Fool’s Gold

by JP Bender

“A fool and his money are soon parted.” It’s a proverb that goes back at least to the 16th century.
The modern version is, “a fool and his gold are soon parted.” That appears to be the business model for a company called Cash4Gold.
Cash4Gold is an LLC (Limited Liability Company, which is something like a cross between a corporation and a limited partnership). It’s based in Pompano Beach, at 1701 Blount Road.
As a rule, corporations and LLCs do not make public who their owners are, so, as is true with most LLCs, its background and history is a bit blurry. It was created in April 2007 as Cash4Gold, LLC. Last October it changed its name to Green Bullion Financial Services, LLC, and registered Cash4Gold as a fictitious name.
  A slick advertising campaign
Up to that point, few people had heard of the company. But then things changed. Someone decided to wage a slick ad campaign for the company on late night TV, and on the internet. The now financially challenged Ed McMahon, and Stanley Kirk Burrell (whom you probably know better as MC Hammer), were hired as celebrity promoters. A company called Albar Precious Metal Refining, Inc., an Illinois corporation, bought a very expensive ad slot with the Super Bowl. The ad was on behalf of Cash4Gold.
Not many people had heard of that name before the Super Bowl, but that ad, which was telecast around the world, has put Cash4Gold on the map. Now that company is on a lot of radars, and a lot of people have flocked to the local post office to mail them their gold.
Keep in mind that Super Bowl ads are super expensive, because there is such a huge audience – and companies compete to have their ad labeled as the “best” one. This brings in such big gun advertisers as PepsiCo, with its top rated Doritos ad, and Anheuser-Busch, whose Budweiser ad was ranked 2nd. Other top rated ads promoted Coca Cola and Diet Pepsi. Other big name advertisers included AT&T, Audi, Clorox, GEICO, H&R Block, Kellogg, NBC, Radio Shack, Sony, Toyota, and Volkswagen. With such well-known and trusted names, a certain level of credibility attaches to all Super Bowl advertisers.
According to TNS Data Research, there were 258 Super Bowl ads, of which 58 were NBC promotionals, and one was the Bridgestone half time show – that couldn’t have been cheap. According to Reuters, the starting price for a 30 second ad was $3 million.
About five minutes into the amazingly exciting and contentious fourth quarter, there was the ad purchased by Albar Precious Metal Refining, Inc., promoting Cash4Gold.com – and suddenly everyone in the world knew this tiny company.
State records reflect that Albar, Green Bullion, and Cash4Gold are all located at 1701 Blount Road, Suite A, and that the name Cash4Gold belongs to Green Bullion. That raises an interesting question – why did Albar pay for the Cash4Gold ad, when Albar doesn’t seem to have a direct relationship with Cash4Gold – or does it?
  Name infringement
There’s another interesting twist – there is already a Jacksonville company which uses the fictitious name Cash 4 Gold (a few spaces added to the name), and that was registered in December 2006, before the Pompano Beach Cash4Gold was created. That means Pompano’s Cash4Gold is using the name illegally, and the Jacksonville company could force the Pompano version to cease and desist, and probably also get a judgment for damages. The owner of the earlier fictitious name is International Gold Market, LLC, created in August 2006. That could be an interesting investigation, but for now let’s stay focused on Pompano’s dirty little secret.
The principals
Green Bullion Financial Services appears to be run by Jeff Aronson, its CEO. Its president is Howard Mofshin.
Interestingly, the Illinois corporation’s CEO is also Jeff Aronson, and its president is also Howard Mofshin. Albar, the Illinois company has a vice president, Jerome Kornbluth. And everyone is located at 1701 Blount Road.
How it works
I sort of wondered how a company that buys scrap gold could afford a Super Bowl ad. So I called them.
When I first called, I talked with somebody who used the name ‘Winston,’ and who would not give me his last name. I asked for basic information and how the process worked. He must have been a new telemarketing employee because he hesitated, paused and used more ‘ahs’, ‘you-know’s, and ‘hums’ than Caroline Kennedy used during her ill-fated New York Senate campaign.
