Over the years I have preached to collectors and investors just like you, to be careful not to give their rare coins and or precious metals to ANY dealer or broker for storage.
Having literally grown up and in the rare coin and precious metals market, I have seen virtually every scam and convenient bankruptcy possible. Among the most expensive have been the collapses of so called “independently audited” storage facilities as well as brokers and dealers that issue “certificates of precious metals deposits”.
In my opinion, if you don’t take physical possession, you’re setting yourself to be robbed. Always take physical possession, rent a safety deposit box and store your precious metals and rare coins on your own. The cost of insurance for even a great deal of value is very inexpensive.
Besides storage risk, there’s a growing risk of being scammed in the rare coin and precious metals business that you must not ignore. This rising threat is not only putting investor/collectors like you at risk, but this scam has also put professional dealers with decades of experience at risk.
When you sell your rare coins and precious metals, Make Sure You Get Paid.
When you buy rare coins and precious metals, Make sure you get immediate delivery.
Over the past two years I have seen a substantial uptick in the number of investors, collectors and even dealers complaining about not being paid or not receiving possession of rare coins and precious metals for which they paid.
Those not paying or not delivering have a few things in common.
First, the firms and individuals doing this – do it repeatedly. Rarely is it ever a one-time aberration. One firm, CT Group of Irvine, CA, has had a great many private investors/collector and dealers complaining about non-payment and clients who have been complaining about non-delivery and non-payment over the past year and through today.
The principal owner of CT Group, Todd Griffiths, called me about a week ago to tell me that he has been trying to pay clients he owes money.
One of these clients he’s been trying to satisfy received two checks for over $300K from him -- they were returned NSF.
As you might expect, Mr. Griffiths was recently arrested (March 6, 2013) as a result of these two NSF checks and the matter is now pending in a Texas criminal court. Griffiths asserts that he has enough money to make the checks good. The problem is the client also has a separate civil suit for $1.3 million now pending in a U.S. Federal Court in Texas for coins he claims are missing that were being stored by CT Group. While I have no dog in this hunt, I suspect that the client wants the $1.3 million and the $300K+ made good at this point.
Ironically, Mr. Griffiths who finds himself and his firm in one of the worst of situations actually managed to make me laugh when we spoke last week. According to Mr. Griffiths, he hired another rare coin dealer (Bob Hughes) who owes his firm $500,000 for coins, the dealer owes CT Group.
Griffiths told me that he hired Bob Hughes to work for CT Group saying… “How else can I get the money he owes?” (I am not kidding. You can’t make this up.)
It is bad enough that Griffiths and his CT Group have managed to fall into a non-payment for rare coins delivered trap. But there is a kicker….
Bob Hughes also owes a few other dealers, including one major dealer approximately $900,000 in rare coins and another dealer approximately $1 million.
Where did the millions of dollars vanish to?
I have no idea; but I can tell you the dealers caught without the money or rare coins thanks to Mr. Hughes did business with him knowing he has one of the most notorious histories in the rare coin and precious metals business. In the last 30 years I have purchased very few rare coins from him because I am always worried about the potential consequences.
Todd Griffiths insists that if I and others back off of him and CT Group, he will be able to pay everyone the money they are owed. “I just need 30 days”. 30 days would be a miracle; I hope he is successful.
But your guess is as good as mine as to whether he pays everyone he owes. All I can say is that there’s a disturbing pattern in that a great many of the collectors/investors he owes are elderly.
What I do know for sure is when it comes time to buy or sell rare coins or precious metals, there are a few very important rules to follow regardless of whether you’re a dealer, collector or investor.
Buying and Selling Rule #1: Always get paid immediately when selling rare coins.
Buying and Selling Rule #2: When buying rare coins always take possession immediately.
Never accept a post-dated check. Make sure the terms of sale are immediate. If possible, get paid when selling by bank wire. Many dealers like myself, can and do arrange payment by wire. If a dealer asks you deposit a check in a few days so he can transfer funds, fine but do NOT get strung out. Terms of sale = immediate payment or delivery.
