Execs at Precious Metals Firm Charged with Fraud

Ablestock.com/Thinkstock(SANTA MONICA, Calif.) -- Goldline, a company that used endorsements from Glenn Beck and other conservative icons to sell hundreds of millions of dollars in gold to consumers, has been charged with theft and fraud in a 19-count criminal complaint filed Tuesday by local officials in California.

The criminal complaint filed Tuesday by the Santa Monica City Attorney's consumer protection unit marks the latest in a series of allegations it has leveled against the gold dealer, which pioneered the practice of weaving its sales pitches into broadcasts by popular conservative political personalities -- including two former presidential candidates -- to sell hundreds of millions of dollars' worth of gold every year.

The complaint alleges that Goldline "runs a bait and switch operation in which customers, seeking to invest in gold bullion, are switched to highly overpriced coins by using false and misleading claims," according to a statement released by the consumer affairs division of the Santa Monica City Attorney's office.

The company has been charged in the court filing with misdemeanors that include theft by false pretenses, false advertising and conspiracy, the city attorney's office said. In addition to the charges against the company, the complaint accuses former CEO Mark Albarian, executives Robert Fazio and Luis Beeli, and salespeople Charles Boratgis and Stephanie Howard of defrauding customers. Current CEO Scott Carter is accused of making false or misleading statements. Each of the charged offenses carries a maximum penalty of one year in jail and maximum fines of between $1,000 and $10,000 per offense.

Carter, who is frequently featured in Goldline commercials, told ABC News Tuesday that he was withholding comment until he has had time to review the court filing.

The launch of an investigation into Goldline was first reported by ABC News more than a year ago, when Santa Monica officials first said they were looking into allegations they said were leveled against the company by unhappy customers.

"There are two main types of complaints we're seeing," Adam Radinsky of the Santa Monica City Attorney's office said at the time. "One is that customers say that they were lied to and misled in entering into their purchases of gold coins. And the other group is saying that they received something different from what they had ordered."

Goldline officials said at the time that customer complaints were infrequent and that it responded immediately to address them. The proof of the company's commitment to customer satisfaction, they said, is Goldline's top rating from the Better Business Bureau. "When we learn that customers have not received the experience they deserve, we investigate and take action," said Carter, then Goldline's executive vice president, in a letter to ABC News sent last year.

The criminal complaint lays out a series of allegations that it contends add up to a conspiracy to trick customers into overpaying for an investment in gold.

For instance, the complaint alleges that the company trains salespeople to "get the money in" from customers on the promise of delivering gold bullion, with the intent to later switch the sale to far more overpriced collectable gold coins. It alleges that the company trains its employees "to disguise the more than 50 percent markup on the overpriced coins," and alleges that Goldline reprimands its salespeople if they fail to convince the customer to buy the overpriced coins.

At the heart of the complaint is the suggestion that Goldline profits not so much by selling pure gold bullion, but by persuading customers who want to capitalize on the rising value of gold to purchase collectable coins. The coins are subject to a significant mark-up in price, and several Goldline customers told ABC News that they found it difficult or impossible to resell those coins without taking a loss.

One of the customers was 63-year-old Joe Kismartin of suburban Detroit. He says what he heard on TV about gold and the Goldline company made a lot of sense.

"They got the commercials on TV and the way the economy's going I was figuring well, maybe I'll just do it for a little bit, save it for inflation, you know, in case something happens to the economy, it bottoms out and I've got something to fall back on, gold, rather than money," he said.

But Kismartin says he ended up losing almost half of the $5,000 he spent, because, he says, the Goldline salesman pressured him to buy overpriced gold coins, not the gold bullion he had seen in the commercials.

"I wanted to go bullion, I didn't want coins," he said. "I told the gentleman I don't want coins. He said I got the deal here, the special deal, I got Swiss coins. He more or less talked me into buying the coins."

When Kismartin took the coins to a local coin shop, he was told the $5,000 worth of gold coins he bought from Goldline five months earlier was worth just over $2,900, a loss of $2,100. "You know, I'm living month to month, that's a big loss."

