CLOVERFIELD BLVD — Officials with Santa Monica-based Goldline International, Inc., one of the nation’s largest dealers of precious metals, said Wednesday they will vigorously contest a criminal complaint filed by the City Attorney’s Office.
The complaint, filed Tuesday in Los Angeles Superior Court, charged Goldline with running a “bait-and-switch” operation to sell overpriced gold coins. The misdemeanor charges, 19 in all, range from false advertising and conspiracy to elder abuse involving a transaction that took place over the last three years.
Several key executives and salespeople were named in the complaint. They are expected to be arraigned Jan. 4, 2012. The charges carry a maximum penalty each of one year in jail and fines of between $1,000 and $10,000.
Goldline’s Executive Vice President Brian Crumbaker said in a prepared statement that the criminal complaint is without merit and that it contained “numerous errors.” He noted that a core allegation of the complaint cites the company for “offering Bullion for sale on Goldline’s website with no intention of selling it.”
“The so-called bait and switch allegation is preposterous because bullion accounts for more than 40 percent of the ounces of gold sold by the company during the past year,” Crumbaker said.
Goldline is one of the leading companies in the U.S. offering a full range of precious metals products. The company has been in operation for more than 50 years and has been located for more than 20 years in Santa Monica, where the company employs about 400 people.
“We believe Goldline has industry best-practices in customer disclosures enabling the most informed decisions,” Crumbaker said.
Santa Monica’s City Attorney’s Office and the Los Angeles County District Attorney’s Office opened a joint investigation into Goldline and another Santa Monica company, Superior Gold Group, in July 2010 after receiving complaints from more than 100 customers who said that they were lied to and misled in entering into their purchases of gold coins. Others said they received something different from what they ordered.
During their investigation, attorneys said they uncovered evidence to suggest salespeople for Goldline were trained to “get the money in” from customers on the promise of delivering gold bullion, with the intent of to later switch the sale to far more overpriced coins.
The criminal complaint also claims salespeople received approximately 2,000 percent more commission for sales of other overpriced coins than for sales of bullion, and that they were told to withhold certain pricing information from customers.
Goldline also allegedly engaged in false advertising by referring to European coins as “rare” while also stating that they could be “liquidated privately.” City attorneys said Goldline also offered gold bullion for sale in commercials and on its website but had no intention of doing so.
The Santa Monica City Attorney’s Office is continuing to investigate the case. Consumers who believe they have been defrauded by Goldline should contact the City Attorney’s Consumer Protection Unit at (310) 458-8336 or file a complaint online at gold.smconsumer.org.
kevinh@www.smdp.com
