First State Depository: Court orders $146m penalty over missing silver coins

Court orders $146m penalty over missing silver coins​

Statement of Commissioner Kristin N. Johnson Regarding CFTC Settlement with First State Depository Company, LLC and Argent Asset Group LLC for Precious Metals Fraud​

Federal investigation is looking for at least $75 million in missing silver and gold from a Delaware warehouse​

searcher said:

Philadelphia Inquirer

Federal investigation is looking for at least $75 million in missing silver and gold from a Delaware warehouse​

The empty vault’s heavy steel door stood ajar at the end of November beside the last unclaimed silver proof coins set in piles to be sold at auction.

Court-appointed receiver Kelly Campbell had been overseeing this depleted storage facility of First State Depository Co. LLC for the past year, arriving the previous fall with U.S. marshals and a judge’s order. He and auditors from Baker Tilly checked the coins against records showing around $140 million in gold and silver. Much was missing.

Around 2,100 customers stored gold or silver at First State in labeled boxes, like a bank deposit box. Many were retirees who had been persuaded to include precious metals in their IRA or 401K accounts. For tax reasons, they needed to store the metals in a secure place away from home, which First State claimed to offer.

“Most of these investors were elderly people,” Campbell said. “They were investing their savings. It’s tragic.”

Campbell’s team recovered $64 million of precious metals from nearly 1,000 boxes and sent it back to the owners.

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Unca Walt said:

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It's the old stacker saying writ large.

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CopperSilverGold said:

It's no different than fiat in a bank. You are a creditor and your deposit balance digits on the screen is an IOU. Be your own bank whether it's fiat or PMs.

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Grand jury adds victims and details in disappearance of gold and silver from Delaware depository​

searcher said:

Grand jury adds victims and details in disappearance of gold and silver from Delaware depository​

If convicted on all charges, Robert Leroy Higgins faces up to 45 years in prison after investors' assets disappeared from the depository he ran in Delaware.

Published Feb. 19, 2024

Robert Leroy Higgins’ Delaware gold and silver storage businesses ran out of operating funds in 2012, but, according to a federal grand jury, the West Chester precious-metals dealer was able to attract new clients and stay in business for 10 more years by stealing coins and bullion that 1,000 customers had entrusted to the vaults at his Wilmington warehouse.

Higgins is due in Delaware’s federal court Thursday for arraignment on criminal fraud and tax charges first leveled in 2022 and amended three times, the last filed Feb. 15 after attorneys for Higgins and the U.S. attorney for Delaware failed to settle the case without a trial.

If convicted on all charges, Higgins faces up to 45 years in prison. He remains free on condition that he not leave the area, said his lawyer, Jeremy Gonzalez Ibrahim of Chadds Ford.

Higgins, 68, a longtime coin, bullion, and currency dealer, owned First State Depository, one of several Delaware businesses that hold precious metals for companies and individual investors.

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Grand jury adds victims and details in disappearance of gold and silver from Delaware depository

If convicted on all charges, Robert Leroy Higgins faces up to 45 years in prison after investors' assets disappeared from the depository he ran in Delaware.

www.inquirer.com

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CopperSilverGold said:

if you don't hold it, you don't own it.

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Robert Leroy Higgins, a West Chester, Pennsylvania, man who for more than a decade operated the First State Depository Co. and various precious metals brokerage businesses out of Wilmington, pleaded not guilty to a raft of tax and fraud charges in Delaware District Court.
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Thursday was his initial appearance in court on a third round of federal tax and fraud criminal charges in a case that could lead to more than four decades in prison.

In court, he tersely acknowledged to the magistrate that he understood the charges against him and entered his plea. After the hearing, he declined to comment through his attorney, Jeremy H. Gonzalez Ibrahim.

Separately, he faces another federal case where prosecutors said gold coins found stashed in the ceiling of his home are evidence that he lied to a judge under oath. He also allegedly posted "silence is GOLDen" on a witness's Facebook page in what prosecutors describe as a criminal attempt at intimidation.

Similar facts were also before another federal judge in a civil case brought by federal financial regulators to order Higgins and his companies to pay more than $112.7 million in restitution to defrauded investors along with $33 million in civil penalties.
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The first victim outlined in charging documents in the criminal case agreed in February 2012 to purchase $1.2 million in silver through Higgins, silver that was to be stored in his vault. Over the next three days, Higgins spent down some $800,000 of that money on business expenses, partially on a $250,000 loan payment. The victim received a fake invoice for the purchase of 31 silver bars that never occurred, prosecutors wrote.
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The civil case against Higgins' companies was closed in July with the judge ordering more than $100 million in restitution be paid along with the $33 million in civil penalties.

It's likely that only a small fraction of what's owed to investors will ever be recovered.

Higgins was originally charged in the criminal case in 2022. Since then prosecutors have added charges to his case on two different occasions as the case has largely remained on hold. The latest criminal indictment centers on seven different victims that prosecutors claimed were ripped off by Higgins brokerage companies or the depository.
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... Last year, he petitioned the court to appoint him an attorney in his criminal case, representing that he was indigent.

District Court Judge Maryellen Noreika called Higgins to court with some questions. She noted that he said he had no income since 2012, but had gone on overseas vacations since and owned a $900,000 home.

"Most criminal defendants ... whose counsel is being paid for by the public are not in Hawaii for fourteen days," Noreika noted.
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