man your post had good timing. i was just about to post this link. i don't have my best focus so some of the stuff may have already been posted. it is taking my full forcus (whatever level it is right now) to track down what i'm looking for.
you may be interested to read about this. by his own admission, well, it is best for you to read it for yourselves.
This is really sad!
I worked with a guy- who’s father-in-law, ran a Ponzi scheme that targeted seniors.
He was caught, convicted, and sentenced to a pathetically inadeque jail sentence- imo.
Prior to that, he had spread and laundered his money far and wide and was living a nauseatingly luxurious life. His victims were NEVER compensated for their losses!
He served a short prison sentence and returned to his lavish phony lifestyle. His was a slick operator, “fine citizen”, active in the community, etc……
Watch a few episodes of ‘American Greed’. It’s FULL of this kind of stuff!
“Ponzi schemes absolutely destroy trust in the investment industry. Without trust, individuals aren't willing to participate in future opportunities and that affects our entire economy.”
–Margaret Busse
That quote, from the article posted above, is the reason why I have very seldom, if ever, trusted anyone in the “investment” community, if they make promises of exemplary returns on investments!
And, even beyond that, why, I have managed my own financial affairs, to the best of my ability, for most of my life.
I believe that this type of crime, especially when targeting hard working peoples savings, and seniors, is among the lowest, most despicable and grievous of crimes.
Ok, I’ll get off my soap box now! ;-)
This thing just brought back all those memories of my co-worker and his family stuff, and how infuriating it all was.
Happy, humble, honored and proud recipient of the “You Suck” award 10/22/2014
@nwcoast said:
Watch a few episodes of ‘American Greed’. It’s FULL of this kind of stuff!
.
thanks. i've been looking for another series to dig into and that sounds promising. a good training manual as well i bet, which is partially why i posted some of the stuff i did here.
as an example, when i go to shops/shows/antique malls/pawn shops and i see slabs like the ones above, i know to TREAD LIGHTLY. usually there are basic signs in life for things, recognizing, understanding and very importantly, acting appropriately can and usually will help us to avoid land mines and/or pitfalls.
i wasn't able to find more/better images, so i'll post it here for later research unless someone beats me to it. (imo, there are red flags in the image regarding fraud/counterfeits, at least enough to do more research)
just dumping these links below for future reference and so i don't have to go looking for them again in case i need them.
It is not clear to me where the 225M went. I see he diverted 18M to personal gain, but that is a lot of money to lose. Was it attributable to trading losses that he then covered up? Again, it is hard to hide 200M unless they were actual trading losses.
@TPRC said:
It is not clear to me where the 225M went. I see he diverted 18M to personal gain, but that is a lot of money to lose. Was it attributable to trading losses that he then covered up? Again, it is hard to hide 200M unless they were actual trading losses.
.
fwiw, all the links posted above state where some went here, some went there. the majority NOT in numismatic assets.
i didn't recall specific actual numbers being quoted often but there was a "person/group" or whatever handling the recouped funds for distribution to the investors. if someone started digging, for whatever reason, including court documents, i'm sure someone could find out. other than curiosity, not sure what good it would do. the losses were substantial to the investors.
@TPRC said:
It is not clear to me where the 225M went. I see he diverted 18M to personal gain, but that is a lot of money to lose. Was it attributable to trading losses that he then covered up? Again, it is hard to hide 200M unless they were actual trading losses.
Oftentimes people come into these schemes with the best of intentions, get decent early returns, then get an ego, get squashed once they have some semblance of scale later on, and lose a TON of money.
Wouldn't surprise me if legitimate losses here are 90%+.
"It's like God, Family, Country, except Sticker, Plastic, Coin."