‘Winston’ did manage to give me a number of answers, and promised to send me a lot of information, along with a mailer to use if I wanted to send in my ‘junk gold.’ Winston, while a little confused, made the sell sound great on the surface: you pack up all your old jewelry – stuff you’ll never wear again – into an free pre-paid postage envelope, provided by the company, and send it to Cash4Gold. The package is insured, as a part of the prepaid postage, but for only $100. That’s a trap, as you will soon see.
They examine the contents, and cut you a check for “the value of the gold”; and that is the end of process. Presumably if you accept the check, they melt down the gold and sell it. It sounds better than going to a pawnshop – the process is simple and requires no personal interaction with an appraiser – so what could go wrong?
  A scam?
I instantly started doing some Internet research, and soon learned that there are even BLOGS out there with comments about this company, and not much of what is being reported is very kind. I have taken the time to communicate with some writers on the BLOGS – both former employees and some very unsatisfied customers.
They tell a sordid story of ripoffs, outright lying to the public, and bonus money for employees who cheat the customers with an organized pattern of deceit, to maximize profits at customer expense. And it’s all taking place right here in Pompano Beach. That’s right &ldots; it looks like Pompano Beach is about to make the national headlines again.
During my online sleuthing, I found that I’m not the only one who figures that if Cash4Gold has this much money to spend on TV ads, someone’s getting the short end of the stick, and it’s probably the people sending in their family heirlooms to be melted into ingots.
According to their website, the folks at Cockeyed.com put Cash4Gold to the test, rounding up a bunch of old rings, necklaces, and earrings, and taking them to a regular pawnshop to be appraised. Christopher Null, a Yahoo blogger, writes that they were offered $198 for the entire lot. They then sent the items to Cash4Gold and waited for a check in the mail. It arrived within a few days as promised … in the amount of $60. You don’t have to accept the check; because the deal isn’t done until you cash it.
Null says, “that price alone is practically criminal, but that’s where the truly slimy part of the operation begins. First, according to one of my sources, if you call Cash4Gold and ask for your stuff back, you abruptly get a better offer. In the case of the above experiment, the offer was a whopping $178. That’s a better deal, but still not market rate, though the caller was told that Cash4Gold could ‘manipulate the numbers on their end,’ to make it appear that more product was sent than was in reality.” That statement suggests strange business practices – but it’s probably the only way Cash4Gold can cover itself to convince you the original offer wasn’t a wholesale ripoff.
As bad as that practice is,” says Null, “it’s far worse if you opt for the company’s ‘Fast Cash’ option. Here, that original offer ($60) would have been wired into your bank account within 24 hours of them receiving the booty. It sure is fast, and it’s not much cash – and you don’t have the option of declining the offer at all. You’re stuck with a pittance for your valuable gold items. (It’s also worth noting that a publicist working for Cash4Gold later offered Cockeyed cash (allegedly without Cash4Gold’s involvement) for removing its expose from the web.)”
As a side note, another website offers an in-depth exposé on how the system works, this time analyzed from the inside by an individual who claims to be a former employee. Here it is outlined how the company offers bonuses to phone operators who can convince you to accept a lower offer and how the company attempts to delay payments as long as possible. It’s also worth a look if, despite the red flags, you’re considering sending stuff to Cash4Gold anyway and haggling for a better deal:
http://www.complaintsboard.com/complaints/cash4gold-c117648.html
  A smelter in Pompano Beach?
Melting down gold, or any other metal other than mercury, requires a significant amount of heat. For gold, that temperature is 1,948° Fahrenheit (a bit lower for gold alloys such as 18K and 14K gold). The temperature has to be raised significantly above the melting point in order to pour the liquid metal before it hardens. It would take a big fire to get to gold’s melting point, so smelting requires a furnace or some other high heat source, and a crucible. Some industrial smelters use a microwave furnace.
Because of the high temperatures, smelting is dangerous, so safety equipment is also required. Impurities may include mercury (which makes smelting a health hazard unless the mercury is first distilled out), copper, silver, iron, sulfur, and other elements. Chemical and other methods are used to separate gold alloys from impurities, and these can be dangerous unless safety equipment and safe methods are used.
