KITCO fraud allegation.

http://www.zerohedge.com/article/kitco-charged-massive-tax-fraud-scheme-business-viability-question

What do you think?

 

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You cannot deal with money and expect virtue and ethics to be in constant control.

 

It is still only a allegation, but it does not look good. I for one, will really miss those pretty charts.

 

I guess now one will find out if the "pool accounts" are really in customers names, or still in company name to loan out when PM were hot.

 

This could get interesting.

 

I think you have to look for virtue, expect it, demand it, and severely punish violations. When I watched the NASDAQ meltdown in 2000 and the banker bailouts more recently, and nobody went to prison, it became apparent that the criminals were now in control and any investment plan had to be conducted with the expectation that markets and market players were most likely dishonest.

 

I wasn't to sure what to make of a post by an author named
"Tyler Durden", so I went and found a few articles by other people who didn't use pseudonyms. From what I have read it looks like AT WORST, there were a few people at KITCO issueing falsified invoices so that the people they buy junk gold and silver from, could get a little bonus. In Canada pure gold and silver coins (i'm not to sure about jewelry) are tax exempt. Which means that if kitco paid taxes to the suppliers they have to submit that info to the government for reimbursment. It is then up to the individual suppliers to claim that on their taxes and repay the government what the government paid kitco. My guess is Kitco will be absolved of any wrong doing and these people will be charged with fraud.

 

It's a little bit more complicated, and quite devious if the allegations are true:

According to Revenue Quebec, suppliers and refiners were buying and selling gold amongst themselves, converting it from pure (not taxable) to scrap (and back again), and claiming tax refunds on unpaid taxes.

http://www.theglobeandmail.com/repo...osshairs-of-quebec-tax-agency/article2055402/

 

Kitco was running a gold and silver ponzi scheme according to our friend Bix Weir.

 

Harvey Organ has a good summary on his blog. It has to do with the fact that sales of pure gold in Canada don't have taxation where scrap gold does.

According to him, the pool accounts are unallocated gold and thus, subject to attachment by Canada as payment for money owed to the state. (backtaxes & fines) The country of Canada gets the gold you get the paper contract. If it were me, I would be looking at liquidating my account as soon as possible. Hopefully if you had one of these, you can get your cash back.

I would think that at this point it really doesn't matter if they are guilty or not.

 

My take is that for one Canada is more heavy-handed on tax matters than the U.S.; such a problem would never happen with the scrupulous Apmex, or other large PM company.

How many years have the "Cash for Gold" scammers been operation with out pre-dawn raids happening?

Other country's tax authorities are watching the action against the giant Kitco. It isn't that they can't do the same thing, they just don't want to have a raid and seizure thrown out of court--the U.S. is the country with the most legal rights for such businesses in the world, if you can afford the lawyers.

 

I encountered a questionable business practise last week up here in Canada when I ordered, online, 100 Silver Maple Leaf bullion coins from what I thought was a reputable company, only to receive an invoice with a 13% tax applied to the total.
The problem is bullion coins and bars are non-taxable.
I never did receive a proper invoice.

 

As a Canadian resident,I would say this company was conducting this kind of business in here because they knew our laws are very lax and the chance of anyone ever going to prison is very small or not at all.
It's the U.S. authorities they will have to worry about.

 

Just to be fair.
https://corp.kitco.com/EN/Kitco_Revenu_Quebec_PRESS_RELEASE_20110609.pdf

 

Did he offer any evidence?

 

Thanks for the info.

 

Sure... Bix always does. Like Jim said (see post #4 above), it's something about Pooled Metal Investment accounts, which boils down to the simple fact that since everyone doesn't cash out their gold & silver "paper" at the same time, you could sell both allocated and unallocated pooled account certificates without buying the actual metal and invest the cash in interest bearing accounts. Of course, this is just his theory ... I have no idea if it's true, but I assume that's why Kitco is being investigated.

 

I thought the investigation was a tax thing?

 

Bix said:

There will be a lot more of this as the veil comes off the metal market rigging operations. Kitco was running a gold and silver ponzi scheme that was started by none other than the infamous Jon Nadler.



Nadler was the inventor and promoter of the Pooled Metal Investment accounts. He started this at Bank of America then implemented it at the Perth Mint, Kitco and the Royal Bank of Canada. The idea was that since everyone doesn't cash in their gold and silver certificates at the same time you could sell allocated and unallocated pooled account certificates without buying the actual metal. You then take that money and invest it in some other interest baring account and you get the interest gains.
" ~ Bix Weir

Where there is smoke there's fire.

I wouldn't want to be a customer of Kitco with this cloud hanging over their head.

 

Yes it was. The point being that if Canada resorts to seizing Kitco assets to pay the back taxes and fines, then Kitco's unallocated gold will be the first to go. They might also seize the gold as evidence as the US did with the Norfed Liberty dollars. Even worse, if people holding these accounts assume they might lose their investment and start liquidating then there might not be enough gold anyway.

In other words, the Kitco pool accounts become worthless in this scenario. If you have one of these, you might seriously consider your options.

This is why they say, "if you don't hold it, you don't own it".