'Smooth talking' Ponzi scheme mastermind is jailed 19 years for conning $225 million from Mormon churchgoers and friends' children to fake a life as a racehorse-owning philanthropist who donated to arts programs
Gaylen Dean Rust, 62, was sentenced to 19 years in prison Tuesday for money laundering and securities fraud after masterminding one of Utah's largest-ever Ponzi schemes
Prosecutors say Rust used his company, Rust Rare Coins, to defraud family members, friends and people he met through the Mormon Church
He was aided by his wife Denise, who said she was an 'unwitting pawn in Gaylen's world,' and at least one of his five adult children, authorities found
From 2002 to 2018, Rust convinced 568 people to invest in RRC's fraudulent program, telling them they would receive 25-to-25 percent profit every year
Rust spent the money on his other businesses, racehorses, music charities and a $2 million home.
He also withdrew $18 million for personal use and reportedly had his wife sign over at least $3 million to a mistress.
@BryceM said:
I was in their store years ago and bought some stuff there. Kind of leaves you with a skuzzy feeling. A kid I went to grade school with started a similar Ponzi scheme. My old neighbor lost everything, including his joy for life, and ended up killing himself a few years back. So-called "white collar" crime is plenty devastating. People who do this deserve far worse than what they get.
Sorry to hear about your neighbor.
As for the penalties, in China, the death penalty can be applied for white collar crime, including theft.
@Sonorandesertrat said:
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.
This may have happened. It was indicated that he took in $200M and paid out $150M so $50M needs to be accounted for. Some of this likely went to donations like the following:
The Salt Lake Tribune initially reported the story, explaining Rust had also given more than $2 million in contributions and tithing to The Church of Jesus Christ of Latter-day Saints.
And
“There are no winners here,” said Wayne Klein, a court-appointed conflicts receiver tasked with retrieving around half-a-million dollars fraudulently donated to Utah State University. “The investors aren’t going to get all their money back, Utah State is getting shafted and everybody’s a loser.”
In June, Klein filed a federal lawsuit against USU to retrieve nearly $545,000 after the university was the recipient of donations from a Ponzi scheme.
@Zoins said:
This may have happened. It was indicated that he took in $200M and paid out $150M so $50M needs to be accounted for. Some of this likely went to donations like the following:
that is a good point that i/we kinda skipped over. a large portion of that would have had to been paid out during the whole debacle to, well, keep the debacle going. so perhaps musical chairs applies here and probably other instances. the ones last to be paid were probably paid the least.
@Zoins said:
This may have happened. It was indicated that he took in $200M and paid out $150M so $50M needs to be accounted for. Some of this likely went to donations like the following:
that is a good point that i/we kinda skipped over. a large portion of that would have had to been paid out during the whole debacle to, well, keep the debacle going. so perhaps musical chairs applies here and probably other instances. the ones last to be paid were probably paid the least.
Yes, as I understand it from reading the SEC and CFTC complaints, much of the money was sent to investors as payouts on the Ponzi scheme. Also, the government is actively working with with the charitable donation recipients in an effort to recoup some or all of those funds.
I've never understood the logic behind a Ponzi scheme. in the best of all worlds, the scheme continues forever and you never get your comeuppance; however, that never happens. Even Bernie Madoff admitted that there was no "end game" strategy and he knew it would come crashing down on him some day.
Well, the judge ordered him to pay $153M in restitution to his victims, but whether that happens or not is unlikely. I bought from him 3 or so years ago and would have given him good creds at the time, but hopefully he will get his due punishment over and above the 19 years.
Jim
When a man who is honestly mistaken hears the truth, he will either quit being mistaken or cease to be honest....Abraham Lincoln
Patriotism is supporting your country all the time, and your government when it deserves it.....Mark Twain
@TPRC said:
I've never understood the logic behind a Ponzi scheme. in the best of all worlds, the scheme continues forever and you never get your comeuppance; however, that never happens. Even Bernie Madoff admitted that there was no "end game" strategy and he knew it would come crashing down on him some day.
I think it comes from not willing to admit publicly that business isn't doing well.
@TPRC said:
I've never understood the logic behind a Ponzi scheme. in the best of all worlds, the scheme continues forever and you never get your comeuppance; however, that never happens. Even Bernie Madoff admitted that there was no "end game" strategy and he knew it would come crashing down on him some day.
