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Lars

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Reply with quote  #16 
These may have been mentioned, but a couple of things.  First, it appears that BD actually DID buy metal, but usually for products that are dated or subject to appreciate in value (not only numismatics, but things like Lunar Series, Pandas, etc.), due to the possible difficulty of replacing them at close to spot prices, or at all,  later on.  Things like Eagles, Maples,  Austrian Phils, etc., which could be purchased later at a slight premium over spot were seldom purchased so the funds that paid for them could be diverted elsewhere.

The second thing is, even though I'm not a tax attorney or CPA, I don't see how BD's failure to buy metals for IRA accounts constitutes anything but fraud.  Maybe, and that's maybe, they could use the ToS to do that with regular accounts, but when the IRS tells you what kind of metal you can have in a Metals IRA, I would think the company selling the metals would be obligated to purchase the product ordered by the IRA holder and have it stored, segregated or non-segregated.  It will be interesting to see how BD and their attorneys defend this.
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LoneStarHog

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Reply with quote  #17 
Quote:
Originally Posted by harley_52
...I purchased gold and silver bullion that was listed on their website as "in stock."...


I have to wonder if he was utilizing the method used, for example, on eBay.  The seller will show an available quantity (i.e. In Stock) only to discover upon receipt that the seller is shuffling paper and the actual inventory is at the manufacturer/wholesaler, who ships directly to the customer.

This has happened on eBay and numerous other Internet retailers.  Some will even refer to all their "warehouses" and shipment will be from the closest one.  "Their warehouse" is actually those of the manufacturer/wholesaler.

Is it deceptive?  I guess no one complains about verbiage as long as the product arrives in a timely manner.
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roadrunner

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Reply with quote  #18 

Who exactly is a storage customer? And how is that designation determined? 

During the order process, we were given the option of BDI holding the product until given shipping instructions, the ‘product draw’. I placed an order on 4/24 and asked them to hold it. I placed another on 5/1, again on hold. Then on 5/14 I did a product draw and requested those two orders be shipped to me. I did not receive the product. 

Are they saying that by checking the ‘hold order’ button I became a ‘storage customer’, meaning they didn’t have to purchase the product I ordered? And when I requested a product draw a few weeks later, they were not obligated to send me the product because they never ordered it, and if they had, it would be considered unallocated versus allocated, and they don’t have to honor unallocated product draws? 

As someone previously noted, Dan Bensimon is not our friend. His job is to get the most for BDI, and screw the customers who were cheated. Sounds like he may be a bigger lying POS than Charles. The judge is supposed to be impartial. Is there anyone representing those of us who were defrauded? Or are we to depend on the judge to see things our way?    


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BDistheBestest

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Reply with quote  #19 
I'm pretty sure the judge and DA will see things our way, as, to my mind, this is an open and shut case of fraud.  It will probably be a significant time delay before this happens, but I don't really see how any reasonable judge or DA could see otherwise.  My guess is Mr. McAllister and any accomplices will be locked up Bernie Madoff style.  Unfortunately, like in the case of Mr. Madoff, us "customers" will get only pennies on the dollar, if anything.
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kimk

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Reply with quote  #20 
Justice will prevail, if we get our money back with letter 'K'(less likely, 15k versus $15[confused])
Justice will prevail, if criminal case or class action against CM will not fail(if any)
Justice will prevail, if he will be hopefully in a jail

JG, what would you expect? if CM hired them for our money, to protect his and BD interests
and NOT we hired them to protect our interests for his money...game is to continue
I wonder: couple years ago I have worked for BAC as a developer/consultant with hourly rate about
48-50/hour, and agency got paid 78/hour. Was there any special reason that Mr.CM paid 150/hour
to Nucleo analysts/programmers/consultants? and if yes, is it possible that some of that funds
rollback/fallback to the CM's wall safe, or sitting now in Cambodia or Thailand? If those consulting agencies were ever changed, or Nucleo worked with the same one for a years?

