Kitco Charged With Massive Tax Fraud Scheme, Business Viability In Question

Tyler Durden's picture

Life for the precious metals dealer, and home of the often times infamous Jon Nadler, Kitco just got very ugly. "Claiming widespread tax fraud in the gold refining and trading sector, Revenue Quebec and police investigators this week conducted searches and seizures at 70 locations, mostly in the Montreal area. One of the targeted sites was the downtown Montreal location of Kitco, a
major buyer and seller of gold. A note on the floor of its office on
Thursday said that “operational constraints” had forced the service
counter to close this week." It is unclear if this alleged tax fraud bust means Kitco could be out of business shortly, although based on the following statement it is somewhat difficult to have an optimistic outlook on the future employment prospects of said Mr. Nadler: "The company said it has asked Superior Court of Québec to appoint an
interim receiver so that it may continue normal operations under the
supervision of the accounting firm RSM Richter. The action was taken “to
allow for the time required to vigorously contest Revenu Québec’s
unfounded claims
." At the heart of the allegation: "In a communique, Revenue Quebec said that by converting pure gold into a
gold object and then refining it back into a pure state, some in the
gold industry had used “artificial transactions” to obtain refunds of
taxes that were never actually paid.
" Apparently Kitco was one of them. Oh well, we will miss the pretty charts.

From Financial Post:

No arrests were announced, but the tax department said Thursday it had reason to believe several people were involved in producing false invoices for a number of companies.

The company strongly denied any allegations in a statement Friday.

“Kitco Metals Inc. has never participated in any tax fraud, nor has it ever carried out any fictitious transactions. In all respects, Kitco vigorously contests all aspects of Revenu Québec’s investigation,” it said.

Revenue Quebec said two networks of companies and individuals were at the heart of a false-billing scheme that had cost the province more than $150 million in tax on almost $2 billion in transactions.

In addition to Kitco and Carmen International Inc., it said almost 125 other companies had been complicit in the scheme.

Instead of trafficking in invoiceless gold, perhaps Kitco should have just pulled a Goldman, opened a prop desk, and bought the stuff. Hopefully they learn from this mistake.

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Clueless Economist's picture

Jon Nadler...isn't that the fat liberal congressman from New York City?

He is another Weiner, just not as arrogant and vile.

AnarchoCapitalist's picture

I have had many email exchanges with Nadler. Trust me, he is very arrogant and also an idiot.

chumbawamba's picture

But where will we get our current gold and silver price charts if goes away?

Damn, I hate when they do this to us.

I am Chumbawamba.

tmosley's picture is good.

What I am wondering is where will we be able to get historical prices?  I've used those to out trolls before.  Not having access to them will make future troll hunts (for certain types of trolls) harder.

DoChenRollingBearing's picture

tmosley, you are an expert (and bull) on silver, no?

I really, really need an expert to write "The Case for Silver" at my blog.  NOT as a strawman article, but to prepare the ground for a gold vs. silver article.  Hey, I want to learn!

mrgneiss's picture

Is this Kitco crisis a possible domino?  I mean, they have a huge pool of unallocated gold and silver, isn't there going to be a run on that with this news, and a run on their allocated stores as well?  Have they leased or leased out huge amounts of precious metals to and/or from other bullion banks?  Will investor's be clamouring to get their physical out of Kitco, and as Avery Goodman said, if the fractional precious metals system is levered 100:1 paper to physical, for every one ounce of physical that is withdrawn, how many paper ounces does that affect?

jeff montanye's picture

you bring up a superbly salient point.  i am inclined to agree with you though i bring precious little pm experience to the table.  however i am liking our chances just a little bit better for the actions of the quebecois. 

jeff montanye's picture

but who should ron paul's vice president be?  to avoid president boehner. 

DoChenRollingBearing's picture is the source of the gold, platinum and silver charts at my blog.

My local coin dealer uses to price his gold coins when I go to buy.

glenlloyd's picture and there's always for charts also

I wonder whether there's any truth to the allegations..

akak's picture

I have had many email exchanges with Nadler. Trust me, he is very arrogant and also an idiot.