I don't think most people go into something like this with the idea they're running one. Rather, just by chance, they have a profitable run starting out and think they've hit on a successful business model. When things go south, they're hesitant to question their original assumptions about the business and try to plow ahead to get past the rocky parts. By the time reality sinks in, they're so deep into the mess it's nearly impossible to climb out.
How many people out there would be willing to stand up in front of those who've invested millions of their own dollars in their scheme and tell them "Sorry, guys... you f'd up- you trusted me. The money's gone." instead of trying even harder to keep all the plates spinning?
@tyler267 said:
I knew who Rust Rare coins was but never dealt with them.
I'm curious, what was their reputation like before the Ponzi Scheme news broke.
Others who were from the area would be in a better situation to answer, but my impression was that it was very good which likely added confidence to those who put their money into the "too good to be true" (always a red flag) tangential investment opportunity that ended up being a Ponzi scheme.
Also I believe the Rust implicated was a second generation who took charge after a long and well thought of business established by a parent.
i've spent the better part of today watching youtube vidz on ponzi/pyramid/hedge fund/bank scandals and the trend seems to be less of them, a good thing BUT they are growing significantly in size. (i really don't believe any one thing i read but will look for patterns, actual indictments, sentences etc) of course the latter being too late essentially.
since we seem to get nailed at least every 5 years or so, it does seem like we can protect ourselves by marking how long its been since the last big one and in the c19 environment, it seems the atmosphere is ripe. (there are several institutions right now or have just gotten through investigations/litigation and more or are in the midst)
we wonder how these things happen right before our feet, probably professional efforts to hide their efforts to only be outdone by the efforts to keep the results from getting out enough.
i won't quote any specific institution/individual names, the info is out there for you. it is pretty much the same, the bigger they are the harder they scam/skim. (using methods and tech that is just plain spooky how effective/dangerous it is)
this is of course, if much of anyone cares at all anymore.
many times, i've heard various sources quote, "and it seems no one cares" after initial claims are made against someone(s), only for the interest to grow AFTER the house comes down.
we have a choice what we put our money into, be careful out there.
To give some time scale, I did the normal Whitman folder thing as a kid, then came back to collecting with a fervor in 1994. At that time in SLC there were 4 shops focusing on coins plus two that did a bit more bullion type stuff. Rust Coin, on 3rd South, had already been turned over from founder Alvin Rust to his son. It was homey, educational, and collector service was high up on their priority list. They would cater to individual collector needs (they had a Ziplock bag hanging behind a wall they put superb raw toners in just for me) and prices were fair and predictable. As I got further into the dealer side of the hobby and made a few dealer friends, I would be asked on occasion if I thought it was a good place to stop by when they were in town looking for inventory. I always replied in the affirmative and dealers were happy.
On the collector side, things never changed, even after the scheme started (around 2005???). There was still no hint of a problem, all the way up to the final months (it was even easy to get physical silver/gold . . . no difficulty at all). Around that time one relation left to start his own business in Provo, and another 3rd generation started working full time in the shop (as best I remember).
I was in the shop when Larry Miller bought his 1892-S Morgan. I was also shifting through an NGC box of common Indian Cents in 63-64RB and saw an odd coin at the back. Just rattling around was an 1884-S Morgie in 64PL. Many fun memories.
They did so much good for so many in the hobby. Now, seeing the untold harm and grief they have caused, it is hard to accept the two things. When I think about it . . . it is an event like this that shatters your faith in people or developing trust.
@DRUNNER said:
I was in the shop when Larry Miller bought his 1892-S Morgan. I was also shifting through an NGC box of common Indian Cents in 63-64RB and saw an odd coin at the back. Just rattling around was an 1884-S Morgie in 64PL. Many fun memories.
They did so much good for so many in the hobby. Now, seeing the untold harm and grief they have caused, it is hard to accept the two things. When I think about it . . . it is an event like this that shatters your faith in people or developing trust.
Drunner
84-s 64pl, WOW
on the moral duality issue. it is for sure one of the hardest pills to swallow in this life; knowing that we can simultaneously do so much good and so much harm and then the conundrum of how to keep successful or at least neutral relationships when life turns to the latter.