There has to be a smelter at some point in the gold extraction process, so I contacted an associate in Pompano Beach to drive over to the Blount Road address and snoop around for me. He is licensed, knowledgeable, and streetwise. He sent me the following e-mail:

JP -

Just drove over to 1701 Blount Road, #A. It is a nondescript one-story building in an office plaza on Blount Road. There is only the address on the two glass (darkened) doors. I parked in a small lot where the following 2 cars were parked: Toyota Tacoma (Fla. Tags ######) and Ford F150 (Fla. Tags ######).
There is a side door near a loading dock. It reads “Albar” and notes delivery hours are from 8:30a.m. – 3:30p.m., Monday–Friday. Immediately a white male, mid-late-50’s in age, shaved head, 5’3″, portly, tattoos all over both arms, wearing a work shirt with the name “Jerry” came out and asked my what I doing there. I explained that I was looking for “Powerline Products” at that address. He said he had never heard of the outfit. I guessed it may have been an old address and walked over to some of the local businesses to make it look good. The man was a little suspicious, but not hostile.
There is a sign from Blount Road directing people to other businesses in the office complex at 1721 Blount Road, but nothing for Gold4Cash, Albar, or 1701 Blount Road. There were security cameras all over the parking lot where I parked, but that is probably a good idea in that area.

Some jurisdictions require compliance with zoning regulations and special permits for smelters, and metal recyclers, such as Albar, must have a recycling permit from the Florida Department of Natural Resources.
I asked Mayor Lamar Fisher if there are any smelters in Pompano Beach. He investigated, and said there is none registered with the City. Turns out that Pompano does not have a ‘smelter’ category. According to Zoning Director, Robin Byrd, Albar made a proper application, disclosing they melted down unwanted metals, but the Occupational License division licensed them as a manufacturer. I was unable to get through to DNR to check on them.
From all evidence it appears that Green Bullion (doing business under its fictitious name of Cash4Gold) advertises to consumers, and later transfers the unwanted jewelry to a related recycling company.
For what it’s worth, mailers before the Super Bowl were preaddressed to the 1701 Blount Road address. Now they have been changed, and now use Post Office Box 66-8758, a ‘Pompano Beach’ post office located in Margate.
 Some bloggers claiming to be former employees complain of strong chemicals in the air, indicating that some chemical treatment is going on in the Pompano Beach facility.
Turns out there are two businesses located at 1701 Blount Road.
  The Albar Connection
Albar, the Illinois corporation, has a website, where it proudly proclaims its new location in Pompano Beach, complete with pictures of a rotary furnace, capable of running a ton of low grade material every two hours. Gold, it says, is chemically refined, and there is a picture of vats in which the gold is presumably refined.
In one place it lists its Illinois address as 740 Waukegan Road, Deerfield, IL, but a news item on the website suggests that the company moved to Pompano Beach in March (2008?). Pompano Beach occupational license records indicate that Albar came to Pompano Beach in 2005.
The Albar website also proclaims “Albar Launches Cash4Gold”, suggesting that Albar in fact owns the LLC. That does seems likely, in view of Albar’s corporate structure – Albar was incorporated in Illinois in August 2001, and its president was Jeff Aronson until 2008, when he became CEO and Howard Mofshin became president. Yes, same names as those in Cash4Gold.
According to the Albar website: “Cash4gold.com guarantees 5% more cash than our largest competitor. We are able to make this commitment because we are the refiner and you can by-pass the middleman. We are passing the savings right back to you, the general public.”
There could be some doubt as to the accuracy of that claim.
  Illegal activity?
Is it possible that Cash4Gold is involved in an illegal activity?
It has been claimed, “The highest attainment of organized crime is control of the local government.” I immediately hooked up with a top law enforcement officer in South Florida to discuss this Cash4Gold business. My contact has always been reliable and doesn’t take crime lightly. We have always had a good working relationship.
I was told this business has not escaped the attention of those who are responsible for such matters. I was also told, “Interesting that you are interested in writing about this place. We have been looking at it for sometime because they are apparently in violation of a law that deals with ‘2nd hand businesses’.
