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Dcscott

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Reply with quote  #31 
Numis LLC.... Started in 2014 and CM is a general manager... Royal gold and jewelery.. CM is a " principal" More ways to spread our bullion to more victims?
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JG

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Reply with quote  #32 
Quote:
Originally Posted by Dcscott
I've been researching and found our CM is a " principal" at royal gold and jewelery of houston.. Another gold outlet to launder gold and cash.. Why carry gold when you can send digital money? Maybe he bought bitcoins with all that bullion...


That's another can of worms you just opened...

The short version is that there appears to be [1] a family that runs a "Royal" coin store (which has had a number of similar names starting with "Royal") in Houston, TX that was once owned by Charles and Vivek Katyal (co-inventor of the patent, and ~40% owner of Bullion Direct), and [2] a holding company "Royal Precious Metals Company" (used by Charles and Vivek to own/run the Royal coin store, and to start Bullion Direct).

The family doesn't seem to have any connections to Bullion Direct since around 1999 when it appears they bought the store, except for one curious thing:  someone with a name matching someone who works there is owed $1.8M by Bullion Direct (one of the ones listed as a "Market Maker"). Huh.

Royal Precious Metals Company owns about 2% of Bullion Direct. They are also listed as a creditor of Bullion Direct. RPMC's current mailing address is the same UPS Store mailbox that Charles is using as his mailing address.

Things get a bit crazy as I have found at least 5 legal names beginning with "Royal" associated with that business.
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JG

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Reply with quote  #33 
Quote:
Originally Posted by Dcscott
Numis LLC.... Started in 2014 and CM is a general manager...


Is that NumisDirect, LLC? That is the one they used for numisdirect.com (that never really went anywhere, although certainly ate up some cash).

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robertmbeard

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Reply with quote  #34 
The list of "Market Makers" definitely warrants added scrutiny, given their likely closer connections to Charles McAllister...
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JG

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Reply with quote  #35 
Quote:
Originally Posted by robertmbeard
The list of "Market Makers" definitely warrants added scrutiny, given their likely closer connections to Charles McAllister...


You are very smart.

I just posted the first of 3 posts at http://about.ag/BullionDirect.htm about some serious problems going on with the bankruptcy. One of the next 2 posts is going to discuss the possibility of fraud relating to some of the accounts. Of of the "Market Maker" accounts is shown as being owed $500,000, yet the person it is owed to borrowed $125K from Bullion Direct in 2013 -- something that just doesn't make sense.

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robertmbeard

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Reply with quote  #36 
JG:

Good catch on the $125K loan vs. market maker entry above.  I don't get the impression that Bensimon or Martinec are checking any of those things.  They likely won't get concerned until their outrageous charging (at typically $300/hour) completely drains the remaining liquid assets of BD.  At that point, they likely will file for Chapter 7 liquidation anyway, so maybe they never will check the accuracy of market maker and other big creditor listings...  I hope the Unsecured Creditor's Committee and their outrageously charging lawyer ($450/hour) will submit filings to the court to investigate the market maker entries.  But I get the impression that the UCC is only concerned about IRA account holders and whether or not to pursue a suit against Equity Institutional.  While I support that effort, I do think there is a risk that shady entries in the creditor listing, especially the market makers, may go uninvestigated or challenged...
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JG

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Reply with quote  #37 
Quote:
Originally Posted by robertmbeard
Good catch on the $125K loan vs. market maker entry above.  I don't get the impression that Bensimon or Martinec are checking any of those things.  They likely won't get concerned until their outrageous charging (at typically $300/hour) completely drains the remaining liquid assets of BD.


I certainly hope they are looking at those things. But after my 3 posts, I think people are going to realize that they cannot treat this like a typical bankruptcy. This is a sizable Ponzi-like scheme with an ongoing criminal investigation, and is being closely watched.

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JG

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Reply with quote  #38 
Quote:
Originally Posted by mindmelter
JG, I really hope any investigative agencies are looking at your website because your giving them leads on a silver platter.


Some of what I post on the website (http://about.ag/BullionDirect.htm) is aimed in part to get the attention of various people who are likely reading it. And at some point, there is a good chance I will get some contacts for certain information (e.g. for The Tulving Company I had a steady source of tips involving wrongdoing at the company, and had the appropriate contact for passing the information to).

Some information, however, I cannot post on the website, and must go through direct channels (or languish). For example, if I get an anonymous tip that "Joe Smith worked at Bullion Direct in 1974, and was on camera stealing 4 monster boxes of ASEs", I cannot publish that (Joe Smith could sue me if I was wrong, or posting that could let Joe know that someone was on to him and give him a chance to cover his tracks).

And I should add that not everything that I come up with is my own work, I *do* plagiarize at times to various degrees. For example, at times I may say that I got information from an anonymous source, but at other times I may not (e.g. if saying so might help someone uncover the identity of the anonymous source).