I just watched the Salamander letter documentary. Rust was involved in that complex fraud/ double homicide. Ponzi victims are a strange dynamic. Sad. Peace Roy
Comments
I believe Tulving's downfall was different in that he was selling more physical metal for delivery than he could deliver.
In the bullion business never sell what you don't hold. Many an ebay seller has learned this lesson the hard way.
This sounds like something pretty easy to prove or disprove. The pool must have records of all purchases, sales, investments, payout etc.
Those can be verified as other parties are always involved. So if they are innocent, bet the proof out there. If authorities have proof they are not, that should also be put out.
guilt by association is not a good thing sometimes. your good here Utah
Yes, I agree with you. However, in all fairness, I would add that like you I have spent much of my life in Utah, Idaho, Wyoming, etc. Family, ranching, business, whatever. 80% of the people that I have ever met in that area are LDS. So of course that's who his marks were. Business behavior like his, I assure you is cross-denominational. No one group has the market cornered. Sad fact of life.
Alvin Rust founded Rust Rare Coins in 1966 and was one of the victims of Utah document forger Mark Hoffmann.
I believe that Alvin Rust is still alive and is in his 90's.
The Mysterious Egyptian Magic Coin
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He is, and very sharp. Gaylen is the odd son in not treating people like his dad. Gaylen's son Josh is a very nice, considerate man too - but greed and a belief you can keep this going forever is what makes a Ponzi scheme.
https://www.ksl.com/article/50049015/rare-coins-being-auctioned-to-help-pay-victims-of-utah-ponzi-scheme
Update to their collection. Will be interesting to see what will be up for auction.
I looked through the lots. The good stuff (if there is any) must have gone somewhere else. This is mostly bulk lots, silver rounds, proof ASEs and such.
Utahn behind $200M Ponzi scheme sentenced to 19 years in prison
By Jacob Scholl, KSL.com | Posted - March 8, 2022 at 4:20 p.m.
SALT LAKE CITY — The man behind one of Utah's largest ever Ponzi schemes, which netted over $200 million from victims, now knows his sentence.
Gaylen Dean Rust, 62, was ordered Tuesday to serve 19 years in federal prison after he pleaded guilty in December to felony counts of wire fraud, money laundering and securities fraud. Rust was also ordered to pay a staggering $153 million to the 568 victims in the case.
Rust was ordered to report to a federal prison by Wednesday, according to the Utah U.S. Attorney's Office.
A federal grand jury indicted Rust, his ex-wife Denise Rust, and their son Joshua Rust in May 2019 on numerous fraud and money laundering charges, after investigators alleged that the three orchestrated a silver trading Ponzi scheme that bilked hundreds of victims for over $200 million.
In a news release Tuesday, the Utah Department of Commerce called Rust's actions one of the biggest consumer harms the department has ever seen.
continued in link......
https://www.ksl.com/article/50363940/utahn-behind-200m-ponzi-scheme-sentenced-to-19-years-in-prison
Looks like they could pay off most of the victims by selling off the DANSCO albums in the background.
it's crackers to slip a rozzer the dropsy in snide
Must have made someone mad.
Jim
When a man who is honestly mistaken hears the truth, he will either quit being mistaken or cease to be honest....Abraham Lincoln
Patriotism is supporting your country all the time, and your government when it deserves it.....Mark Twain
confucius got that from jesus
A long time in coming.
Hopefully there is no wiggle room here.
Wayne
Kennedys are my quest...
I was in their store years ago and bought some stuff there. Kind of leaves you with a skuzzy feeling. A kid I went to grade school with started a similar Ponzi scheme. My old neighbor lost everything, including his joy for life, and ended up killing himself a few years back. So-called "white collar" crime is plenty devastating. People who do this deserve far worse than what they get.