I believe this is something, that should be investigated by DA/FBI or other government agencies.
Our 6000+Creditors Money($MMM), just can not disappeared without trace.

Also some government agencies or independent attorneys should validate Terms and Conditions of BD, to make sure it is properly represented and treated in Bankruptcy Court..

Thanks for your input again JG, and for all your postings and updates
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spainte

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Reply with quote  #21 

Quote:
Originally Posted by JG

I have a new post at http://about.ag/BullionDirect.htm (I'm guessing that's where you saw the quote), basically disproving that theory. It was likely carefully crafted to make it sound like the new management is saying "we can't call this fraud at this point because it may have been legal."

I discovered that Bullion Direct stated point blank that these were allocated accounts.

I contacted the new CEO (who wrote the words) and bankruptcy attorney (who presumably authorized it), to let them know that if they try in any way to convince people that *they* believe that Bullion Direct was not obligated to purchase metal for allocated accounts, the media will have a field day with it (and, I was polite and didn't say it, but the media would make them look like laughingstocks).

The position that the new CEO and attorney seem to be taking -- that the customers misunderstood the contract -- it completely unacceptable, and I am hoping they clarify their position before the media gets involved.

Allocated accounts are allocated; it's a very, very clear term in the industry. It's sancrosanct. What Mr. Bensimon and Mr. Martinec are implying is akin to a bank that looted safety deposit boxes, and claimed that the terms the customers signed could somehow be interpreted as allowing for it. If I were them, I would want to distance myself as far as possible from that interpretation.

Even a simple "Prior management interpreted the terms as []... but if we were to continue operations, we would not operate that way." Something clear, without admitting fault of prior management, that shows that the new management isn't dumb (I'm not saying the new management is dumb -- just that he needs to do something to distance himself from this opinion to prove he is not). From what was stated in the declaration, there is NO INDICATION that the current management understands that a company must purchase product for an allocated account. And if the current management does not understand that, he is obviously not fit to run the company and must be removed.


If I understand that the new CEO and lawyer AGREE with McAllister's interpretation of the 2012 ToS? Chapter 11 with intent to continue operation - or at least a new way of doing business by:

  • Cash checks for Nucleo deposits of metal with no intent to purchase metal but for 'continued operations' Business as usual post 2012
  • Cash checks for retail customers requesting delivery but don't deliver. Violation of 2012 ToS. Simply to line their own pockets.
  • Accept metal deposits with no intent to make payment to retail customers. Violation of 2012 ToS. Again, only to line their own pockets.
OR:

The new CEO and lawyer are in DISAGREEMENT with McAllister's interpretation of 2012 ToS:
  • The judge would have no choice but to dismiss the motions as an attempt to continue robbing customers in order to line their own pockets
  • This would immediately turn into intentional defrauding the customers and this would shift to Chapter 7 (?).
  • The new CEO and lawyer would be dumped by the court (?)
  • McAllister would be left high and dry by his buddies.
  • A stronger case for criminal misconduct.

Am I thinking about this correctly?
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JG

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Reply with quote  #22 
Quote:
Originally Posted by tboll
JG, I seriously doubt that the 1% margins, after deducting for overhead costs (storage, prep, administration) could have covered more than 1-2 employees for all of BD, let alone a set of 30 business analysts, programmers, etc.   I worked for a pharm that contracted in system engineers and they could easily cost us $150+/hr (because the agency takes their cut and has to give out benefits, etc.)  At $150/hr that adds up to $300K / employee.  Times 30 and you get... $9M/yr.  An equally big question would be if Charles wasn't selling off the gold, where did he get the money to pay these people?


The 1% margins should have been fine; going both ways, that's 2% per trade. Bullion Direct claims to have done over $1B of business, which would (assuming true) likely be around $100M over recent years. That's $2M/year of cash coming in. Presumably shipping costs covered their shipping/insurance.

The $300K is for contract workers, who get paid a lot more than hired workers. I see signs of employees at Nucleo, but not contract workers. One of the employees was a college student.

