Precious metals dealer Merit Gold and Silver is being sued by the City Attorney's Office for allegedly using misleading sales tactics. (Photo courtesy meritgold.com)

CITYWIDE — A precious metals company that was sued by the City last year appears to have closed for business and sold its assets.
Merit Gold and Silver, the retail division of Seacoast Coin Inc., has sold its assets to the Credit Management Association (CMA), a non-profit association that helps credit, collection, and financial decision-makers get information and assists insolvent companies with workouts or liquidation.
The deal, known as an Assignment for the benefit of Creditors, is similar to a bankruptcy but operates with less judicial oversight. According to Adam Radinsky, Head of the Consumer Protection Unit for the Santa Monica City Attorney’s Office, CMA will facilitate the sale of Merit’s assets and take a percentage of the profits in payment.
Radinsky said the City filed a temporary restraining order that has frozen the assets of the company and its founders but that CMA is authorized to begin selling some assets to fulfill the existing orders of customers.
The City of Santa Monica sued Merit in 2013 for operating a “bait and switch scam” that encouraged customers to buy expensive collector coins instead of bullion. The company was alleged to have lied to consumers regarding the quality of the investment, privacy of the sale, tax status of the investment and security of the sale.
In the suit, the City specifically names Peter M. Epstein and Michael J Getlin as co-owners of the business. The two are alleged to have made millions from the illegal sales but denied any wrong doing when interviewed by The Daily Press in 2013.
Radinsky said the legal maneuver effectively puts Merit out of business but does not end the City’s efforts to recoup payment for consumers. He said his office believes the business operated illegally. The City will continue with the court case but it may take months, if not years, to fully resolve the situation.
“While the business appears to be in the process of winding up, it still has assets and the co-owners have assets,” said Radinsky.
matt@www.smdp.com

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