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Rare Coin Market Update

Rare Coin Market Update #22 (Archives)

First State Depository, its owner, and his rare coin and precious metals firms' hammered by court decision.
Again this is why I keep BEGGING investors when buying physical gold and precious metals to TAKE POSSESSION!

by James DiGeorgia 2013-07-18 13:02:53

 

On March 21, 2011 I warned my readers about First State Depository Co., Certified Asset Management, INC (CAMI) and its owner Bob Higgins.

During a visit to both businesses and its owner, and after speaking with several former and then current employees, as well as several rare coin and precious metals dealers with knowledge of both of businesses, I was alerted to some serious problems.

My concerns prompted me to do a deeper investigation and to confront Bob Higgins the principle owner of both firms.

First, I asked Mr. Higgins about his reputation as a slow pay and bounced checks on fellow dealers and vendors.

I discovered his real financial condition almost immediately when I tried to collect the paltry sum Bob promised me before visiting him in Delaware. The cost of my one day visit was just $660. After several attempts of being reimbursed I was finally paid... only after sending him my March 21, 2011 article for his comments (he had no comments).

Second, after visiting I wrote him via email that I was very concerned that his depository was being run by one or more of his sons and pointed out that I believed this nepotism was a mistake and that if anything bad happened with the depository, his son(s) would be at risk of civil and potential criminal liability.

I suggested to Mr. Higgins that he should hire a retired FBI agent holding a CPA license to run First State Depository Co. which would keep the depository at arm's length from his rare coin firm and anyone connected with his family from even the appearance of impropriety.

Third, current employees at the time as well as former employees began revealing that Mr. Higgins' rare coin firm (Certified Assets) was frequently bouncing checks and that some clients were not receiving the rare coins or precious metals they purchased. This wasn't a case of a delay of a few days or weeks, but a situation that was becoming a matter of at least a year of non delivery.

The more I learned about Mr. Higgins, the more alarmed I became. I ordered my staff... NEVER do business with Mr. Higgins or his firms -- absolutely NEVER.

It was and still is my belief that anyone doing business with Mr. Higgins or his firm Certified Assets could get caught up in a bankruptcy and possibly a financial scandal.

One of the clients to whom Mr. Higgins' rare coin firm owed and still owes an enormous six figure amount lodged a complaint for arbitration in 2011 with the Professional Numismatic Guild (PNG). The arbitration was postponed because one of the true heroes in the rare coin industry managed to negotiate a repayment schedule for the client with Mr. Higgins. This resulted in the PNG arbitration hearing being postponed. Soon after the hearing was postponed Mr. Higgins chose to suspend his membership in PNG.

A genuine industry leader did help the situation and the past two years, Mr. Higgins rare coin firm (though staggered and slow) has reduced the amount of the debt to less than half of the original amount. Higgins firm still owes this client (a man in his mid 80s and disabled) well into the six figures, according to my sources including the client’s council. (More on this client’s woes with rare coin and precious metals dealers and his $7 million civil suit against STILL another dealer in upcoming updates and warnibngs to investors and collectors.)

I stayed completely away from Mr. Higgins and his rare coin firm, but watched with great concern as I heard through the rare coin and precious metals industry grapevine that checks were still bounced from time to time and payments were being delayed to both private clients and dealers.

At the Chicago American Numismatic Convention in the summer of 2012, an annual rare coin show, one of my employees was approached by Mr. Higgins in an attempt to open the door to do business asserting that…

"James has me all wrong. I'm a giver not a taker".

My response was then and now remains BALONEY! I just don't believe anything Mr. Higgins says. I believe he is a con man and must be avoided.

A little longer than a month after my article, on February 15, 2012, Bloomberg Business news reported that the Israel Discount Bank (IDB) filed suit against First State Depository Co over a "$17 Million Coin Cache".

The Israel Discount Bank of New York sued Delaware's First State Depository Co. and is asking a judge to preserve a $17 million collection including rare gold and silver coins being held as collateral for loans.

The lawsuit filed on Feb 13, 2011 alleged the Wilmington depository has been transferring the coins in violation of an agreement with the bank, a unit of Tel Aviv-based Israel Discount Bank Ltd.

"In addition, IDB discovered that the defendants are marketing for sale and are attempting to sell" some of the assets without permission, according to the court papers filed.

The bank asked the presiding Judge to freeze the assets still in Delaware, forbid coin transfers and enforce its right to inspect the deposits.

Included in the cache, the bank asserted, were more than 12,000 rare presidential or Sacagawea dollar coins with missing edge markings; other collector-quality gold and silver coins; and bullion, according to court papers.

Keep in mind that First State Depository Co. also THEN and STILL stores gold and silver IRAs for investors.

After more than 2 years on June 4, 2013 Delaware Chancery Court Judge Donald F. Parsons Jr. issued his decision.

http://courts.delaware.gov/opinions/download.aspx?ID=189930

(Please give this link time to load. It takes 30-60 seconds and see arrow at bottom to see entire decision)

It now stands as one of most aggressive civil decisions ever issued in a rare coin and precious metals industry and I believe it to be an outright example of how a jurist in this country makes a criminal referral via a court decision in a civil case. The decision not only upheld fines on Mr. Higgins et al for deliberately ignoring the Judges orders but hit him and his firms named in the suit but also ordered him to pay the plaintiff’s reasonable legal expenses.    

Higgins and his firm are appealing the decision but in my opinion any appeal will fail. The facts of this case paint in my mind paint a picture so egregious that law enforcement to immediately take steps to close both business and investigate Higgins’ and his new business Certified Asset Management International that is using the same CAMI initials and same EXACT domain. 

On March 21, 2011 I warned investors…

“If you're doing business with First State Depository Co, Certified Assets or Mr. Robert Higgins, the principal of these firms, I believe you should cease and desist and IMMEDIATELY get any rare coins, coins, monies and or precious metals back into your possession that he and or his firms may be holding for you.”

I've a professional in rare coin and precious metals business since I was 16, I am now 54) have seen depositories collapse into bankruptcy as well as many precious metals and rare coin firms. As the editor of the fiercely independent Silver & Gold Report published by Weiss Research from 1992 to 1997, I exposed scam after scam and warned about companies that later collapsed and saw their principals go to jail.

Bad firms hurt the rare coin and precious metals markets and harm the investor and collector community. When companies collapse and are holding private investor assets: Investors often wind up with pennies on the dollar if they are lucky.

It's not personal. I think it's an obligation as a member of the precious metals and rare coin industry for over 38 years to warn the public when there is smoke. The smoke is thick in my opinion.

I believe, anyone thinking of investing in Mr. Higgins firm or depositing precious metals in his depository should do their due diligence.  Read the Chancellors decision (above).

Bob Higgins, Certified Assets Management Inc. Certified Assets International Inc, both referred to by Mr. Higgins as CAMI and both having used the same domain as well as his First State Depository Co. should be avoided.

The Chancellors decision says it all. Mr. Higgins is entitled to an appeal; our wonderful country’s laws give him that right. He cannot however out run the truth. Most importantly his actions and businesses actions reinforce my warning. When buying precious metals, TAKE POSSESSION!

Please do not store precious metals or rare coins with a dealer or broker.  If you’re looking to store precious metals I know of just one place in the United States that makes sense. If you want to know which company I recommend please give our office a call and ask to speak with my brother in law and Chief of my wholesale division Jay London. He’ll take your name, address, email and phone number and then direct you to the only depository I recommend.