Discount Gold Brokers advertise heavily on cable television. Now it's feared, one Los Angeles-based company may have shut its doors and may have gone out of business
Gold prices are big news these days. Charles Kurtzer of Livermore had been watching the price of gold closely for months. So had Luis Gutierrez of San Jose. Both had seen the Discount Gold Brokers commercial on cable television that promises zero percent above dealer's cost.
"The price had gone up to $1,900 an ounce and it was down to $1,300," Kurtzer said.
"It was almost $500 a coin less," Guiterrez said. "And if you bought 100 coins, that's almost $50,000.
Both felt confident the price of gold would recover.
Kurtzer purchased more than $28,000 worth in June. Then two weeks later after the price fell even further, he bought $26,000 more. Guiterrez purchased $160,000 worth of gold over a two week period.
"They had more ads on television and we assumed that it was on the up and up," Guiterrez said.
Both are still waiting for their gold. And apparently so are many others.
The Better Business Bureau has received more than 80 complaints nationwide about Discount Gold Brokers in just 13 months. Most of the complaints were for non-delivery of purchases.
Steve McFarland with the BBB says many bought from aggressive salespeople and telemarketers.
"Some of the high pressure tactics including maybe that you would miss out on the investment opportunity of a lifetime," he said.
One year ago, Discount Gold Brokers was ordered by the state to "desist and refrain from the further offer and sale of commodities" in California.
The order accused the company of "a pattern or practice of delaying the delivery of coins in violations of Corporations Code which requires shipment of the coins within 28 calendar days from full payment."
Authorities suspect the desist and refrain order was ignored.
Both Guiterrez and Kurtzer made their purchases after that order was issued.
David Swift is Guiterrez's attorney. He's representing a number of Discount Gold Brokers clients who paid for gold and haven't received it. Each of his five clients is owed between $50,000 and $200,000.
"This is a very widespread scam," he said. "I would estimate the loss to be in the many many millions of dollars."
We contacted Discount Gold Brokers back in November. Kurtzer recalls getting a phone call from the company immediately.
"You're going to get your gold, Mr. Kurtzer, but it's going to take a little more time," he said.
It was the same sort of unfulfilled promise the company also made to Guiterrez.
7 On Your Side's last contact with the company was in January. We have not heard from them since.
We've learned the company moved from Sherman Oaks to Encino. And their website now says it is no longer taking orders.
"We have had some victims drive by, but we have not been able to reach them," McFarland said. "The doors are closed or locked."
The Better Business Bureau has turned over all its complaints to the Los Angeles District Attorney's Office. Neither the DA nor the state would comment on whether they are investigating the company.
Guiterrez has sued the company and won a court order to freeze their assets.
But confidence is not high they will find any money.
"We are worried that these individuals and the company were not keeping their money in the bank very long, that they sent it offshore," Swift said.
It's believed most of the victims are senior citizens. We'll continue to follow this report and keep you posted on any developments.