Worth Its Weight: Company Buying Old Jewelry Accused Of Fraud
With gold prices more than $1,500 an ounce people are cashing in on old jewelry.
A lot of businesses are offering to buy your unwanted jewelry.
But one of the largest operations, setting-up shop in hotels across the country, is being accused of fraud.
Many customers are now wondering if their gold was really worth its weight.
CBS went undercover in a five state investigation to find out.
“Have you ever seen a scratch test done?” asks the salesman during an undercover gold buy.
“I won’t damage your pieces; it will just confirm the gold content” he reassures us.
It’s the Ohio Valley Gold and Silver Refinery passing through Folsom for one week only, promising the “best value” for your gold.
Marlene Powell and her friend Karin Engel saw the same company advertised in their local paper under a different name: Treasure Hunters Road Show.
Marlene remembers “it said ‘as seen on TV’ and with the words ‘Road Show’.”
They thought it was the Antiques Road Show, a common misconception that got the company sued for trademark violations.
And the women felt deceived again when they got to the event at the Hampton Inn and Suites in Folsom.
Karen said “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.”
They believe they were taken for hundreds of dollars, and they’re not alone.
This joint-CBS investigation, initiated by our sister station in San Francisco, compiled complaints from across the country.
Most of them were from seniors citizens like a 71 year old in West Virginia, and an 88 year old on the Canadian border, both grandmothers desperate for cash and selling family heirlooms for pennies on the dollar.
After jeweler Tom Broadwin heard similar complaints from his customers he decided to visit the same road show which was traveling under yet another name, this time as Premier Estate Buyers.
Broadwin says “I had a gold bracelet filled with coins, clearly gold coins. 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 us $8,000 worth of gold for our investigation, but before handing it over he tested each piece for karat count and weight.
CBS took the gold to three separate jewelers to confirm its value, and then we brought it to a show in Santa Cruz.
The salesman took our jewelry, held up one bracelet, scratched it and said “yeah, this is all fine.”
We knew 13 out of the 15 pieces were 18 karat gold, but after carefully examining each item this road show manager told us “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 maybe the acid test he performed was wrong.
Was this an isolated experience?
We decided to find out.
CBS sent gold to CBS-owned stations across the country, asking teams here in Sacramento, Boston, Philadelphia, Chicago and Dallas to go undercover.
In two cities they got the karats right.
At two other shows, including Dallas, 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 travelled Springfield, Illinois, and the THR corporate headquarters.
“We are not in the business of lying to people,” said Mathew Enright, a spokesman for THR and Associates.
Turns out, the company operates 120 traveling shows a week under at least eight different names.
He examined our gold and confirmed that the gold was 18 karat.
We then showed him our video where the salesman points to a bracelet and says it was 10 karat gold.
The producer/reporter questioned the manager about his salesman’s mistake.
Reporter: “There’s a bit of a trend here. Either he doesn’t have a cursory knowledge of gold, or he’s lying to customers.”
Enright: “Sure, I mean it’s obviously a concern for me seeing that.”
Reporter: “On five different occasions, across the country, this isn’t an isolated incident.”
Enright: “Well, it’s a very small percentage compared to 140 managers that we have.”
He says employees are not “trained” to purposely to deceive customers.
But we obtained this THR buying guide which shows employees are “trained” to make a first offer of $1.50 per penny weight; the going rate is more than 30 times that.
Reporter: “Isn’t that excessive?”
Enright: “Ah, you know, ah, it’s absolutely legal.”
Reporter: “So my question is ‘do you feel guilty?’”
Enright: “Do I feel guilty? 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.
We had more gold loaned to CBS, this time a jeweler in Roseville.
We took it to THR’s show at the Gold Country Casino in Oroville.
But they couldn’t offer us a deal; the salesman said he had no scale and deliberately left his checkbook in his car so as not to be tempted to buy gold that day – inquiries only.
The salesman admitted to our undercover reporter that “we’ve been having trouble with checks.”
Yet despite its earnings two weeks into our investigation, thousands of the company’s checks stopped clearing when the bank closed THR’s account.
Enright: “It’s an unfortunate situation. I have no idea why it was closed.”
THR chief executive officer Jeffrey Parsons owes the IRS more than three million dollars, and according to court documents he’s been using the company bank account as his personal piggy bank.
Meanwhile, the company’s been splurging on luxuries like a country club residence and a plane paid for, in part, with silver coins.
Reporter: “He did buy a jet and a house with silver.”
Reporter: “Do you think the bank unexpectedly closing your account has anything to do with Mr. Parsons using company funds for extravagant personal expenses?”
Enright: “I don’t know. It’s a great question, I don’t know.”
The bank won’t comment on why it closed THR’s account, but unexpected closures are often due to fraud investigations, improper use of funds, or IRS liens.
The company is now scrambling to reissue checks out of a new account.
One of those checks belongs to our sister station in San Francisco, and they’re still waiting for their money.