“Interestingly, pawn shops are the most vocal complainants about this place because we check them frequently and pawn shops have a high degree of compliance. But the 2nd hand business designation is so vast that we just can’t check them all. Not even close.
“The Broward State Attorney’s Office has been looking at this business but has not reached a decision yet. I will try to move that forward a bit with the new information you’ve provided.”
From a law enforcement perspective, the jury’s still out.
  A whistle blower?
Another individual, who claims to be a former employee of Cash4Gold, has posted his experiences on a BLOG Complaint Board in mid-January (www.complaintsboard.com/complaints\cash4gold-c117648):
“I would like an article to be posted pertaining to the refinery Cash 4 Gold, located in Pompano Beach, Florida. I am a former employee, who would like to alert/warn the public on the scamming process involved with this company. There are many of us who would like to vouch on behalf of this fast growing scam. We would like to get the word out to everyone on this step-by-step scam that involves so many people in this country and their valuables.
“Below I have attached the full details on the scam involving this company. We know this first hand, because this is how we were trained. Please take note of this information and do what you can to get the word out there, especially in a time when the economy has truly affected everyone for the worst.
“I am a former employee of Cash 4 Gold. I did not know much about the company before being hired. On my first day of being hired, I was taught the ‘Cash 4 Gold Scam’ from beginning to end:
“1. The ‘refiner’s pack’ that is used for you to put your jewelry, is ‘insured for up to $100 dollars,’ according to how much they determine from a description from you, the worth of your items to be, not an actual fully researched appraisal.
“2. We receive your ‘Refiner’s Pack’ within 3-4 days, but we are instructed to tell customers that it takes ‘7-10 business days’ for us to receive your pack, although many times your package has already arrived. (All cash4gold customers who have called customer service to track a package can vouch for this).
”3. Your jewelry gets appraised by hand, a magnifying glass, a plastic container, a small weight pad, and a bottle of ORANGISH fluid, which your items are then determined a value for. Not million-dollar equipment or specially trained jewelry experts. The company was temporarily closed recently due to health and code violations. I have witnessed testers being transported to Medical Centers, due to the testing department environment. There is literally a cloud of smoke in the air from acid and other testing material. If you were thinking it was some state of the art testing facility, you thought wrong.
”4. Although the payment (check) for your item is dated within 24 hrs of testing your jewelry, we sometimes do not actually send out the check until up to 3-4 days later. (If you are a customer check the date the check was issued against the stamped date on the envelope.)
”5. We do offer a 100 percent Satisfaction Guarantee or your jewelry returned, but the catch is, that the guarantee is to contact us within 10 days from when your check is dated. (This begins with the time it took for the accounts payables department to issue the check and also including the transit time for you to receive your check in the mail.”
“*** NOTE THE COMMERCIALS THAT INSINUATE THAT YOU GET YOUR CASH IN 24 HRS.*** However, if you request (sign) for FAST CASH (direct deposit) you automatically WAIVE your rights to have your items returned, EVEN if you are not satisfied with amount of your deposit.
“6. You generally receive your check around the ‘7th-10th’-business day, AND a majority of the time customers are outraged when they lay eyes on the amount of their check. Some customer’s even receive a check for 0.01 cents.
”7. There have been times when we have received your package and MISPLACED or LOST it at the facility. We CLAIM to not have received the items and even try to convince you that it was lost in the hands of USPS. At which point we begin an insurance claim process on your package. We ask you to send us an itemized list of the content of the package, trying to be as descriptive as you possible can (if you can remember everything in full detail) and a copy of your state issued ID.
“We then issue an INSURANCE CLAIM for UP TO $100 dollars. GOD FORBID, if your items are worth more then a $100 dollars. If you call customer service to check on the status of your shipment, and we actually have not received your package, we inform you of the insurance claim process. For those who know that their items are worth more than a hundred dollars, they become very upset and threaten to take action against the company, at that point we inform the customer that if they knew their items were worth more they should have added additional insurance at the Post Office. BUT unless you are paying to ship your items in a completely different package other then the refiner’s kit, you are unable to add insurance to the package.