As for the cash, customers would send BD either cash or metal. The metal from customers went to other customers. The cash went to Nucleo (presumably, and/or other places).

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JG

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Reply with quote  #23 
Quote:
Originally Posted by harley_52

Unlike this smoke screen they're trying to use for those who had metal being stored by BD, the facts are crystal clear about people in my category.  We were defrauded.  They stole our money.  I submit it's also crystal clear Mr. McAllister never intended to ship any metal to me, or others like me.  He already KNEW the ship was sinking and that he didn't have the product "in stock" as he had claimed.


IIRC, Mr. Tulving plead guilty to wire fraud, which he was accused of because he accepted orders knowing that they could not get sent in the timeframe specified in the terms.

Quote:
Originally Posted by harley_52
I'm not entirely sure why a bankruptcy court would involve themselves in this kind of "who shot john" discussion.   It seems more appropriate for a criminal court.


My *guess* is that they wanted to come up with a very brief, simple way of saying "Customers are going to shout FRAUD but there could be a logical explanation", so that Mr. Martinec and Mr. Bensimon are not ousted. In the Tulving case, the U.S. Trustee came in early on, which brought in Chapter 11 Trustee, kicking out Mr. Tulving, the well known team he was going to use, and the bankruptcy attorney.

Bullion Direct, in their defense, is being very clear that all (or nearly all) customers believe they owned metal stored in the vault. The problem is that they are also pooh-poohing it, a "Oh, those poor people read the terms thinking they owned the metal." response.

From what I understand, the bankruptcy court does not handle the fraud issue at all: "The U.S. Trustee pursues civil (non-criminal) penalties, and refers cases of apparent criminal fraud to the U.S. Attorney for investigation and criminal prosecution." So if the U.S. Trustee in this case see apparent fraud, they will refer it to the U.S. Attorney.





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JG

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Posts: 991
Reply with quote  #24 
Quote:
Originally Posted by kimk

JG, what would you expect? if CM hired them for our money, to protect his and BD interests
and NOT we hired them to protect our interests for his money...game is to continue
I wonder: couple years ago I have worked for BAC as a developer/consultant with hourly rate about
48-50/hour, and agency got paid 78/hour. Was there any special reason that Mr.CM paid 150/hour
to Nucleo analysts/programmers/consultants? and if yes, is it possible that some of that funds
rollback/fallback to the CM's wall safe, or sitting now in Cambodia or Thailand? If those consulting agencies were ever changed, or Nucleo worked with the same one for a years?

I believe this is something, that should be investigated by DA/FBI or other government agencies.
Our 6000+Creditors Money($MMM), just can not disappeared without trace.

Also some government agencies or independent attorneys should validate Terms and Conditions of BD, to make sure it is properly represented and treated in Bankruptcy Court..


I'm guessing CM paid Nucleo employees more like $50/hour (including benefits/taxes). Tulving paid his employees under $25/hr (but they were not programmers or other specialists).

It is certainly possible money went other places.

The government is investigating, I am certain of that.

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JG

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Posts: 991
Reply with quote  #25 
Quote:
Originally Posted by spainte
If I understand that the new CEO and lawyer AGREE with McAllister's interpretation of the 2012 ToS? Chapter 11 with intent to continue operation - or at least a new way of doing business by:


The CEO and lawyer have not said if they agree with it or not; however, they have NOT said anything suggesting that they disagree.

I think it is fair for creditors to assume that they agree, unless they hear otherwise (I believe it is a near requirement for lawyers to take the side of their clients).


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JG

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Posts: 991
Reply with quote  #26 
Quote:
Originally Posted by roadrunner
Who exactly is a storage customer? And how is that designation determined? 

During the order process, we were given the option of BDI holding the product until given shipping instructions, the ‘product draw’. I placed an order on 4/24 and asked them to hold it. I placed another on 5/1, again on hold. Then on 5/14 I did a product draw and requested those two orders be shipped to me. I did not receive the product. 

