An empty vault: Silver dealer ordered to pay $146 million in case of 500,000 missing coins
UpGrayedd
Posts: 597 ✭✭✭✭✭
I never understood why anyone would trust someone else to hold their silver for them.
"When investigators went into the vault where Robert Higgins claimed he kept half a million of his customers’ silver coins, all they say they found were empty boxes filled with IOUs."
Philippians 4:4-7
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Wow, the set of cojones on this guy!
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Pure unadulterated fraud and theft. Cheers, RickO
Good luck trying to collect on that judgement.
I hope Bubba likes him 😈
I have never considered 'coin leasing' .... what could you lease a top pop $10K coin for and could leasee put it in their registry set?
The fancy cars and the beach houses didn’t give it away?
Astonishing that this went on for so long. Must have fooled both auditors and lenders during inventory and collateral checks too!
Who found it, Geraldo?
LOL, I wonder how many people get that reference.
Philippians 4:4-7
I have to wonder if any remaining coins were suddenly transported somewhere else right before investigators showed up? I mean, if you're already going to jail, you might as well compound the felony as badly as possible.
It makes me wonder how many other private bullion depositories are doing the exact same thing but have yet to be caught…….
I used to buy tons of commems from this guy's firm 10 years ago. Liked dealing with his son; didn't get a good vibe from the dad.
It is just not Silver ... think about Bernie Madoff. These people are cut from the same mold.
OMG ... My Mother was Right about Everything!
I wake up with a Good Attitude Every Day. Then … Idiots Happen!
Robert Higgins Linkedin page:
https://www.linkedin.com/in/robert-higgins-3917583a
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It doesn't excuse the fraud, that's reprehensible, but I'm curious what sort of returns these people were promised?
The press releases mentioned that the "customers" were told their investments/metals were guaranteed and insured. Were they promised 8-10% guaranteed returns or higher? One would hope that if that's the case that people would have learned better by now, especially considering that most of the clients probably had some level of affluence because it would take an awful lot of people to make up $146mm, $5,000 at a time.
Ugh. It’s the stuff that comes with a 4AM cold sweat wakeup. Mines all in the bank vault.
I'm sure his advertising and pr were slick and top notch to bamboozle so many people. And I heard last week that the Feds moved the gold at Fort Knox to West Point, but how would we know?
https://financefeeds.com/robert-higgins-argent-and-fsd-ordered-to-pay-145-7-million-for-deeply-troubling-scam/
If you can't hold it in your hand.... (or have physical possession) you don't own it
I never understood owning something that someone else held on to.
Doesn't sound like ownership to me.
Dead Cat Waltz Exonumia
"Coin collecting for outcasts..."
Not condoning fraud, but I agree. Why would anyone let someone else "hold" their precious metals?
Then you must not understand bank safe deposit boxes.
It's not uncommon, which is how the fraud gets legs. The twist is that the banks are regulated, and these guys are not. And the banks give you a key to a discrete box, and these guys don't.
But the concept is the same. You don't have physical control over the box or its contents, and things happen, like when things were destroyed in the 9/11 attacks, or when bank vaults are breached.
I see very, very little similarity between using a safe deposit box at a local, reputable bank to store one's valuables, and only having paper-ownership over one's property somewhere in the ether. One has immediate access to one's safe deposit box (assuming you live near it); one has little or no access to the one described in OP. And safe deposit boxes at real banks are breached very, very rarely.
But I can go and get my stuff out anytime? Put it back and take it out as I please. I don't understand your point.
Dead Cat Waltz Exonumia
"Coin collecting for outcasts..."
Again, buying something and never seeing, having someone tell you they have secured it in their vault is completely different from safeguarding your possessions in a safe deposit box.
Please explain your reasoning @NJCoin
Dead Cat Waltz Exonumia
"Coin collecting for outcasts..."
Wow. No one has ever said that in this forum before...
The whole purpose of owning precious metals at least for me is the emergency liquidity factor which, also excludes the bank.
