Executives of California-based gold dealer Goldline are headed to Capitol Hill Thursday to testify in hearings regarding the Glenn Beck-backer's allegedly controversial business practices.
The hearings, called by Rep. Anthony Weiner (D-N.Y.) in July after earlier commissioning a critical report on the company, will focus on the precious metal dealer's supposed practice of aggressively pushing its customers to purchase highly inflated, less precious gold coins over standard gold bullion, as well as one of the primary justifications behind the company's business model -- that the government may, at some point, seize the personal gold stashes of its citizens.
As Mother Jones reports:
To make the upsale to the overpriced coins, the company preys on people's fears about the economy. Goldline's sales staff suggests numismatic coins were exempt from confiscation in 1933, when Franklin D. Roosevelt issued an executive order making private gold ownership illegal--ergo, when Obama comes for your gold, the government won't be able to take your Swiss francs. It's an utterly ridiculous idea on its face. Nonetheless, Goldline includes in its standard "investor kit" a copy of the 1933 executive order that ended the gold standard in the US. The order exempted certain types of gold from the anti-hoarding provisions, including "gold coins having a recognized special value to collectors of rare and unusual coins." Goldline claims its 20-franc coins and other semi-rare offerings meet this standard.
Also potentially in question at the hearings, ABC News reports, are three of the company's sales associates whose pasts are marked with duplicity.
According to the ABC News investigation, Paul Land, Charles Boratgis and Morrey Wasserman were the focus of a 1990s SEC case:
[They] were taken to court in the 1990s by the Securities Exchange Commission on allegations that they used deceptive mass mailings and what are sometimes called 'boiler room' tactics to defraud 115 mostly elderly investors out of $1,180,000 over 13 months, according to court records. The scheme allegedly involved selling shares in a 1-900 telephone line. Investors were allegedly promised 24 percent returns after a four-month period or a 203 percent return after a sixteen-month period -- estimates the SEC called highly misleading and false, the court papers say.
In response to the latest wave of criticism, Goldline has made moves to expand its presence on Capitol Hill, contracting the help of what Politico describes as "a top K Street lobbying firm and the pricey Washington P.R. shop that helped Big Tobacco deflect Congressional scrutiny of cigarette ingredients in the mid-1990s" in the lead-up to their day in front of Congress.
These are moves that Goldline can apparently afford to take, as a Los Angeles Times article recently reported that the company is set to increase its revenue to $1 billion over the next year.
Watch ABC News's report on Goldline: