Wisconsin retirees caught in gold coin investments scam
Ron Werner, 62, worked in a Sheboygan paint factory for 42 years before he gave his body a break and began enjoying retirement, puttering at home, camping and riding his Harley-Davidson.
His retirement fund was being managed by Transamerica, a typical company-sponsored 401(k).
Then in August 2019 he got a cold call from a guy in Hollywood, California, pitching investment in gold and silver coins through Metals.com.
“He asked a lot about my views, which are conservative. He said he and his company were also very conservative. I talked to him quite a long time,” Werner recalled.
Werner said he’d already been thinking about coins “because of what’s going on with the government, and the world” and the approaching election, “and Biden possibly getting in.”
So Werner moved about $100,000 out of what he called his pension and into Metals.com. He said things were fine for the first few months. When he needed to sell some of his holdings for monthly income, he got the money and a statement about which of his coins had sold for what prices. The actual coins were kept in a third-party depository vault in Virginia, he said.
Then last fall, he said, when he called the company, he got a recording saying it was no longer in business.
“My stomach fell. It was terrible,” Werner said. Then he read about an FBI raid and a Texas receivership.
Now Werner is among at least 19 Wisconsin investors — and 1,600 nationwide — depending on government regulators to recoup some of the $185 million of retirement funds they invested with Metals.com. Wisconsin’s Department of Financial Services estimates state residents put about $2.7 million into the scheme and that many lost more than half their retirement savings.
In September, the federal Commodity Futures Trading Commission and 30 states — including Wisconsin — sued three Los Angeles-based precious metal dealers and their owners. A federal judge in Texas froze the companies’ assets and appointed a Dallas lawyer who specializes in such work, Kelly Crawford, as receiver.
Investors have until April 30 to submit claim forms through the receivership website, https://metalsandbarrick capitalreceivership .com/.
The regulators say the defendant companies grossly inflated the cost of the bullion they sold to investors and justified the prices by claiming the coins were exclusive and collectible and worth much more than their melted value as gold or silver.
Crawford’s most recent report indicates about $8.3 million was available to reimburse investors and that he was in the process of identifying, seizing and selling numerous other assets connected to the defendants, from stock in companies like Spotify and SpaceX to real estate, luxury cars, jewelry, artwork and musical instruments.
The receiver also wants to recover “several million dollars” in commissions paid to sales agents from investor funds.
“Adding more investors to a fraudulent scheme does not provide value, but rather only enlarges the number of victims,” Crawford wrote.
The scope of the fraud means it will take months to pursue all the claims against bad actors, process claims from the defrauded investors and properly distribute whatever assets are ultimately recovered. Crawford estimates the receivership will have to remain in place well into 2022.
Werner considers himself lucky among other Metals.com investors, in that he was withdrawing money for several months. When he sold coins for those withdrawals, and later when he heard about the problems with Metals .com, the spot prices for gold were higher than when he bought his coins, so he didn’t lose all his retirement money.
Werner said he feels betrayed, and embarrassed, but has told authorities he’ll testify or do anything required “so that these guys pay.”
“It’s pretty dirty when you’re targeting older people and taking their retirement money,” he said. “I feel real bad for people who lost all their money. What are they going to do?”
Werner said he doesn’t know how the salesman got his name, but that he definitely played heavily to Werner’s conservative, family-oriented Donald Trump-supporting views.
“We talked a lot about personal stuff. He said he was married, had kids, lived in Hollywood, a real conservative,” Werner said. “He played on my political views a lot and made me trust him.”