Buying and Selling Rule #3: Steer clear of Federal Express and private delivery mail services when sending a dealer coins or bullion to sell.
If you use a private delivery service like Federal Express or UPS and the dealer or broker decides not to pay you, it may be impossible to collect even if the dealer is nothing more than a scam artist.
Please use the U.S. Post office only. Send all coins and bullion registered insured and restricted delivery to the principal owner of the firm.
If the customer missing coins and looking for payment has shipped their coins or made payment via the United States Post Office, the individuals walking away with the coins and bullion would be facing one of the most powerful law enforcement agencies in the world. Take it from someone who has worked with the Post Office over the years. There’s no one tougher on mail and wire fraud than a U.S. Postal Inspector.
Yet, United States Postal Inspectors cannot help you recover anything if you’re defrauded by a crook through private shipping companies like Federal Express.
Victims, including dealers, private collectors and investors who don’t use the US Post Office most often find other law enforcement agencies completely disinterested in helping them. They also find that suing costs a fortune and just throw in the towel.
Buy and Selling Rule #4: Insist on either personal delivery or U.S. Post Office registered insured and restricted delivery when buying.
This way your coins are insured for their full value and the restricted delivery means only you can sign for the coins.
Quite often I deliver expensive rare coins in person, right to my clients at his or her bank. I like to develop a long term relationship with my clients. Over the years I have discovered the better a client knows me, the better the client they become.
I love rare coins and believe they believe they should be a significant part of your investment portfolio. In addition, about 15% of your net worth should be invested in precious metals right now.
Buy and Selling Rule #5: Work with a dealer that has a deep knowledge of U.S., World and Ancient coins.
A dealer that really has a broad knowledge of rare coins will likely pay you a stronger price when you decide to sell. I have bought, sold and handled hundreds of millions of dollars of rare coins and precious metals.
My broad knowledge of the market means that if you’re looking for a rare coin dealer in Chicago, Boston, Los Angeles, New York, Boston, Baltimore, Philadelphia, Dallas, Kansas City or even Minneapolis, keep in mind I visit these cities several times a year. I am always willing to meet a new collector/investor or come personally to look at a collection if the size merits.
Buying and Selling Rule #6: Get the dealers personal cell number and insist that they pick up your call right away or call you back promptly.
I always give clients my mobile phone number. I always call back promptly. My firm has an A+ rating with the Better Business Bureau and has thousands and thousands of positive comments and ratings on EBay.
Buying and Selling Rule #7: When it comes time to buy or sell rare coins or precious metals, there are no free lunches or opportunities to double, triple or quadruple your money in a matter of weeks or months,
A frustrated lawyer trying to protect one of his wealthier clients confided in me saying his client was pitched right in front of him that he could turn $2.8 million into $8 million in just 30 days.
“I lost it when I heard that promise”
“I told my client this is insane.”
I asked him… “How can you believe such nonsense?”
“Despite every warning I could provide my client I couldn’t persuade him, he was being set up for a terrible loss.”
There are no free lunches in the rare coins and precious metals market.
Fantastic promises of huge profits in short periods of time are the stuff of fantasy and delusion. Such predictions are providence of scam artists, not professional numismatists.
If you want me to help you build a US, World or even ancient rare coin collection or help you buy precious metals, you’ll find I will educate you every step of the way.
Bottom line: The more you know the more likely you’ll work with me for years even decades.
I can’t control the precious metals or rare coin market, but I can guarantee you’ll always get paid in full quickly when you sell and I will quickly deliver any rare coin or precious metals purchased promptly without hassle.
To my fellow dealers…
I may not always be the high buy or the low sell but if you do business with me you will never have to worry if my check will clear, or if the coins I’ve sold you belong to someone else. If you’re not doing business with us, please accept this as an invitation. I am an active buyer and seller of high quality U.S. rare coins, Ancients and many world coins.