Are they saying that by checking the ‘hold order’ button I became a ‘storage customer’, meaning they didn’t have to purchase the product I ordered? And when I requested a product draw a few weeks later, they were not obligated to send me the product because they never ordered it, and if they had, it would be considered unallocated versus allocated, and they don’t have to honor unallocated product draws? 

As someone previously noted, Dan Bensimon is not our friend. His job is to get the most for BDI, and screw the customers who were cheated. Sounds like he may be a bigger lying POS than Charles. The judge is supposed to be impartial. Is there anyone representing those of us who were defrauded? Or are we to depend on the judge to see things our way?    




According to Mr. Bensimon, the company did not purchase metal until you requested delivery. So you would have been a storage customer until that point. At the point you requested delivery, they then expected to purchase the metal for you (but at the end could not).

There should be an unsecured creditors' committee, which can hire an attorney. And even better, I'm on your side. [smile]

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JG

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Posts: 991
Reply with quote  #27 
Quote:
Originally Posted by tboll
I worked for a pharm that contracted in system engineers and they could easily cost us $150+/hr (because the agency takes their cut and has to give out benefits, etc.)  At $150/hr that adds up to $300K / employee.  Times 30 and you get... $9M/yr.  An equally big question would be if Charles wasn't selling off the gold, where did he get the money to pay these people?


I forgot another piece -- during my early investigation into Charles McAllister, I discovered that he was the CEO of a company called Nucleo Staffing (registered April 2, 2012). The address is one Bullion Direct uses today, Nucleo is a trademark that Bullion Direct registered. So this is very likely another wholly owned subsidiary of Bullion Direct.

This would strongly support that the Nucleo employees were indeed employees, and not doing contracting work. And that if any profit was being made from contract work, it was going somewhere that the CEO of Bullion Direct so desired. And if Bullion Direct employees were being paid through Nucleo, it would complicate the paper trail.

Charles is also CEO of Nucleocore (also same mailing address as Bullion Direct). Among other things, they say "Our secure facilities offer the safest storage of your valuables."
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nobody

Senior Member
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Posts: 360
Reply with quote  #28 
It's worth remembering that at some point JG asserted there was potentially at least one other shareholder.

Officers have a fiduciary requirement to maximize value for shareholders, not officers, and constructing an offer that favors classes of shareholders over another could be a breach of duty.

I'm not saying Dan's your friend, but I'm guessing this isn't the last company Dan ever plans to handle BK for - 600k of disputed assets isn't enough to make a man like that retire.

So he will charge you for his work, maybe more than you think it's worth - but I don't think he'll participate in fraud -- after all, there are at least a few millionaires on the lists I've seen, and while they play quietly, they play for keeps.

-n
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plankton

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Posts: 65
Reply with quote  #29 
Ole 'Chuck' is also 'General Manager' of:
- Nucleo Development Company, LLC
- Nbd Holdings, LLC
- Nucleocore, LLC
- Numisdirect, LLC
- Nucleo Staffing, LLC
I wonder how those companies are doing and any relationship to BullionDirect?
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JG

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Posts: 991
Reply with quote  #30 
Quote:
Originally Posted by plankton
Ole 'Chuck' is also 'General Manager' of:
- Nucleo Development Company, LLC
- Nbd Holdings, LLC
- Nucleocore, LLC
- Numisdirect, LLC
- Nucleo Staffing, LLC
I wonder how those companies are doing and any relationship to BullionDirect?


The first one is a wholly owned subsidiary of Bullion Direct.

NBD, formed in 2010, might have been something like "Nucleo Bullion Direct Holdings">

Nucleocore is almost certainly dead: it offered vaulting and coin grading(?) services. But if any dealers used its vaulting services, well, the vault from what I hear no longer exists.

Numisdirect is the carbon copy of Bullion Direct, used for coins, and barely does any business.

Nucleo Staffing appears to be a company that was used to hire employees for Nucleo.

I believe that they are all known by the people running the bankruptcy.

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