.
ty for saying it. may seem a bit macabre but is nothing but accurate. lets us never forget the years and decades even, some people work to get a nice amount to have fun with and if put with the wrong person(s), can vanish permanently. of course a lot of all this is easier in retrospect.
this reinforces my rule #1. do not EVER put all yours eggs in one basket or for that matter a significant portion unless you are ok if you lose nearly all or all. (emotionally or financially)
i do try to keep white collar crime in mind when coming down hard on those committing day-to-day crimes. the day-to-day, in your face, stirs up the emotions because you can see it or at least the aftermath. white collar usually affects a larger base that is much harder to see for the average person, by comparison and gets discussed even less.
Wonder how much assets were seized to accomplish restitution.
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from one shapshot of the lots that were purported to have been in that may or nov? 2020 auction, there is a "chance" that some were not authentic. i tried to go through their site to verify WITHOUT saying anything first, in case they turned out not to be but their auction site https://www.salesandauction.com/ has at least a few broken links, including for past auctions. i'll dig a bit more but i have some other things to need to work on today.
@Namvest69 - if you dig through https://www.ksl.com/article/50049015/rare-coins-being-auctioned-to-help-pay-victims-of-utah-ponzi-scheme and watch the video there is some information for this. i didn't grab any numbers as my prime focus was looking for those potential counterfeits. i feel pretty confident that there were probably some significant losses selling off assets and then of course probably large amounts not recoverable from having been spent for personal use.
i'm not invested in all of this and don't want to give the impression i'm chasing anything here. just for educational and informative purposes. there have been at least several of these situations, reported even just on this forum so it is quite relevant as they add up easily to well over a billion.
ok. i do THINK this is it. https://www.bidspotter.com/en-us/auction-catalogues/bscerke/catalogue-id-erkele10051 - that sheet with gold coin matches what was in the video. what is gained to match all of this up. maybe nothing, maybe something. i'll let posterity decide. never know what one may see/learn. nothing negative for me, just facts.
seeing stuff like this doesn't give me a lot of confidence
Having looked through the auction listings, there wasn't enough there to cover more than a trivial amount of what was lost.
man your post had good timing. i was just about to post this link. i don't have my best focus so some of the stuff may have already been posted. it is taking my full forcus (whatever level it is right now) to track down what i'm looking for.
you may be interested to read about this. by his own admission, well, it is best for you to read it for yourselves.
https://www.ksl.com/article/50363940/utahn-behind-200m-ponzi-scheme-sentenced-to-19-years-in-prison
This is really sad!
I worked with a guy- who’s father-in-law, ran a Ponzi scheme that targeted seniors.
He was caught, convicted, and sentenced to a pathetically inadeque jail sentence- imo.
Prior to that, he had spread and laundered his money far and wide and was living a nauseatingly luxurious life. His victims were NEVER compensated for their losses!
He served a short prison sentence and returned to his lavish phony lifestyle. His was a slick operator, “fine citizen”, active in the community, etc……
Watch a few episodes of ‘American Greed’. It’s FULL of this kind of stuff!
“Ponzi schemes absolutely destroy trust in the investment industry. Without trust, individuals aren't willing to participate in future opportunities and that affects our entire economy.”
–Margaret Busse
That quote, from the article posted above, is the reason why I have very seldom, if ever, trusted anyone in the “investment” community, if they make promises of exemplary returns on investments!
And, even beyond that, why, I have managed my own financial affairs, to the best of my ability, for most of my life.
I believe that this type of crime, especially when targeting hard working peoples savings, and seniors, is among the lowest, most despicable and grievous of crimes.
Ok, I’ll get off my soap box now! ;-)
This thing just brought back all those memories of my co-worker and his family stuff, and how infuriating it all was.