Goldline disputes Kismartin's allegations against the company, saying it sells "a variety of products ranging from the most common bullion coins to exceptionally rare certified coins." Goldline said it looked into each case ABC News reported on last year and found that while both customers had initially complained, the company believed they wound up satisfied. And one of them -- Goldline did not identify which one -- was provided "a number of written disclosures at the time of purchase that went even further than Goldline's ordinary written disclosures," and yet went ahead with the purchase anyway.

In filing the complaint, officials have opened a new front in a long-running and very public dispute over the way Goldline has turned the sale of gold into a massive retail operation that capitalizes on popular conservative figures -- most notably Glenn Beck. The marriage of conservative talk and gold sales appears to make sense -- both have traditionally targeted an audience that is skeptical of the government, concerned about the nation's economic future, and uneasy about inflation and the stability of American currency. Neither Beck nor any of the other celebrity endorsers are accused of any wrongdoing.

The promotional strategy appears to have been beneficial both to Goldline, which boasts $500 million in sales, and to such conservative figures as Beck and former presidential hopefuls Fred Thompson and Mike Huckabee, all of whom have, at various times, coupled their television or radio appearances with Goldline advertisements.

When contacted last year, a spokesman for Beck noted that Goldline has an A plus rating from the Better Business Bureau.

Copyright 2011 ABC News Radio

Immigrant Creates US Jobs, Gets Boot over Visa

iStockphoto/Thinkstock(NEW YORK) -- Last year, Amit Aharoni, an Israeli national and a graduate of Stanford Business School, secured $1.65 million in venture capital funding with two co-founders to launch CruiseWise.com, an online cruise booking company.

Business Insider ranked the company, which is set to launch its website in just a few weeks, one of the "20 Hot Silicon Valley Startups You Need to Watch," and Aharoni has already hired nine Americans.

But this story of entrepreneurship and job creation is hitting rough waters because Aharoni is not American. On Oct. 4, Aharoni received a letter from U.S. Citizenship and Immigration Services denying his request for a visa and notifying him that he needed to leave the country immediately.

The government said Aharoni's job as CEO does not require someone with his high-level degree, even though he created the company.

"[The] letter is practically humiliating. It says you have to leave the country, as if I committed a crime of some sort by creating nine jobs," Aharoni said.

Immediately after receiving the letter denying his visa application, Aharoni left for Vancouver, where he now tries to guide his company from a friend's living room. He says he believes his San Francisco-headquartered business could create hundreds of jobs in the next five years, a plan that is now in jeopardy.

"I fear that I will be forced to move the center of gravity of CruiseWise to a different place where I can rely on sensible immigration policy," Aharoni told ABC News. "And that would mean that the hundreds of jobs that we'd hope to create would not be created in the U.S. but somewhere else."

A USCIS spokeswoman said the agency is "working to streamline" the visa process for immigrant entrepreneurs.

Steve Davis, CruiseWise's chief of operations, told ABC News that the USCIS's decision is incomprehensible to him.

"Amit has brought together a million and a half dollars of investment, almost two-thirds of that from outside the U.S., and invested it right here in the United States," Davis said. "[He] created nine new jobs and then at the end of this process was told that he needed to the leave the country."

While the United States forced Aharoni out, there are other countries that are eager to have entrepreneurs, enticing them with special visas and funding. According to Partnership for a New American Economy, an organization that advocates "the economic benefits of sensible immigration reform," countries including the United Kingdom, Singapore and Chile have visas for entrepreneurs. Chile even has a program that offers $40,000 in seed funding.

It is a problem politicians in America acknowledge but have not solved.

According to statistics from Partnership for a New American Economy, 40 percent of Fortune 500 companies were founded by immigrants or their children.

President Obama addressed the issue during a town hall in July.

"What I want to do is make sure that talented people who come to this country to study, to get degrees, and are in -- willing and interested in starting up businesses, can do so, as opposed to going back home and starting those businesses over there to compete against the United States and take away U.S. jobs," he said.

In a May op-ed in The Wall Street Journal titled "A New Immigration Consensus," New York City Mayor Michael Bloomberg advocated for reform.

"When every other country wants the best and the brightest, we're trying to keep them out. It doesn't make a lot of sense. ... [T]he truth of the matter is we are sending the future overseas," Bloomberg told ABC News Tuesday. "We need people to start companies and create jobs. People that come from overseas are something like ... five times more likely to create jobs than people who are here....So we've got to do something about this."

