This week, prosecutors in Santa Monica, Calif., charged Goldline International with 19 criminal counts of theft and fraud, saying the prominent gold purveyor "runs a bait and switch operation in which customers, seeking to invest in gold bullion, are switched to highly overpriced coins by using false and misleading claims." Goldline — a pioneer in weaving its buy-gold message into the broadcasts of Glenn Beck and other conservative talkers — called the charges "preposterous" and vowed to fight them. Who (metaphorically) profits from Goldline's prosecution, and who's taking a loss?
Yes, "the price of gold is trending upwards," says Myrddin at AmericaBlog. But "almost no Goldline customers have seen a profit on their 'investment' yet." That's due to Goldline's alleged fraud, but also because the shiny yellow metal isn't an investment, it's "pure speculation." Maybe it will go up, "or it may collapse as the various stashes built up by [Libyan Moammar] Gadhafi and his henchmen are discovered and quietly liquidated." But this bust is a good reminder that "people create wealth, machinery creates wealth, corporations create wealth — gold creates nothing."
Goldline's legal troubles are "an unusual victory for someone who hasn't had many wins lately: Former New York Rep. Anthony Weiner," says Stephanie Mencimer at Mother Jones. Before his sexy-Tweet-fueled downfall, Weiner made headlines as a consumer champion who tried to "rein in sleazy gold dealers," including Goldline. That sparked a very public feud with Beck, who taunted Weiner for "lying about Goldline." Now Beck has lost his Fox News gig, and his "favorite gold executives... could be facing some jail time for doing exactly what Weiner said they were doing."
Even before Weiner was on the case, ABC's Good Morning America was "dogging" Goldline about its shady sales practices, says Nando Di Fino at Mediaite. For good reason, "Brian Ross and the entire staff of Good Morning America were dancing for joy Wednesday morning (at least on the inside)," after the criminal charges were filed.
Glenn Beck and Co.
Beck isn't just a prominent pitchman for Goldline. He's truly put his reputation on the line for them, saying in ads that Goldine is "a top-notch organization" and the "only gold company I recommend and use." But Beck isn't the only one with egg on his face, says Alex Seitz-Wald at ThinkProgress. Fellow right-wing talkers "Sean Hannity, Laura Ingraham, and Mark Levin, former GOP presidential candidates Mike Huckabee and Fred Thompson, and several Fox News hosts, among others, have all endorsed the company," and Goldline bragged of the "credibility" their names imbued. Oops.
Weiner's easily dismissed "attacks in 2010 might have been uncomfortable for Goldline at the time," says CoinWeek, but the "criminal complaint is a whole other matter." Six Goldline executives and salespeople, including former CEO Mark Albarian and his replacement, Scott Carter, face "serious charges," each carrying up to a year in jail plus a $10,000 fine.
Goldline coin buyers
"The most important thing is to remember that real people — often people who respected and trusted Beck and other well-known endorsers — were the ones who got fleeced in this scam," says Will Bunch in the Philadelphia Daily News. Take Joe Kismartin, 63, who says a salesman "more or less talked me into buying" coins when what he really wanted was bullion. When Kismartin got his $5,000 worth of Goldline coins appraised, they were worth $2,900. "I'm living month to month," Kismartin told ABC News. So "that's a big loss."