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Kitco Charged With Massive Tax Fraud Scheme, Business Viability In Question
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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KITCO
Kitco is a classic fractional reserve Precious Metals banker, of decades duration, as identified by Jeffrey Christian at the CFTC hearings in March 2010, who stated that it is commonplace to employ leverage up to 100 times one unit of Physical, supporting up to 100 units of "paper" metal.
This likely to be defunct company, which entered Receivership this morning June 10 2011, offers "pooled accounts", they store your PMs for you.
Except they don't . Its paper. They have been short since the 1990s , massively, and this massive tax Investigation is likely to revel a massive Ponzi scheme.
Nice slur job.
How do you know Kitco is a "fractional reserve precious metals banker." What proof do you have?
Did Jeffrey Christion say anything about Kitco at the CFTC hearings?
Did they actually "enter" receivership as of this morning?
Do you know they have no silver backing their pooled accounts? How?
I think your comments cross the line and if you can't support them you might be concerned about your liability.
Where there's smoke, there's usually fire --- and Jon Nadler's vicious, disingenuous and dishonest daily diatribes against the precious metals and their owners, and in support of the corrupt financial elite and their failing status-quo, is one giant stinking smokebomb.
One would have to be severely naive, grossly ignorant, or patently dishonest to refuse to acknowledge the extreme likelihood of the Ponzi nature of Kitco's pooled PM accounts --- set up for Kitco by none other than the duplicitous and disingenuous Jon Nadler himself.
Bastiat, grow a pair and wake the fuck up.
I took delivery from long-time Kitco pool silver position a couple months ago. I had serial numbers and bar weights within hours. I give them the benefit of the doubt because they performed perfectly for me making a substantial delivery at the height of the frenzy without a hitch. Just a fact.
So maybe you should wake up, tough guy and deal with facts rather than your fantasies. As far as I'm concerned, Kitco is straight until proven otherwise. And unlike you, I don't believe that accusation by tax nazis is proof of guilt.
Your single, one-time anecdotal experience doesn't mean shit, and you know it.
I will take the consistently dishonest and disingenuous anti-PM propaganda spewed daily by Jon Nadler as Kitco's official spokesman, along with the fact that this patently disreputable and discredited gold-hating bankster shill, and demonstrably proven liar, was instrumental in establishing Kitco's pooled PM account program, as more indicative of the true state of affairs at Kitco than your blind assertions of trust, quite aside from any and all taxmen and charges therefrom.
To believe that the fraud of fractional-reserve banking is limited strictly to fiat currency accounts, and that the much less transparent precious metals banking activity remains as honest and pure as the driven snow, with physical metal to back EVERY and ALL such accounts being religiously stockpiled by financial establishments already proven on many recent occasions to be corrupt and/or fundamentally insolvent, is the very height of naivete and/or duplicity.
First my disclaimer:
#1: I look at kitco charts first thing every day to see the current exchange rate of dollars as denominated in my physical gold holdings. Kitco has very useful charts, for which I thank them.
#2: Otherwise, Kitco is useless to me. Whatever services they offer, they can't match what I get elsewhere (prices and delivery terms on physical).
#3: Everyone involved with "paper gold", "paper silver" and manipulation of markets by pretending to hold physical and by forever settling (or usually, just upping the ante) in their short positions are criminals.
#4: Nadler royally sucks! And he has cost millions of people untold wealth by fraudulantly convincing them fiat, fake, fraud, fiction, fantasy, fractional-reserve paper-debt toilet paper is better to hold than gold (which according to Nadler has been minutes away from crashing to below $300 for the past decade).
Having said this...
I also want proof of any misdeeds.
And I refer to BOTH the allegations of the government, and your allegations they're running a fake paper ponzi scheme.
Oh, and if you can't provide any proof, then tell us what convincing evidence you have. If you have any, I'll accept your claims as plausible.
ok honeychild, my answer is as set out below. Kitco has been bad since God was a child.
Please reply with the message number. I looked briefly but didn't find anything.
i once worked in the next vault under place ville marie in montreal, they had jack shit. A sham. Only one percent ask for delivery. Too tempting.
That they are in receivership is a matter of public record.
jeffrey christian did the dumbest thing i have ever seen in a public forum, shot his mouth as he frequently does . probably the Columbian marching powder. He is singlehandedly responsible fo rthe move to 50...so far.
Kitco is one of about 6 of these paper silver Ponzis.
And finally, does a bear shit in the woods.
