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ScottBurns

Unsecured Creditors' Committee
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Posts: 14
Reply with quote  #1 

I’m writing to suggest and urge that we as the creditors make a strong case to the bankruptcy judge that the ‘corporate veil’ should be pierced in this case, andthat the personal assets of the BullionDirect company officers should be attached, so that the amount of fraudulently obtained funds refunded to the creditors will be increased somewhat.

 

The ‘corporate veil’ as I understand it is designed to protecthonest businessmen from having their personal assets attached should the business fail.

 

For example, the person or persons who have an invention, but who exhaust their line of credit after a year or two of trying to develop the invention commercially, and must declare bankruptcy.

 

There was no crime, and no false representations made on the part of the inventors, the hoped-for commercialization of the idea just didn’t materialize – perhaps the invention wasn’t as unique as believed, or perhaps attempts to market the product failed – it just didn’t sell in the marketplace perhaps.

 

But anyone who invested in the company knew up front of the risks of investing in a new invention, and willingly invested funds in the companyin exchange for interest payments and/or a stake in the business, from whichthey expected to benefit if the invention was a success.

 

However, it is clear from the fact that the BullionDirect company officers took payment for precious metals,in exchange for nothing but lies that those metals were being purchased and stored in a secure vault, thatthe officers in charge were anything but honest businessmen.   I believe it’s called ‘theft’ or ‘larceny’, both of which are criminal acts.

 

I doubt if a single creditor in this proceeding gave their money to BullionDirect with the intention of its being an interest-free loan, to a business that they had no stake in benefiting from if  had it been a big success.

 

There was never any representation made by the company indicating that funds sent to BullionDirect were for anything but the purpose of purchasing and store precious metals – which turned out to be a fraudulent LIE.

 

Perhaps they were paying their own salaries with those fraudulently obtained funds, paying office expenses, or given that at least so far there has been no legitimate accounting as to where the 20 or million dollars that is ‘missing’ was spent, it’s possible that some of it went to outright embezzlement.

 

I sincerely hope that there is a criminal investigation being undertaken to account for where those funds actually went by the FBI, but clearly, the majority of the funds did NOT go to purchasing precious metals as was represented to us. 

 

I read a claim made by BullionDirect saying that supposedly they informed creditors I believe in 2012 that they were not purchasing metal with deposited funds, but I don’t remember ever receiving any notice to this effect.   If there was any such notice, I’m guessing it was probably buried somewhere on a ‘back page’ of the website, hoping that very few if any people would ever read it!

 

Besides like a lot of creditors, I purchased my metal BEFORE 2012, and though they have closed down most of their website now, I know for sure that for a long, long time they were in fact claiming that they were buying the precious metal and storing it in a secure vault, and presenting assurances you as the ‘purchaser’ can rest easy, it’s also backed up by a Loyd’s of London insurance policy.

 

Now, since the bankruptcy, I see there is a little section on the website regarding the Loyd’s of London insurance policy, and pointing out that the policy doesn’t mean that BullionDirect may not be able to make good on its obligations to you.

 

That’s not the verbage I remember from the old days!  No, I remember seeing just a blanket-assurance that Loyd’s of London was protecting your investment, or something to that effect.

 

At any rate, the fraudulent claims made by those officers, for years, means a clear criminal line was crossed, and the courts I believe should send a clear signal to other white-collar criminals that this kind of behavior will NOT be without personal consequences and severe penalties to them personally.

 

If someone goes into a liquor store and robs them of $200, they are likely to be put in prison for 5 years or more, these company officers fraudulently absconded with 20 million or more dollars!

 

Certainly their punishment, beginning with the loss of their personal assets, should be significantly greater than the person who stole only a few hundred dollars.

 

Because of the larceny perpetuated by the corporate officers, just as occurred with Mr. Madoff, the ‘corporate veil’ should be pierced because of their criminal activity, and the personal assets of the responsible corporate officers should be attached.

 

The homes and cars that were probably paid for in part with the creditors stolen funds should be seized, assets in bank accounts and IRA accounts should be forfeited as well.

 

After all, those personal assets were amassed in part by the stealing the creditors personal funds, it’s only fair that the officers personal assets be seized to help return at least a small portion of the absconded assets of the creditors.

 

Sincerely,
Name Redacted

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stolenmetal

Junior Member
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Posts: 7
Reply with quote  #2 
I agree, I think the corporate veil should be pierced, I'm just not sure how that happens.
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JG

Administrator
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Posts: 960
Reply with quote  #3 
Quote:
Originally Posted by ScottBurns
I read a claim made by BullionDirect saying that supposedly they informed creditors I believe in 2012 that they were not purchasing metal with deposited funds, but I don’t remember ever receiving any notice to this effect.   If there was any such notice, I’m guessing it was probably buried somewhere on a ‘back page’ of the website, hoping that very few if any people would ever read it!


From what I have seen, there was no letter to customers (and certainly nothing saying that they would not purchase metals). They changed the Terms of Service after they were already insolvent, in a way that they interpreted to allow them to not actually purchase metal unless people requested delivery. But they still advertised the storage as "allocated", "not pool" and "not the assets of Bullion Direct." And it is clear that the metal from before 2012 is gone, too, for which no explanation has been given.

The FBI is indeed investigating (and others may be as well).

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jkline

Member
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Posts: 83
Reply with quote  #4 
I don't see how the veil could not be pierced.  CM was paying himself a lavish salary for 3-6 years when he began running a ponzi scheme.

A forensic accountant needs to go over everything.  It will cost alot, but I would prefer not getting anything back if it means CM becomes destitute, instead of getting pennies and he gets away with this.
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ChevyRacer

Member
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Posts: 94
Reply with quote  #5 
I've said from the beginning that the corporate veil should be pierced. I have no expectations that I'll get any money or metal back, so my only goal is to a) see Chad McAllister in an orange jumpsuit and b) get any and all of his assets.
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Sil Verasset

Junior Member
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Posts: 2
Reply with quote  #6 
http://corpgov.law.harvard.edu/2014/03/27/the-three-justifications-for-piercing-the-corporate-veil/

http://www.nala.org/Upload/file/PDF-Files/FactsFindings/thomason.pdf
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