ConsumerWatch: Traveling Gold Buying Operation Under Scrutiny
SANTA CRUZ (CBS 5) — The tight economy is forcing a lot of people to sell their family heirlooms, especially their gold. But one of the largest operations, setting up shop at hotels across the country, is being accused of fraud.
The operations go under different names such as “Ohio Valley Gold and Silver Refinery” or “Treasure Hunters Roadshow.”
Marlene Powell and her friend Karin Engel were curious when they spotted the ad. “It said as seen on TV, and with the words ‘road show,’” Powell said.
They thought it was the “Antiques Roadshow,” a common misconception that led to the company being sued for trademark violations. The women felt deceived again when they went to the event at a local Hampton Inn.
“I had a piece of 18 karat gold that I know for a fact was 18 karat and they told me, ‘No it wasn’t,’” said Powell.
They believe they were taken for hundreds of dollars and they’re not alone. CBS 5 compiled complaints from across the country, mostly from seniors. They include a 71-year-old in West Virginia and an 88-year-old on the Canadian border. Both are grandmothers desperate for cash, selling family heirlooms for pennies on the dollar.
After jeweler Tom Broadwin heard similar complaints from his customers, he decided to visit the same roadshow, traveling under yet another name, this time Premiere Estate Buyers.
“I had a gold bracelet filled with coins, unmistakably gold coins,” said Broadwin. “The individual looked at it for a few minutes and told me they were plated. That was fraud right to my face.”
Broadwin agreed to lend CBS 5 $8,000 worth of gold for our investigation. Before handing it over, he tested each piece for karat count and weight. We took the gold to three separate jewelers to confirm its value. Then the gold was brought to a show in Santa Cruz.
We knew 13 out of the 15 pieces were 18 karat gold. But after carefully examining each item, a road show manager said: “I’ve got some 10 and 14 karat, a mix. Believe it or not half of what you have on the table here is copper.”
Maybe he missed the 18k stamp, and that acid test was wrong. Was it an isolated experience? CBS 5 decided to find out.
So we sent our gold to CBS stations across the country, asking teams in Sacramento, Boston, Philadelphia, Chicago and Dallas to go undercover.
In two cities, they got the karats right. But at two other shows, CBS producers were told 18 karat pieces were only 14 karats. And three out of the five initial offers we received were less than a quarter of the gold’s value.
After weeks of undercover investigations, CBS 5 traveled to the THR corporate headquarters in Springfield, Illinois.
“We are not in the business of lying to people,” Spokesperson Matthew Enright said.
It turns out the company operates 120 traveling shows a week under at least 8 different names. First, Enright examined our gold and confirmed it was 18 karats. Then we showed him our undercover video, in which a salesman tells us one of the 18 karat pieces is only 10 karats.
CBS 5 asked Enright: “There’s a bit of a trend here. Either he doesn’t have a cursory knowledge of gold, or he’s lying to customers.”
His response: “Sure. I mean it’s obviously a concern for me seeing that.”
CBS 5 questioned why it had happened on multiple occasions. He said, “Well it’s a very small percentage compared to 140 managers that we have.”
He said employees are not “trained” to purposely deceive customers. But CBS 5 obtained a THR buying guide which shows employees are “trained” to make a first offer of $1.50 per pennyweight.
The going rate is more than 30 times that.
“Isn’t that excessive?” CBS 5 asked him.
Enright responded: “Ah you know…it’s absolutely legal.”
When asked, “So the question is, do you feel guilty?” Enright said, “I’m not the one out there buying and doing those types of things.”
But “those types of things” have been great for business. The company brought in $300 million last year.
But there are signs of trouble. Two weeks into our investigation, the company’s checks stopped clearing. “The most recent number was 4,000,” said Enright.
It turns out PNC Bank closed THR’s account. The company is now scrambling to make amends, re-issuing checks out of a new account. “It’s an unfortunate situation. I have no idea why it was closed,” said Enright.
The company’s CEO Jeffrey Parsons owes the IRS more than $3 million. And according to court documents, he may have used the company bank account as his personal piggy bank. His current country club residence and the company’s Cessna at least in part paid for with silver coins.
“He did buy a jet and a house with silver?” CBS 5 asked Enright. “Sure,” he confirmed.
CBS 5 then asked, “Do you think the bank unexpectedly closing your account has anything to do with Mr. Parsons using company funds for extravagant personal expenses?”
His response: “Hmmm. I don’t know. It’s a great question, I don’t know.”
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