##### LESSON TO EVERYONE #####
You don't really own physical gold, silver, platinum, palladium or anything else unless YOU have it secured and hidden away under YOUR own nose.
Everyone should take possession of your goods. This also helps drive prices to their appropriate, natural level by removing more and more physical from the paper-short system. This is very good for you, me and every honest, productive individual.
Private vaults are good too because no matter how well you hide it on your premises, you have to think what you'd do if somebody put a gun to your wife or kid's head, or your head and said: where's the gold? If you have it on your property, your best defense is that no one knows -- including your insurance agent -- including the UPS guy, etc.
Which is why it is much better to bury it deeply in several non-discript places in the boonies. Get a GPS that display longitude, latitude, altitude [to about 1 foot ~ 1 meter precision], and record in several private places --- as a series of phone numbers or in some other non-geographical-location format form --- where your stashes are.
And yes, only one other human should have the clues that COULD (given your written down records, which they do not have access to until your death) lead them to your stashes.
Hint: This is my favorite "final protection". Once you have your goodies stashed securely far, far away... get some fake brass-alloy gold coins (they are available), put them in a tube made for keeping gold coins, and hide them somewhere secure in your home. If determined thieves burgler your home, they'll leave satisfied when they find it (and hopefully get busted at the coin store when they try to pass it as gold). Or if you get in the "I'll shoot you in the head" scenario, just go get it and give it to them.
PS: Only one side of these fake coins says "copy" on it (which might not mean anything to most thieves anyway, if they even bother to read that carefully). So put that side toward the center of the tube from both ends. Alternatively, get a machinest friend (or pay) to mill that marking off your coins. Make sure they don't do too good a job (leave a slight rectangular depression), because you don't want anyone selling them to anyone as real gold. To be sure, any coin store will recognize the milled rectangles for exactly what they are.
PS: I would describe them here, but won't for obvious reasons. If you don your creative inventor cap, you can concoct some pretty-much foolproof ways to hide gold coins and bars in your home where NOBODY will ever find them. Some of these ways might cost you a couple hours or a couple hundred bucks, but some won't.
Don't forget to protect against metal detectors.
surpassingly brilliant post.
I've listened to Nadler in the past and I can understand the criticism about him, but my theory as to why he seems like such a perma-bear is this:
Kitco has mostly very wealthy clients who buy gold and other PMs on a regular basis. Some or most could buy a lot in one order but they don't because they know that would spike the prices higher in a short amount of time and they don't want that to happen, it's more cost effective to buy small amounts over time so as to not upset the market.
Nadler's role at Kitco is simple: keep talking down the rise in gold and PMs in order to keep the masses out of the market because if he were to say that gold & PMs are a great investment then that might cause the masses to flood into the PM space. This would cause the prices to spike up and that would upset the wealthy clients that Kitco caters to.
So he's been doing a good job in keeping Joe Sixpack out of the PM market and making sure prices stay low so Kitco's wealthy clients can continue to accumulate at low prices.
Just my theory on the enigma that is Nadler.
Sorry, that would be a massive conflict of interest. Hell, that would be on par with the modus-operandi at GoldmanShafts!
To sell an asset to customers, and then to turn around and intentionally attempt to hold down the price of that asset - is a conflict of interest.
Nadler has likely always been a government agent or stooge.
It's never a conflict of interest to serve your most valued clients to the best of your ability.
I've thought of that too over the years too, Kirk. Talking their position -- buying. But who knows. Somebody told me once that Nadler was an old buddy of the founder but unless it was true love, it couldn't be that blind !
thx akak, you nailed it
Just one more thing Jon Nadler didn't see coming
The only thing Jon Nadler will ever clearly see coming is a bullet, if there's ANY justice in the universe.
Market was trending up, with Gold and Energy stocks leading the comback, until link between Street.com and Blue Lithium spyware was revealed in an egregious Bot Master mistake.
Ninnies decided to cover up by bleeping the Market.
But we all saw what we saw, among the most serious mistakes the DOGs have made in two decades.
An immense embarassment to Guru Cramer and to the myth that there is ANY distance between the Bubblevisions and the Market Insiders they represent.
Paradoxically, though, it's exceptionally Bullish.
Now that they've been caught out so blatantly, how much further do they dare to go?
IMO, not much further, if at all.
Cash 4 Gold is a tax fraud scam? Not a bankster conspiracy to plunge the gold price during LBMA trading hours?
Wha-a-a-at? WHA--A-A-A-A-AT???
Who are the rest of the companies involved with this. Why does Kitco get all the attention.