I have had several quite lengthy email exchanges with the vile and malevolent Jon Nadler as well (portions of one of which can be read here:, and while it is tempting to dismiss him as a raving idiot, I do not in fact believe that he is --- he chooses his words and consistent, persistent anti-gold/pro-bankster words and tack precisely.  His innumerable disingenuous arguments, outright lies and general poormouthing against gold (and silver), and his implicit support of the bankster elite and the financial and monetary status-quo, speak much less of idiocy, and much more to the peddling of a purposeful pro-Establishment ideological agenda. 

Nadler's arrogance and inability to honestly debate and confront the truth about gold, much less his refusal to even acknowledge the ten-year bull market in the precious metals (and not to mention his frequent malicious and hysterical attacks on the advocates of gold as "Radical Goldbug Extremists" --- but never, ever any bad words for the vastly larger number of "Radical Equities Extremists" or all the "Radical Bond Extremists"), make his position as the official spokesman of a prominent precious metals dealer all the more inexplicable and suspicious, as well as infuriating and galling.  It was with great probity, and propiety, that Peter Grandich labeled Jon Nadler "The Tokyo Rose of Gold".

Botox4U2's picture

Same here. I got so fed up with his anti-gold and silver commentaries that I refuse to read his crap. Because of him and him alone I hope Kitco closes down. I've alwas suspected them of being crooks.  ARROGANT + KITCO + ARROGANT

bigdumbnugly's picture

uh, that would be jerry nadler, ce.

JonNadler's picture

Do they know who they're messing with? HA? Am the Great Jon Nadler, do they know who my friends are? Friends.... Jamie you're still my friend aren't you? You will pay for my defense won't you? Oh I couldn't bear it in prison with all those rough, smelly characters


Oh my, oh my am screwed and for tax fraud! All these years of engaging in all kinds of underhanded business dealings and they get me on taxes!! I won't be another AL Capone!!

I know where the bones are burried I will tell all, I know where Blythe's files are hidden !!!

Nobody can touch me

am untouchable! am great! am bawaaaaaahhhhhh! am screwed


DOChen will you at least visit me in prison?

Canucklehead's picture

If you know where the bones are buried, you can have breakfast or lunch with Leo.  He will make you sound like the most loveable rascal this side of Huck Finn, or is it Mickey Finn?

Gordon Freeman's picture

Now, that is funny!  "lunch with Leo"--excellent!

Leo Kolivakis: the toady's toady

Bay of Pigs's picture


I tried to reach out to you years ago....but you're on your own now.

The Swiss Bandit is going down.

It couldn't happen to a more deserving person.


JonNadler's picture

oh man, I should have listened to you and DoChen, you tried to warn me but NOOOOOO, I had to be seduced by the glamour at Jamie's house


oh ohh woe is me!

lunch with Leo? you mean lunch alone by myself?..... who do you think Leo is you shmuck

DoChenRollingBearing's picture

Glamour at Jamie's house is completely different than tax problems in Canada.

Well, if you do spend time in the pokey, at least you will have the memories...

So, tell us JonNadler tell us true, did you hit Blythe or just the usual Ukrainian hookers out there at Jamie's while drinking his Lafite Rothschild?

akak's picture

lunch with Leo? you mean lunch alone by myself?..... who do you think Leo is you shmuck?

Hmm ... Leo and Jon Nadler do both reside in Montreal ... curiouser and curiouser ....

DoChenRollingBearing's picture

Damn right JonNadler!

Hey you should send me a gmail at my name if you want to check out my blog.

I regret that I had to use 24hgold's charts at my blog.  Sorry.


Yeah, you should blackmail Blythe!  Hell yeah!  Have to fight dirty to stay out of jail!


SlipStitchPass's picture

 Just called and pulled my pool account. Heres to hoping that check does not bounce. Fucking Nadlers

Poor Grogman's picture

never could comprehend what nadler was on about

Arius's picture

what is next...dennis gartman of the famous TGL get hit by a stone walking by CNBS parking lot...