“8. For those who do get in touch with us within the allotted time frame, we already know what you are calling about. Customers want their items returned, because there check amount is so insultingly LOW. The first thing, a Representative will ask you is ‘HOW MUCH WERE YOU EXPECTING TO GET BACK?’ This way we can know how much to ‘BONUS’ you.”
According to the writer, “the definition of a BONUS: We issue low checks just to have you call us back if you are smart enough to realize that you just got scammed. For the smart one’s we are paid to offer them a bonus up to 3 times the original amount of your check and you accept.
“For example: Sally Smith receives a check for $27.86 for a Rolex watch (which we don’t issue value for), a class ring, a ring with diamond chips, a pair of earrings with emeralds, as well as a few sterling silver pieces, and maybe a few items that were really of no value. Now Sally Smith calls the customer service department, where she speaks to a representative who seems so concerned and will see if she can do better with the amount by speaking to a ‘SUPERVISOR’. We then place the caller on Mute, and speak to our neighbors or doodle on a sheet, or twiddle with our hair for about 45 seconds, while we are supposedly speaking to our supervisor about Ms. Smith’s complaint.
“We then come back with an offer to ‘BUMP UP YOUR MELT DATE’ or any other lies the customer service representative can think of, and offer you a total amount of $53.20 which is a little under double the amount of your original check; in which case if you accept, the customer service representative makes a $15 bonus off of your transaction. If the customer service representative offers you under triple the amount of your original check, he/she makes $10 in bonuses.
“9. If you accept the offer, the deal is done, and you are told that the call is recorded (which most of the time, the record button does not work, or the box is full.) It’s just a way to make your feel bound by a verbal contract. If you do not accept the deal, you have to return your check, and it takes sometimes up to a month to receive your items back after we receive the check.
“10. If you only want the items that we do not find of any value back, you have to pay $10 shipping and handling fee to have your own items returned, which varies. Although it is listed under the terms and conditions, this charge varies from a $10-$15 charge to NO charge, reason being, UNSURE.”
The blogger clearly does not trust Cash4Gold, and goes on to say, “You are almost better off taking your items to a local pawnshop or shopping around for other companies. With the economy the way it is, Cash4Gold seems to be a way out of financial stress for some, but in actuality becomes a stress of its own. I would advise you to think twice before sending in valuables or items inherited and of sentimental value, it’s not worth it.”
  Fallout
One unsatisfied customer said she wanted to get 1,000 of the prepaid envelopes and send up to a pound of dirt in the packages. She knew it would be wrong, but it would cost the company a lot of money and it would be a way to show her disgust. Probably just as well she didn’t do that. The company uses mailers bar-coded with the name of the person who requested it, so it would never be an anonymous mailing.
On the internet, there are enough sad stories about this operation to fill a book. Several law enforcement agencies claim to be looking at the Cash4Gold operation in Pompano, but (assuming the internet anecdotes are true) apparently lack the investigative skills necessary to result in an arrest.
While I haven’t found any complaints about the Jacksonville company, I did find a Cash 4 Gold in Lakewood, Colorado, with complaints against it; another one in Raleigh, North Carolina; yet another one in Huntington Beach, California.
There was even a lawsuit in Los Angeles by CJ Environmental vs. Cash4Gold, LLC – seems our local Cash4Gold is accused of using CJ’s web design for their own website. The case is still open, because Cash4Gold’s lawyers successfully got the case transferred to Florida (because the defendant, Cash4Gold, is located in Florida).
  Caveat emptor
The obvious thought is caveat emptor, which means let the buyer beware. In this case, the consumer is the seller. I’m not sure what the Latin phrase is for that, but it is certainly good advice that unsuspecting consumers may be getting ripped off, getting a small fraction of the actual value of their scrap jewelry.
So I guess the best advice is do your homework, because “Cash4Gold and other gold-buying companies could be ripoffs – check it out at http://tech.yahoo.com/blogs/null/118748.” 

 Article from flsentry.com