Surprise, Surprise! Goldline Hit With Injunction, Has To Repay Defrauded Customers $4.5 Million

Conservative talker-endorsed precious metal retailer Goldline International agreed to a court order this week to repay defrauded customers $4.5 million and overhaul its business practices. The injunction, handed down by the Los Angeles County Superior Court, was obtained by the City Attorney of Santa Monica, California — where the company is based — who had filed 19 criminal counts of fraud and theft against the company last year. Those charges have now been dismissed.

Goldline’s entire business model was essentially a scam, the city attorney found. It was a bait-and-switch: Consumers wanted to buy gold bullion, but salespeople preyed on their fears — including falsely claiming that the government could seize bullion — and misled them into buying vastly overpriced gold coins instead. Consumers typically paid more than 55 percent above the actual value of the coins, which are much harder to sell down the road, instantly wiping out a large portion of their savings.

At the time, Goldline called the charges “preposterous” and vowed to fight them. But in addition to the $4.5 million, the court order requires Goldline to put $800,000 into a fund for future claims, and submit to a court-appointed monitor who will have full access to company’s operations, at Goldline’s expense. In addition, it will have to disclose its actual markups and stop misleading customers.

The company is best known for its ties to conservative talk radio hosts like Glenn Beck, Sean Hannity, and Mark Levin, who were central to the company’s marketing model. Two former GOP presidential candidates — Mike Huckabee and Fred Thompson — have even endorsed the gold retailer.



Link: http://thinkprogress.org/justice/2012/02/24/431519/goldline-injunction/