Congress will open hearings Thursday into the controversial sales practices of Goldline, the precious metals dealer that pioneered the practice of weaving its sales pitches into broadcasts by popular conservative political personalities such as Glenn Beck, Mike Huckabee and Fred Thompson.
Rep. Anthony Weiner, the New York Democrat who called the hearings, described Goldline sales tactics as a "profound rip-off" in an interview with ABC News. He plans to focus on methods that have turned the sale of gold coins into a multi-million-dollar bonanza for Goldline and other firms, especially in recent years as economic uncertainty has turned gold into a hot investment. The company, which is sending a top executive to testify, has said Weiner's attacks are motivated by "a political agenda."
But ABC News has learned the hearings may also draw attention to some of the controversial figures involved in the company, and activities they engaged in prior to taking jobs on the Goldline sales force.
Among them are three Goldline sales associates who were taken to court in the 1990s by the Securities Exchange Commission on allegations that they used deceptive mass mailings and what are sometimes called "boiler room" tactics to defraud 115 mostly elderly investors out of $1,180,000 over 13 months, according to court records. The scheme allegedly involved selling shares in a 1-900 telephone line. Investors were allegedly promised 24 percent returns after a four-month period or a 203 percent return after a sixteen-month period -- estimates the SEC called highly misleading and false, the court papers say.
Paul Land, Charles Boratgis and Morrey Wasserman settled the case without conceding guilt, but agreed to return all the money they had been accused of obtaining through their allegedly fraudulent scheme.
One of the three, Boratgis, later got involved in another controversial business, an investment business that the Commodity Futures Trading Commission described as engaging in "churning," or buying and selling excessively to generate commissions, in a scathing 2002 ruling. That year, the National Futures Association found that Boratgis had "made deceptive and misleading sales solicitations" and permanently banned him from the futures business.
Another of the salesmen, Wasserman, is identified in a complaint filed with the Federal Trade Commission this past February. The complaint against Wasserman includes a claim by a Goldline customer that Wasserman "outright lied to me" after the Goldline customer reportedly claimed he had been "ripped off big time." A spokeswoman for the FTC said she would not say whether or not Wasserman was being investigated, because the FTC does not comment on investigations.
Asked about the three salesmen, Scott Carter, Goldline's executive vice president and on-air pitchman, told ABC News he had only recently become aware of the allegations, but he did not consider them significant.
"It's something that's been resolved," said Carter from Washington, where he had flown to testify at Weiner's hearing. "Time has passed. The debt to society has been paid. All three are in good standing with the company. All three meet our standards. It's irrelevant to what Goldline does. These are three of 350 employees. There's not a death penalty here on their ability to work."