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Dcscott

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Reply with quote  #39 

Quote:
Originally Posted by JG
Quote:
Originally Posted by Dcscott
Numis LLC.... Started in 2014 and CM is a general manager...


Is that NumisDirect, LLC? That is the one they used for numisdirect.com (that never really went anywhere, although certainly ate up some cash).

It appears as a separate entity Along side Numisdirect. I was trolling around and found a linkedin-like site that had him listed as a GM for several companies, including as a "principal " @ royal coin .

 

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Dcscott

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Reply with quote  #40 

Quote:
Originally Posted by jkline
Would be interested to know the mechanics of how CM would get $35 mill in gold out of the country.  Other than private jet, I just don't see how he could do it without a paper trail.

Well, is it really $35million ( or 1947 lbs) of gold , or just "money" considering he apparently did not buy the metal he was supposed to (never made it to the Vault.)

 The  4% he did have, was probably just his reserve to fill orders for delivery. The way I see it happening is he took the money( our checks), invested part of it in the software and diverted the rest to one of those tax havens/money laundering banking capitals like ..Switzerland, Lichtenstein, Cayman islands, and maybe Dubai.

He went to Italy to buy a ( $multi-million ) villa in Tuscany( had to see it before buying it), and took a short train ride ( anonymous) to  Switzerland or  Lichtenstein , and opened trust funds for his kids. Make payments in increments of $9999.00 so as not to raise any flags..

possibly , as previously mentioned, bought  below market  bullion in Dubai to use for deliveries. And again, we know of only two trips he made, since he asked for reimbursement. He could have made many more ( try searching his frequent flier miles!) that were off the books.

Just my opinion.

 

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robertmbeard

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Reply with quote  #41 
Dcscott:

I agree with the speculation you have above as being more feasible.  Charles McAllister has had 15 years of his business to refine his methods of fraud and whatever skimming off the top he was doing...
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Carolline

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Reply with quote  #42 
In a Dubai mall. . .

Gold ATM.jpg

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gyro

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Reply with quote  #43 
Quote:
Originally Posted by robertmbeard
It also doesn't make sense being 2 months before declaring bankruptcy.

So, Charles McAllister took a "business" trip to Italy and Dubai during the 90 days prior to filing for bankruptcy, when he was the only remaining employee of BDI and Nucleo, if what I heard above is correct.  That is not only odd but is very suspicious...  I would hope that the FBI is trying to trace any leads about that "business" trip, to see what they can find.
Quote:
Bullion Direct: Another Bullion Biz Bankrupt – Vault Virtually Empty
By Joshua Gibbons - About.Ag - for CoinWeek....
[bullion_direct_slide] 
As a bullion investor and webmaster of About.Ag, I understand well the risks that customers face when ordering precious metals, especially from out of state vendors or websites. I've seen firsthand the implosion of such companies and the havoc these business failures bring to investors - people like you and me who want to diversify their asset holdings and look to bullion as a way to do that. Last year, I had started warning people about The Tulving Companya few months before they shut down owing customers $17M, so I quickly noticed the red flags showing that this respectable 15-year-old company might have serious financial problems. So when, in June,  a customer alerted me to problems at Bullion Direct, saying that he had waited several months without receiving metal he had purchased. I looked into it.

I sent an email to the company's owner, and let him know my concerns. He quickly responded, and I gave him some information about how the Tulving fiasco unfolded and some general advice. The next day, Bullion Direct suspended operations.

Last week, Bullion Direct filed for Chapter 11 bankruptcy, stating they have as many as 6,000 total claimants and total debt “perhaps as great as $25 million.”

Calculations I have run suggest the debt may be significantly higher than that.

Yesterday, Bullion Direct filed a declaration that stated that “when a customer placed an order, the precious metal was not actually purchased unless the customer agreed to take actual delivery of the product.” In other words, they never bought the metal customers purchased if it was to be stored.

According to Bullion Direct's statement, somewhere around 6,000 customers bought $25M of metal from Bullion Direct, and to store for them -- but Bullion Direct did not actually purchase the metal.

Of course, Bullion Direct's customers didn't know this because when the company's customers paid the company for bullion and storage, Bullion Direct would show the metal in their portfolios. Now we know that these holdings never existed.

What sets this sad situation apart from the failure of The Tulving Company is that people stored metal with Bullion Direct (or at least thought they did). So while Tulving customers lost metal from a single purchase, most Bullion Direct customers lost metal from many purchases, often over the course of years. Bullion Direct also held metal -- paper, actually -- in hundreds of IRA accounts. People were trusting Bullion Direct to safeguard their life savings. That trust was misplaced.