Happy, humble, honored and proud recipient of the “You Suck” award 10/22/2014
.
thanks. i've been looking for another series to dig into and that sounds promising. a good training manual as well i bet, which is partially why i posted some of the stuff i did here.
as an example, when i go to shops/shows/antique malls/pawn shops and i see slabs like the ones above, i know to TREAD LIGHTLY. usually there are basic signs in life for things, recognizing, understanding and very importantly, acting appropriately can and usually will help us to avoid land mines and/or pitfalls.
i wasn't able to find more/better images, so i'll post it here for later research unless someone beats me to it. (imo, there are red flags in the image regarding fraud/counterfeits, at least enough to do more research)
just dumping these links below for future reference and so i don't have to go looking for them again in case i need them.
https://www.bidspotter.com/en-us/auction-catalogues/bscerke?auctions=archive&page=2
https://www.bidspotter.com/en-us/auction-catalogues/bscerke/catalogue-id-erkele10051/search-filter?page=1&pageSize=240
It is not clear to me where the 225M went. I see he diverted 18M to personal gain, but that is a lot of money to lose. Was it attributable to trading losses that he then covered up? Again, it is hard to hide 200M unless they were actual trading losses.
Tom
.
fwiw, all the links posted above state where some went here, some went there. the majority NOT in numismatic assets.
i didn't recall specific actual numbers being quoted often but there was a "person/group" or whatever handling the recouped funds for distribution to the investors. if someone started digging, for whatever reason, including court documents, i'm sure someone could find out. other than curiosity, not sure what good it would do. the losses were substantial to the investors.
Oftentimes people come into these schemes with the best of intentions, get decent early returns, then get an ego, get squashed once they have some semblance of scale later on, and lose a TON of money.
Wouldn't surprise me if legitimate losses here are 90%+.
"It's like God, Family, Country, except Sticker, Plastic, Coin."
Daily Mail UK......
'Smooth talking' Ponzi scheme mastermind is jailed 19 years for conning $225 million from Mormon churchgoers and friends' children to fake a life as a racehorse-owning philanthropist who donated to arts programs
Gaylen Dean Rust, 62, was sentenced to 19 years in prison Tuesday for money laundering and securities fraud after masterminding one of Utah's largest-ever Ponzi schemes
Prosecutors say Rust used his company, Rust Rare Coins, to defraud family members, friends and people he met through the Mormon Church
He was aided by his wife Denise, who said she was an 'unwitting pawn in Gaylen's world,' and at least one of his five adult children, authorities found
From 2002 to 2018, Rust convinced 568 people to invest in RRC's fraudulent program, telling them they would receive 25-to-25 percent profit every year
Rust spent the money on his other businesses, racehorses, music charities and a $2 million home.
He also withdrew $18 million for personal use and reportedly had his wife sign over at least $3 million to a mistress.
https://www.dailymail.co.uk/news/article-10594389/Utah-fraudster-62-conned-568-victims-225-m-jailed.html
Sorry to hear about your neighbor.
As for the penalties, in China, the death penalty can be applied for white collar crime, including theft.
This may have happened. It was indicated that he took in $200M and paid out $150M so $50M needs to be accounted for. Some of this likely went to donations like the following:
https://www.hjnews.com/news/local/lawsuit-filed-against-usu-to-retrieve-ponzi-scheme-donations/article_a82191f5-c4f6-5638-9ea1-4a76a8ce185a.amp.html
And
that is a good point that i/we kinda skipped over. a large portion of that would have had to been paid out during the whole debacle to, well, keep the debacle going. so perhaps musical chairs applies here and probably other instances. the ones last to be paid were probably paid the least.
Yes, as I understand it from reading the SEC and CFTC complaints, much of the money was sent to investors as payouts on the Ponzi scheme. Also, the government is actively working with with the charitable donation recipients in an effort to recoup some or all of those funds.
I've never understood the logic behind a Ponzi scheme. in the best of all worlds, the scheme continues forever and you never get your comeuppance; however, that never happens. Even Bernie Madoff admitted that there was no "end game" strategy and he knew it would come crashing down on him some day.
Tom
Well, the judge ordered him to pay $153M in restitution to his victims, but whether that happens or not is unlikely. I bought from him 3 or so years ago and would have given him good creds at the time, but hopefully he will get his due punishment over and above the 19 years.
Jim
When a man who is honestly mistaken hears the truth, he will either quit being mistaken or cease to be honest....Abraham Lincoln
Patriotism is supporting your country all the time, and your government when it deserves it.....Mark Twain
I think it comes from not willing to admit publicly that business isn't doing well.
