It probably goes without saying that when you plan on buying physical bullion, you need to choose the dealer you are going to purchase from and store with well. As with making any investment, that can be hard enough to do, but in a recent (and yet another!) case out of the U.S., apparently even choosing a reputable, recommended dealer isn’t enough. Once again, the victims are U.S. retirement account holders that were simply trying to protect their wealth.

Any of our clients, partners, and other contacts that get BFI Bullion’s quarterly Digger know that we’ve spent a lot of time this year warning gold investors, and particularly U.S. retirement account holders investing in gold, about these fraudulent characters that have been taking advantage of unsuspecting investors. It is not the first, and probably won’t be the last unfortunately.

The good news is that there are many dependable and trustworthy gold dealers out there, but as usual, it is a minority that gives a bad name to all. What follows are words of warning for all investors...

New Scandal

A long-time client of ours shared the recent “scandal” with us, but in digging more into the subject, I want to explain what happened by sharing this excerpt from a September 4th, 2024, article in the Pasadena Star-News (California, USA), authored by Jeff McDonald of the San Diego Union-Tribune:

With a fickle stock market and broader economic uncertainty around the globe, Howard and Heather Short were looking for a safe harbor for their savings and financial stability.

The San Diego couple settled on gold.

After months of hearing advertisements promoting the Oxford Gold Group on a local talk radio station, the Shorts began transferring chunks of their retirement portfolio to the Beverly Hills company.

“I thought, it’s silver and gold. It’s tangible. It’s not going to lose value,” Heather Short said in a telephone interview. “We did one lump sum from each of our retirement accounts.”

Oxford Gold told clients their assets would be deposited with Equity Trust Co., an Ohio firm specializing in so-called self-directed investment accounts focused on precious metals, cryptocurrency and other alternative assets.

But earlier this year, the Short’s and hundreds of other investors received a letter from Equity Trust indicating that the money they directed to Oxford Gold had not been properly recorded.

“What this means is that our records reflect that i) the metals you purchased from Oxford Gold were not yet fulfilled and delivered to your designated depository, and/or ii) that your Equity Trust account(s) has not received the cash proceeds from the precious metals that you sold to Oxford Gold,” the unsolicited correspondence said.

“Thank you for being a valued client,” the letter concluded.

Thanks for nothing!

According to further news reports out of the Los Angeles area, the referenced couple in Mr. McDonald’s article are amongst a slew of many others that have lost millions in retirement savings to the California-based Oxford Gold, the unscrupulous dealer at the heart now of a class-action suit with plaintiffs from 27 different states.

Oxford Gold claimed to be investing the retirement savings of their clients in physical gold coins, coins of which were to be sent to a depository in Utah, using the third-party, Equity Trust. Equity Trust is a specialist in self-directed retirement accounts focused on precious metals, cryptos, and other alternatives. However, Equity Trust, in the news-article-referenced letter, cut ties with Oxford and told clients to contact Oxford directly regarding their gold investments.

Since the summer, Oxford Gold has stopped responding to client questions, has shuttered its website, and their telephone number no longer works. The Utah depository where the metals should have been stored unfortunately has no sign of any metals from these investors.

To no surprise, Equity Trust is also listed in the federal lawsuit, as clients rightfully felt they were not warned about Oxford’s failure to deliver what they promised. The lawsuit claims that “Equity Trust failed to make sure that investments were being properly credited to their retirement accounts,” adding “investor funds were going unaccounted for by Equity Trust Co. in violation of (their) fiduciary duty to their investors.”

Equity Trust, according to reported attempts by media to get a statement, says it does not comment in cases of a pending litigation.

Not a rinky-dink operation

What I found most troubling about Oxford Gold is that it was not some small, or what I like to call “rinky-dink,” operation. In the research I did, the Oxford Gold Group found its way on a number of “Top 10” lists for “Best Gold IRA Companies in the U.S. for 2024”!

One victim who was interviewed by KABC Television in Los Angeles, said that before investing, he had found good reviews for Oxford online, and that he had received a sophisticated, persuasive investment guide. He was also enticed by a YouTube channel explaining the ease of which IRA funds could be invested in precious metals.

Or, as another victim bluntly stated, “they’re all the same story, high-profile people contacting you telling you it’s a good thing. It’s a good decision. We’re here to help. And I’m here minus 50 grand”.

The reality, though, is that shady precious metals dealers have managed to create good reputations online using fake or paid reviews. It is also worth noting that bad reviews can also be fake, planted by a company’s unethical competitors.

As we had described in our 2024 Q1 Quarterly Digger earlier in the year, in discussing the actions of these gold IRA scams: “They specifically and purposefully do this through ad placements in media outlets their targets follow and through paid endorsements from news personalities or political figures they trust. We’ve read about these types of cases going on back to 2010, when Goldline, a company promoted by talk radio and TV host Glenn Beck and Fox News at the time, settled in court for defrauding customers on their gold IRAs: they never admitted to wrongdoing, but still agreed to refund $4.5M to former customers.”

Unfortunately, Oxford is not new, nor will it likely be the last example of gold fraud. As usual in a case like this in the U.S., victims might wait months, or even years, before things can be sorted out.

Our own approach

I completely understand what you may be thinking: if we can’t trust a presumably reputable company in the US, who can we really trust? As I said before, the good news is that in the precious metals industry in general, the minority of potentially bad apples doesn’t equate to the majority that are doing honest, hard work for their clients.

What can you do? I believe the first order of business in looking for a precious metals dealer, regardless of if you are investing IRA funds or not, is to simply do your homework. While it’s clear that Oxford Gold had great – or supposedly great - reviews to start the year, it is also clear from the victims that were interviewed that high-pressure tactics were ultimately used to get them to invest.

What you need to watch out for are unsolicited offers, pressure tactics, dealers offering significantly lower prices than market value or deals that are “too good to pass up.” Be sure to know and understand what you want out of your gold purchase. I often time recommend staying with the “standard” bullion formats vs. going into numismatics where the day-to-day investor might be taken advantage of on price. And ultimately, transparency is key: can the provider offer a clear proposal of how a purchase would look, what you would pay in fees, and what you would get?

At BFI Bullion, in our 15-plus years of existence, we’ve always taken a lot of pride in being transparent with all of our clients. It’s a reflection of the BFI Capital Group’s mission statement and the value system we have in place. This is why it frustrates us to no end when we hear about these cases. We do, however, feel that actions speak much louder than words, which is why we let our approach and processes speak for us.

For instance, while we do often talk about and write about our concerns over the current economic and monetary system, we will never scare our clients into buying gold by making absurd claims about an imminent global collapse or government confiscation. We also never pressure our clients into making a decision they are not ready for - there is no “ticking clock.” We are completely ready to inform a prospective client that perhaps our solution isn’t the right one for them if it doesn’t match what they are looking for.

When it comes to BFI Bullion’s services, we always recommend we project for a client what their purchase will look like, providing a detailed breakdown of the fees for that purchase and ultimate storage. Our clients can also visit the storage facilities where we hold their metals, giving them the ability to check on or even pick up their metals if they would like to. And our clients’ holdings are also fully-insured and audited physically (as are our financial books) at least once per year by a Big-4 accounting firm.

One last comment about U.S. Gold IRAs: while BFI Bullion cannot help a US client with the structuring and setup of their IRA, we have developed a network of solid partners that we can refer our clients to in order to give them the chance of converting their existing IRAs into self-directed IRAs. With this completely compliant self-directed IRA, it is possible to add BFI Bullion purchased and stored metals to their retirement account.
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