My point was simply that you own something but are trusting someone else with possession. Theoretically, you can get your stuff from anywhere at any time, assuming the people you are trusting are not running a scam, and your stuff actually exists.
Years ago my wife and I almost got involved with a financial advisor to figure a way to pay off our kids debt. I’m so glad I wasn’t onboard with his plan. We would have been so screwed. “ If it’s to good to be true, it isn’t.” A risk you take to try to make a quick buck. As long as they make a penny a week restitution they meet the courts’s order.
I am always trying to learn..
People should look into the risks of theft of the SDB vaults. Look into the risk of dealing with Brinks. Look into the risk of having metals stored at the Texas bullion depository. Some ways to store metal appear safer than other? Are they?
You could obtain some paper gold with ETF's (GLD/Sprott). Is the gold truly there? Not in your possession although Sprott says they will ship the bullion if you request it? I guess you have to rely on the Auditors? Think salad oil?
If you are fortunate enough to accumulate a fairly large amount of metals you face a dilemma.
a)Bury it
b)Put it in a home safe
c)SDB's
d) private vaults
Everyone has their own comfort level. How much is too much to keep at home ? Is that subjective?
So.. in the end you make a decision when/if you are uncomfortable about the size of your holdings. I would advise someone to truly spread their risks if their holdings are a significant part of their net worth.
I always believe that if a person becomes too concerned about their holdings and it keeps them up at night, it's time to sell. At least a portion. Fewer storage problems.
Why did people give money to Madoff? Why Higgins? Reputation? My account keeps growing so I'll tell my friends? I can invest, make a return and the storage appears safe.
Do not know all the details but if these were IRA funds being invested then part of the blame could be laid on the IRA requirements that gold and silver are not to be in one's own possession to qualify. Yes, I know there are some asserted schemes to allow one through a trust to have physical possession but some of those have been found wanting when the Feds stepped in at the end of the day.
This is nothing new. Mark Yaffe of the National Gold Exchange did the same thing about 10 years ago. When he got caught, he got 20 months prison time for defrauding his customers out of millions of dollars. The FDIC doesn't insure the accounts.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Not that it matters, but these situations always make me wonder if perps started out to commit fraud or if they were reckless and got on over their head. Same outcome so it doesn't matter, behaviour was inexcusable.
Greed drives a lot of motive- lots of Madoff clients protected him and/or looked the other way because they didn’t want the returns to stop.
My wife and I met another young couple at church- the guy was Canadian and they lived in a nice condo and drove a new Corvette and had nice artwork on the walls and he ran an investment firm based in the Caymans. He invited us to invest, which we declined. A year later turns out it was pure Madoff on a small scale, and he was arrested at the Cayman airport and sentenced to 4 years in a Cayman prison. Haven’t seen them since!
No storage method is foolproof. That said, Safety Deposit Boxes are the safest method. YOU have the goods and YOU control the access to them.
Back in the mid 80's I was working at a shop in Chicago when a family came in, Grandma type, big, strong son straining under the weight of a big wooden crate, his wife and two grandkids. The crate held mason jars full of silver dollars and one mason jar full of $20 gold pieces. Some of the dollars were water damaged.
During the economic upheavals of the late 70's, early 80's the late Grandpa had converted much of the family's assets to gold and silver and buried it in the back yard. No inventory, no map but thank god he did tell his wife there was stuff buried in the back yard. He had recently dropped dead suddenly so Grandma had the son dig up the entire back yard two feet deep from fenceline to fenceline. As he found jars he made a map and tried to find a pattern, but could not. Tey had no idea if they had found everything, and Grandma was heartsick with worry.
I started sorting the dollars and found exactly 1,000 each of two different common dates, all BU though some of the jars had leaked and there was rust on the coins in those jars. There was over 100 common circ. $20's in the gold jar. I explained to Grandma how dollars had come in bags of 1,000, and how Grandpa had obviously bought two original BU bags and divided them up, so they had probably found all of the dollars. I also said that there was no way of telling if there was another gold jar, and gave the son some advice on metal detectors. We bought the deal and they left and never came back, so I assume that they never found anything else.