Senators Mark Udall, D-Colo., John Kerry, D-Mass., and Richard Lugar, R-Ind., are taking action, reintroducing the "StartUp Visa Act," a bill they originally proposed two years ago. The act would allow "immigrant entrepreneurs and foreign graduates from U.S. universities to appeal for a two-year visa on the condition that they secure financing from a qualified U.S. investor and can demonstrate the ability to create American jobs."

America has a long history of immigrant entrepreneurs. John Nordstrom immigrated to the United States at the age of 16 and eventually founded Nordstrom's. The cofounders of Pfizer, Charles Pfizer and Charles Ernhard, moved from Germany as adults to start the pharmaceutical giant. And Andy Grove, cofounder of Intel, came to the United States at the age of 20 after escaping communist Hungary.

From 1995 to 2005 immigrants helped found a quarter of all high-tech companies in America, creating 450,000 jobs, according to Partnership for a New American Economy.

Aharoni hopes he can create the next great U.S. company, but for now he waits, running his business from 900 miles away, wishing he could resume his American dream.

Copyright 2011 ABC News Radio

US Markets Endure Roller-Coaster Ride Amid European Uncertainty

Hemera/Thinkstock(NEW YORK) -- Events happening half a world away has done a number on the U.S. markets -- proof that we live in a global economy.
 
At the opening bell Tuesday, stocks took a nosedive on reports that the government of Greece would let citizens vote on a plan to rescue that nation's economy.  Stocks stayed down for the entire session. Analysts in the U.S. say the uncertainty for Europe could keep the markets on a roller-coaster ride for a while.

On Tuesday, the Dow closed down 297 points. The Nasdaq gave up 77, and the S&P lost 35.
 
Meanwhile, the U.S. government's giving up to 4 million borrowers who may have been improperly foreclosed on a chance to have their cases reviewed.  The nation's 14 largest lenders were ordered to do so after the government found some rushed the foreclosure process.

Copyright 2011 ABC News Radio

Bank of America Cancels $5 Fee

Jin Lee/Bloomberg via Getty Images(CHARLOTTE, N.C.) -- Bank of America has dropped its planned $5 monthly debit card fee, in a complete reversal of its announcement late September that attracted a maelstrom of customer anger.

"We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee," David Darnell, co-chief operating officer, said in a statement Tuesday. "Our customers' voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so."

After Bank of America, based in Charlotte, N.C., announced the planned fee, customers expressed outrage, including a petition signed by 153,000 customers across the country threatening to leave the bank if the fee were implemented.

The company said Friday it was planning to offer more choices for customers to avoid the fee, although it was still planning to go through with the charge next year. A person familiar with the matter had said customers could avoid the fee if they maintain minimum balances, deposit paychecks directly or use Bank of America credit cards.  

Copyright 2011 ABC News Radio

New Nook to be Announced Nov. 7?

Justin Sullivan/Getty Images(NEW YORK) -- Book retailer Barnes & Noble is expected to introduce an updated version of the Nook Color next week.

Tech blog Gizmodo says it received an invite from the company advertising a "very special announcement" taking place on Nov. 7. There is speculation the announcement could be an updated Nook, or a tablet under a completely new name. Either way, it would beat to market Amazon's already heavily hyped Fire tablet by a week.

Copyright 2011 ABC News Radio

Crunching Data on the Best Cookies

Tate's Bake Shop(NEW YORK) -- Do you love chocolate chip cookies? Consumer Reports tested 18 of the sugary confections and in a new ranking says the cookies produced by Southampton, N.Y.-based Tate’s Bake Shop take the cake.

“They were excellent. They had big butter and chocolate flavors and smooth chocolate chips,” Consumer Reports’ Maxine Seigel told ABC News. “We rated them excellent.”

Seigel says that because of their price, Tate’s are more of a treat for the gourmand -- not an every-day, sit down and eat-a-bag-of-cookies kind of cookie.

“They're quite expensive,” Seigel notes. “Each cookie costs about 76 cents, but they are worth it if you don't feel like baking them in your own home for a nice treat.”

In its analysis Consumer Reports says, “If you're going to indulge in a sweet treat, you want it to be tasty. But most of the 18 store-bought and fast-food chocolate-chip cookies our trained tasters tried, including top seller Nabisco Chips Ahoy, were just OK, and many were dry and gritty.”