What We Know

Bullion Direct opened for business in 1999, and patented its unique process for connecting buyers and sellers of bullion. Customers could either buy directly from Bullion Direct, or through other sellers in the Nucleo Exchange. Bullion Direct offered free storage of metal (which we now know to be a warning sign), likely to entice people to later sell their metal on the Nucleo Exchange (where Bullion Direct would make a commission).

Going back at least as far as 2003, despite advertising the storage as "allocated" and "not pool metal", the Bullion Direct terms of service stated that their storage was really an "undivided share of a fungible lot" and that Bullion Direct "may use or act as if it were the owner of the commodity held for Customer."

To most people, that meant if you bought 2014 Eagles, they might have 2015 Eagles on hand, but the total ounces of metal was the same as customers had bought. We now know it meant something different to Bullion Direct.

In 2011, Bullion Direct created a subsidiary Nucleo Development Co. to handle the software platform, expand it to other markets, and license the patent. At times, Nucleo reportedly had over 30 employees.

What customers did not realize is that Bullion Direct "transferred funds to Nucleo for start-up expenses and continued funding Nucleo’s operations until shortly before the Chapter 11 filing." Connecting the dots, it appears that Bullion Direct took money customers were sending in for metal and spent it on Nucleo's operations, research, and development.

The Numbers

According to court documents, there are as many as 6,000 creditors (although, I believe that number is low, and closer to 8,000), and they are owed "perhaps as great as $25M." A Joint Stipulation between Bullion Direct and the depository shows inventory that I calculate as being worth roughly $635,000. That's about $.03 of real metal for every $1.00 of metal supposedly being stored.

The bankruptcy petition gives a range of $10M-$50M for the value of the assets, which presumably means that the intellectual property (mainly the patent and software) is believed to be worth at least $9M.

As shocking as it is to find out that almost none of the metal supposedly stored for customers ever actually existed. At least there is hope that creditors might be made whole, if the intellectual property has the value that Bullion Direct thinks that it does.

The Filing

[bulliondirectfiling] 

What You Can Do

If you are not owed metal or money, consider yourself fortunate, and make sure to research bullion dealers each time you place an order. Even if you have had a positive shopping experience with a company, continue to do research before placing additional orders.

If you are owed metal or money by Bullion Direct, expect a long and drawn-out process. You may get some of your money back, but likely not all. Tulving customers have been waiting over a year without seeing any money yet.

If the Chapter 11 bankruptcy proceeds as intended, there should be no need for you to do anything. Your name will automatically appear in the list of creditors that will be filed in the bankruptcy schedules by Bullion Direct. If what you are owed is properly listed, you will have to wait for the legal proceedings to run their course before the court distributes moneys to the company's creditors.

If you are not included on the list of creditors, or if the bankruptcy is converted to Chapter 7, you would need to file a Proof of Claim form. You can do so now even though it is not yet required, but know that this is a public document, and you are responsibly for paying the filing costs.

I will continue to keep readers abreast of the situation at my blog: http://about.ag/BullionDirect.htm. You can sign up on that page for regular updates. My friends at CoinWeek.com will also continue to follow the issue and provide updates whenever new information arises.

Based on this great article, I think this is basically what happened...

Charles fell into debt from the very get-go (1999) because he basically ONLY BOUGHT METALS whenever customers requested delivery (which only a minority did).  And since metal prices were basically rising the whole time he was in business, this meant that he was continually buying at higher prices later on then the lower prices his customers bought in at earlier on.  I mean, what a FUNDAMENTAL ERROR!!!

The only way he could have made money doing this, is if metal prices were trending down the whole time.  But they weren't - they were generally trending up.  Like, let's say a customer bought some gold for $100 in 2008.  He then decided to take delivery in 2010 after it rose in value to $300.  Well, only then did Charles actually buy the gold (at spot price) to deliver it.  Thus, he paid $300 to deliver gold to a customer who had only paid $100 for it 2 years ago.

Well, upscale this losing scenario to several hundred million dollars - and you can see why his basic business model was an EPIC FAIL from the very beginning!

And yet, he kept digging his hole deeper, while somehow avoiding filing income tax returns for a whole damn decade.  But eventually (around 2011), he couldn't even afford to fill delivery orders anymore, and so turned his attention from Bullion Direct to his subsidiary, Nucleo Development Co, instead.  Since Bullion Direct was obviously a lost cause by this point, he just finished sucking it dry and funneled all its remaining assets into his new host, Nucleo - his last hope that at least had more relative potential (than Bullion Direct).

So, most of his money was already lost on most transactions from only buying metals late for delivery.  Small remaining funds were then transferred to his Nucleo start-up - and burned up quickly there.  Desperate actions right before filing for bankruptcy on July 20, 2015 (like a trip to Dubai), were likely all last ditch efforts to keep Nucleo afloat too.

But obviously, these all failed too - and he finally threw in the towel on July 20 - fled into a $1 million Austin home, and may now be in Auburn, AL now.  With probably some 8000 of us left holding his bag. [nono]

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