Gold dealer Superior Gold is seized, assets frozen By Abby Sewell, Los
Angeles Times | December 09, 2010
Judge turns the company's operations over
to a receiver after L.A. County and Santa Monica sue the
company and owner Bruce Sands, alleging fraudulent business
practices.
After numerous consumer complaints, a Santa
Monica gold dealer's assets were frozen and its operations
turned over to a court-appointed receiver, officials said
Tuesday.
A judge froze the assets of Superior Gold
Group on Monday after it was accused of fraudulent business
practices in a civil lawsuit against the company and owner
Bruce Sands filed by the Los Angeles County district attorney
and the Santa Monica city attorney.
The company, which sold gold coins and bullion
and other precious metals, took payments from customers
and never provided the gold ordered, charged prices much
higher than fair market value and misled customers into
buying expensive specialty coins, the agencies contended
in their lawsuit, filed Friday.
Neither Superior Gold nor Sands could be
reached for comment. Phone calls to numbers on the company's
website went unanswered Wednesday. The company had not filed
a response to the complaint and no company representative
has appeared in court, officials said.
In their lawsuit, the agencies said Superior
Gold took advantage of investors who flocked to gold as
the price of the precious metal rose and the value of many
other investments fell in recent years.
"By fostering fear and confusion among
its customers, Superior has induced them to pay far above
market prices for various gold products," the complaint
said.
Steven Siry, 61, of Los Angeles is one customer
who believes he was ripped off. Siry said he invested $20,000
in a "gold IRA" through Superior Gold. But company
representatives sold him collector's coins at an inflated
rate rather than offering him bullion, and it took more
than a year and numerous phone calls before the coins were
delivered to the trust company that was to hold them, he
said.
Siry estimates the actual value of the gold,
when it finally arrived, as a little more than half of what
he paid for it.
"It was a big mess, it was uncomfortable,
and I felt kind of stupid, quite frankly, because I didn't
do enough shopping before I used them," he said.
Adam Radinsky, head of the Consumer Protection
Unit of the Santa Monica city attorney's office, said his
office began receiving consumer complaints about the company
around May and launched an investigation in conjunction
with the L.A. County district attorney's office.