An executive with Goldline, one of two gold companies now under investigation for their sales practices, told ABC News Tuesday morning that his company does not intentionally steer customers toward overpriced gold coins – but he also touted the coins as a safe harbor because "no one knows" whether the U.S. government will seize gold from private citizens.
In an interview on Good Morning America, Goldline executive vice president Scott Carter responded to allegations that his company has made a fortune by persuading gold investors that collectable coins are worth buying, despite a hefty mark-up. He said the firm, which weaves its sales pitches into broadcasts by popular conservative political personalities – including two former presidential candidates and Fox News host Glenn Beck – is simply offering its customers sound advice.
"You should hold this three to five years," said Carter, "preferably 10." He said that some of the price of the gold coins his company sells can be traced to "upfront costs." He noted that his firm had been in business more than 50 years, and earned half a billion dollars, and enjoyed an A plus rating from the Better Business Bureau.
Carter also restated a central point of Goldline's sales pitch – that the federal government took gold bullion from private citizens during the Depression, and could always do so again. That's why the company encourages customers to buy collectable coins instead. "It's hard to determine what the government will do," said Carter. "I don't know whether it's a possibility. But [it] has been done before and people are concerned. Many people are paralleling 1933 to today."
In 1933, the federal government paid market value for private stocks of gold.
Carter's interview comes after the announcment Monday that authorities in California had opened an investigation into Santa Monica-based Goldline and a second gold company based in the same city, Superior Gold Group.
"There are two main types of complaints we're seeing," said Adam Radinsky of the Santa Monica City Attorney's office, which has launched what it described as a joint investigation with the Los Angeles County District Attorney's office.
"One is that customers say that they were lied to and misled in entering into their purchases of gold coins," he said. "And the other group is saying that they received something different from what they had ordered."
In an interview broadcast on Good Morning America, Radinsky said the probe is in its early stages and involves more than 100 consumer complaints about Goldline and Superior.
A lawyer for Superior said the company does not comment on investigations. Goldline officials said customer complaints are infrequent and it responds immediately address them. In a letter to ABC News, Scott Carter said, "When we learn that customers have not received the experience they deserve, we investigate and take action."
In launching the probe into gold sales, investigators in L.A. and Santa Monica are opening a new front in a long-running and very public dispute over the way Goldline has turned the sale of gold into a massive retail operation that capitalizes on popular conservative figures – most notably Glenn Beck.