This week, the Blotter is reprising seven different Brian Ross Unit investigations that made a difference in 2011. Today: Criminal charges against a precious metals dealer touted by Glenn Beck and other conservative icons.
One of the nation's largest dealers of gold and precious metals, Goldline had amassed hundreds of millions in sales in part by relying on endorsements from Glenn Beck and other conservative icons, and had boasted of an A-plus rating from the Better Business Bureau in a barrage of ads that aired during television and radio talk shows.
But an ABC News investigation found numerous unsatisfied customers who said the company had persuaded them to buy expensive collectable coins instead of gold bullion, a switch that enabled Goldline to add a sales mark-up but made the investment less lucrative. In reports that first aired on Good Morning America, 63-year old Joe Kismartin of suburban Detroit described how he lost almost half of the $5,000 he spent when he sold the coins [later that year or whenever], because, he says, the Goldline salesman pressured him to buy (deletion) gold coins, not the gold bullion he had seen in the commercials. "You know, I'm living month to month, that's a big loss."
Goldline defended its practices, telling ABC News customer complaints were infrequent and it responded immediately to address them. The proof of the company's commitment to customer satisfaction, they said, was Goldline's top rating from the Better Business Bureau.
Impact: Following the report, Congress convened hearings, and a local official in California put the company on notice that his office had launched an investigation into its sales practices. More than a year after the initial ABC News report, the Santa Monica City Attorney charged Goldine with theft and fraud in a 19-count criminal complaint filed in California Superior Court in November. The complaint alleged that Goldline "runs a bait and switch operation in which customers, seeking to invest in gold bullion, are switched to highly overpriced coins by using false and misleading claims." Do we have a company response to the charges?
The Better Business Bureau downgraded Goldline's rating from A-plus to F, then removed the company's rating from the BBB site altogether, instead alerting visitors to the site that charges had been filed and the matter is pending.
Executives at Goldline told ABC News they would vigorously fight the criminal charges, saying the allegations of fraudulent tactics were "without merit" and "preposterous."