Yes greed. The investment business always had some shady characters.
The mining biz .. more shady characters.
Coin biz.. Everyone is honest, of course.
I still remember 40+ years ago buying my first mining stock. Someone related the old joke to me....
"A gold Mine is a hole in the ground with a liar at the top".
Never forgot that saying.
I think this con was a lot simpler than people are thinking. You have to pay like 1% to store your bullion is vaults. If this guy offered to store your bullion AND pay a return each year it's a great deal to someone considering spending 1% each year. Instead of paying that 1% you make a return! What a deal. Now obviously that return is just there to keep you happy while they steal the principle.
The substantial truth doctrine is an important defense in defamation law that allows individuals to avoid liability if the gist of their statement was true.
3rd party risk is real.
It has always been a boneheaded idea, and it will remain the number one boneheaded idea for people that want to hold or “own” precious metals.
Regardless of the self-serving promotion, hype and promise, even here on the forum.
You reckon that they could have concealed assets? Makes sense.
Leasing precious metals is not a new or unusual practice. I even did it once myself back in the 80's, with no regrets. The trick is to pick your counterparty wisely.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
IN a round about way, I lease gold by selling gold futures.
I never part with the physical and I never deliver the gold. I roll the contracts. Currently, the return is approximately the 1 year t-bill rate or around 5%. Each sale reduces my long exposure, so I'm selling the futures when I wish to hold less gold.
Perhaps you can answer a question for me. Back in 1979-80 the Hunt Brothers exploded the silver market by buying up many contracts, and then demanding delivery of physical products. Do modern contracts specifically exclude this option?
Physical delivery is still an intrinsic part of any contract but it almost never comes up with traders/speculators. However, every now and again it can play havoc with the markets like with the Hunt Brothers or, more recently in April 2020, when oil dropped to -$30/barrel (negative $30).
As I understand it, the problem wasn’t that they took delivery, but that they bought so much - physical and contracts - that the market rose dramatically. (They were bona fide silver bulls, so their buying turned their bullish stance into a self-fulfilling prophecy.) The market only crashed when COMEX changed its rules, forcing the Hunts to unwind their position. As I see it, they were the victims, not the villains.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I wouldn't exactly call them victims. They were heavily over-leveraged and Comex changed its margin requirements. If they were victims then so is every overleveraged person/entity. Like the banks and market speculators during the Great Depression or the hedge fund Long Term Capital Management or all of the banks during the Housing Crisis or....
I don't know. Obviously you can buy gold contracts and ask for delivery if you choose. I'm not sure how many dollars it would take to corner the gold market. Exchanges raise margin requirements so speculators need to have enough liquidity to maintain their positions.
I do know that selling contracts aren't riskless. IN 2020 I was short a some contracts with a $30 premium for 3 months. I bought a couple of contacts back for a $50 premium (lost $20 x 100 oz per contract). I didn't know how many mines could/would close affecting the supply from miners. Taking the loss gave me peace of mind. In 10 years of selling futures I never saw this before so I learned something. I always prefer to tale losses fairly quickly as I hate large losses.
Exchanges always change the rules when too many lose and a few gain. Saw it in the Nickel market last year.
Absolutely not. The option to take physical delivery is a key attribute of these contracts, and is what distinguishes them from other "paper precious metals." I'm not sure, but I think, among other sins, the Hunts screwed around with position limits by trading through various entities.
As others pointed out, when it was clear that they were manipulating and attempting to corner the market, the exchange and regulators did what exchanges and regulators do, and forced them out. You, or anyone else, can absolutely, today, buy up to the published contract limits, and take delivery of every single ounce, assuming you have the funds to pay for them.
This all brings to mind the invention of paper money by the Rothchild family who created fractional reserve banking over 300 years ago. The Rothchild's were goldsmiths who issued gold certificates to their clients who entrusted their gold to them. They then discovered that their certificates were valid in the market and could issue additional certificates as loans against the gold principal. Turns out they could issue loans in excess of almost ten times of the value of the gold that they held.
Perhaps Higgins was following this old script.......or was he just a common thief?