I don't think most people go into something like this with the idea they're running one. Rather, just by chance, they have a profitable run starting out and think they've hit on a successful business model. When things go south, they're hesitant to question their original assumptions about the business and try to plow ahead to get past the rocky parts. By the time reality sinks in, they're so deep into the mess it's nearly impossible to climb out.
How many people out there would be willing to stand up in front of those who've invested millions of their own dollars in their scheme and tell them "Sorry, guys... you f'd up- you trusted me. The money's gone." instead of trying even harder to keep all the plates spinning?
I knew who Rust Rare coins was but never dealt with them.
I'm curious, what was their reputation like before the Ponzi Scheme news broke.
Others who were from the area would be in a better situation to answer, but my impression was that it was very good which likely added confidence to those who put their money into the "too good to be true" (always a red flag) tangential investment opportunity that ended up being a Ponzi scheme.
Also I believe the Rust implicated was a second generation who took charge after a long and well thought of business established by a parent.
i've spent the better part of today watching youtube vidz on ponzi/pyramid/hedge fund/bank scandals and the trend seems to be less of them, a good thing BUT they are growing significantly in size. (i really don't believe any one thing i read but will look for patterns, actual indictments, sentences etc) of course the latter being too late essentially.
since we seem to get nailed at least every 5 years or so, it does seem like we can protect ourselves by marking how long its been since the last big one and in the c19 environment, it seems the atmosphere is ripe. (there are several institutions right now or have just gotten through investigations/litigation and more or are in the midst)
we wonder how these things happen right before our feet, probably professional efforts to hide their efforts to only be outdone by the efforts to keep the results from getting out enough.
i won't quote any specific institution/individual names, the info is out there for you. it is pretty much the same, the bigger they are the harder they scam/skim. (using methods and tech that is just plain spooky how effective/dangerous it is)
this is of course, if much of anyone cares at all anymore.
many times, i've heard various sources quote, "and it seems no one cares" after initial claims are made against someone(s), only for the interest to grow AFTER the house comes down.
we have a choice what we put our money into, be careful out there.
Wow . . . so many memories.
To give some time scale, I did the normal Whitman folder thing as a kid, then came back to collecting with a fervor in 1994. At that time in SLC there were 4 shops focusing on coins plus two that did a bit more bullion type stuff. Rust Coin, on 3rd South, had already been turned over from founder Alvin Rust to his son. It was homey, educational, and collector service was high up on their priority list. They would cater to individual collector needs (they had a Ziplock bag hanging behind a wall they put superb raw toners in just for me) and prices were fair and predictable. As I got further into the dealer side of the hobby and made a few dealer friends, I would be asked on occasion if I thought it was a good place to stop by when they were in town looking for inventory. I always replied in the affirmative and dealers were happy.
On the collector side, things never changed, even after the scheme started (around 2005???). There was still no hint of a problem, all the way up to the final months (it was even easy to get physical silver/gold . . . no difficulty at all). Around that time one relation left to start his own business in Provo, and another 3rd generation started working full time in the shop (as best I remember).
I was in the shop when Larry Miller bought his 1892-S Morgan. I was also shifting through an NGC box of common Indian Cents in 63-64RB and saw an odd coin at the back. Just rattling around was an 1884-S Morgie in 64PL. Many fun memories.
They did so much good for so many in the hobby. Now, seeing the untold harm and grief they have caused, it is hard to accept the two things. When I think about it . . . it is an event like this that shatters your faith in people or developing trust.
Drunner
84-s 64pl, WOW
on the moral duality issue. it is for sure one of the hardest pills to swallow in this life; knowing that we can simultaneously do so much good and so much harm and then the conundrum of how to keep successful or at least neutral relationships when life turns to the latter.
Coming from my experience with a couple of guys from the mortgage fraud days...
These types have no conscious and sniff out greed. Slick salesmen.
Crazy the lemmings they find.
I always ask myself... "do I give up control?"
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I just watched the Salamander letter documentary. Rust was involved in that complex fraud/ double homicide. Ponzi victims are a strange dynamic. Sad. Peace Roy
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