Manthong's picture

Hmmm.. so what's this going to do to the price of rhodium?

Roger O. Thornhill's picture

Nadler... I have never seen someone so wrong, for so long, as Jon Nadler.

If you listened to him, you missed the boat, long, long ago. Shill, useful idiot, or reverse barometer - it is anyones guess. Somehow I think the problem with him is that he was in gold in the heady days when equities saw better returns than metals and still sees gold only as something used in india during india's wedding season - for jewelry - and he can't understand gold as money at all. He doesn't understand gold's utility as a store of wealth, hence his retarded ramblings.

Regardless, personally, I can't stand him, and his ever annoying, cutesy headlines. Just nausea inducing. Needless to say, Nadler's only real utility is to make people's blood boil.

Cleanclog's picture

Honesty is, honestly, gone.

the not so mighty maximiza's picture

Always gotta pay the Gmans protection money.

hedgeless_horseman's picture

The company said it has asked Superior Court of Québec to appoint an interim receiver...

A huge fucking mistake!

Mark my words.  Once the receiver is in it is all over except the wake and burial.


Receivership: One of the ugliest rackets.

Judge      ---$--->    Receiver  (receivership appointments)

Receiver  ---$--->     Lawyer   (company must pay for receiver's lawyer)

Lawyer     ---$--->   Judge      (campaign contributions / mediation$)


Rinse and repeat until the company is out of assets... 

...but there is always another company.

Seen it a million times.  Makes me sick, the looting bastards.

Imminent Crucible's picture

Well, it couldn't happen to a nicer bunch of grifters.

Boxed Merlot's picture

One of the most succinct descriptions of the daily life of the "smartest guys in the room".

I think termites might be the next most effecient creature found in nature capable of devouring widow's houses. 



Problem Is's picture

A retrospective homage to termites... nice...

Bastiat's picture

Well I suppose they are trying to keep the tax nazis from seizing the assets and killing them without due process.

OutLookingIn's picture

Wrong. Maybe in the U.S. where judiciary positions are political. In Canada judgeships are judicial appointments. No connection between the judiciary and the political arms of government.

Now for the AG's of the states and the very much conflicted judiciary to get off their butts and start indicting and prosecuting with incarceration. Fat chance of that happening! Kitco will just go south of the border and set up shop with the rest of the thieves! 

hedgeless_horseman's picture

NEWSFLASH:  Canada is not corruption free.

Politics has little to do with it.  There is definitely a FINANCIAL connection between the judiciary (lawyers temporarily in robes) and the lawyers representing the receivers. 


Diogenes's picture

Don't confuse Quebec with Canada.Quebec law is based on pre Napoleonic French law and Quebec politics is more corrupt than Arkansas.

GeoffreyT's picture

I call bullshit. Candidates are put forward by an advisory committee comprised of current jurists, but the actual appointment is done by the GG (a political appointee) who follows the advice of the Cabinet.


So while judges are not ELECTED, their appointment is sure-as-balls POLITICAL.  

It's the same everywhere - the political class requires 'safe hands' in the stupid robe-wearing geriatrics that provide the theatrical set-piece that gve a false gloss to the State's codification of its use of force and  fraud.

akak's picture

It's the same everywhere - the political class requires 'safe hands' in the stupid robe-wearing geriatrics that provide the theatrical set-piece that gve a false gloss to the State's codification of its use of force and  fraud.

The black poetry of the damned.

Atchman's picture

Yep, Nadler delivered lashings and lashings of empty rhetoric on a daily basis.

camoes's picture

I love their BB app...

Michael Victory's picture


always liked their forums, though i felt as if they were monitored by big bro.


Alienated Serf's picture

EVERYTHING is monitored by big bro.


hedgeless_horseman's picture

It is for your own protection. 

Your compliance is acceptable as gratitude.

Esso's picture

"EVERYTHING is monitored by big bro."


Only the stuff that occurs in the spectrum between DC and light.