Some of the other top-rated confections? Cookies at Starbucks, McDonald’s and Subway “were very good,” Seigel said. “Dunkin’ Donuts was a little bit less-so, only because in some of the stores we found them to be over-baked.”

Cookies from Starbucks and Dunkin’ Donuts have more calories than the others, Consumer Reports said, “but their cookies are about three times as big,” the report said. And proof that you can't have your cake and eat it, too? “Weight Watchers, the cookie with the least fat and fewest calories, was lowest-rated of all.”

Tate’s can be found at Whole Foods, Balducci's, Bristol Farms, Central Market, and other retailers.

Copyright 2011 ABC News Radio

Where's the Money? MF Global Faces New Questions After Filing for Bankruptcy

Daniel Acker/Bloomberg News(NEW YORK) -- What happened to hundreds of millions of dollars at MF Global? The collapsed securities firm led by former New Jersey Governor Jon Corzine is facing new questions about missing money. 

Trading in shares of MF Global was halted hours after the company filed for Chapter 11 bankruptcy protection Monday in New York.

Federal regulators are reported to be investigating major discrepancies in MF Global’s books, and the missing money scuttled an agreement to sell the company. 

MF Global’s bankruptcy was the biggest failures of a financial firm since the Lehman Brother’s bankruptcy in September, 2008. The commodities trading firm made risky bets on European sovereign debt, and lost billions of dollars.

Copyright 2011 ABC News Radio

Savvy Shoppers Turn to Smartphones for Deals

George Frey/Getty Images(NEW YORK) -- Call it the rise of the savvy shopper. With the approach of the holiday shopping season, consumers are using their smartphones to snag bargains.

“Consumers in general have become much more sophisticated,” says Ray Florio, who follows consumer marketing for Accenture Consulting.

“Your best price is no further than your smartphone. You can go into any store, scan a bar code and you’ll get the best price located right near you or online."

Many shoppers know about pricing strategies, says Florio.

“They understand how retailers operate now they’ve been conditioned to hunt for discounts and that behavior has taken control.”

That means less impulse buying by shoppers in a tight economy.

Copyright 2011 ABC News Radio

Federal Reserve Board to Meet Again

Comstock/Thinkstock(WASHINGTON) -- The policy-making committee of the Federal Reserve Board is set to meet Tuesday and Wednesday, but the topic of discussion is not so clear.

The committee might be meeting to take some further step to stimulate economic growth. If they did so, it would be the third such attempted stimulation since August. But 5 out of 10 of voting members have declared themselves against such a move, on the grounds that it would risk giving the impression that the Fed is getting soft on inflation.

The committee also could add to the bank’s already hefty portfolio of Treasury securities and mortgage bonds, which would serve to keep down already-low long-term interest rates -- a move that Antuilo Bomfin, senior managing director of Macroeconomic Advisory, views as unlikely. The firm, which forecasts the U.S. economic outlook, is headed by former Fed governor Laurence H. Meyer.

“Over its last two meetings,” says Bomfin of the Fed’s policy committee, “They already have taken some very bold decisions.” He cites ‘Operation Twist’ -- the purchase of additional mortgage-backed securities, and the bank’s declaration that it intends to keep rates low though mid-2013 if current forecasts hold -- as examples of such boldness. “So, I’m not expecting much in terms of big decisions from the two days starting Tuesday,” Bomfin said. “There will more said about the need for improved communication and transparency.” The meeting, he predicts, will be devoted to “internal discussions” rather than to making any big announcement Wednesday.

Copyright 2011 ABC News Radio

Russians Businessmen Battle for Billions

Adam Gault/Thinkstock(LONDON) -- Why would two multi-billionaires come head-to-head in court? And just how much money is up for grabs in this court case between the two financial giants?

Roman Abramovich, a Russian businessman, faces former mentor Boris Berezovsky, an exiled Russian oligarch, in court Tuesday, after claims that Abramovich blackmailed Berzezovsky into selling his shares in the oil conglomerate Sibneft for a fraction of their true worth. Mr. Berezovsky, alleges breach of trust and breach of contract

The two have been reported as being very cold towards one another, ignoring each other across the court room, and for good reason, as Berezovsky is claiming roughly five billion dollars in damages.

Copyright 2011 ABC News Radio