That Physical Gold You Thought You Owned? You Didn't

Tyler Durden's picture


Earlier today, the CFTC issued an order and charges against two Boca Raton companies, (Joseph Glenn Commodities LLC and JGCF LLC, and their owners Scott Newcom and Anthony Pulieri) which accused the abovementioned of engaging in illegal, fraudulent off-exchange financed transactions in precious metals with retail customers, and also ordered them to pay over $1 million in restitution payments. Superficially, it would have been any other run-off-the-mill CFTC wristslap against an entity that is deemed not TBTF, and thus systematically relevant, in the parlance of the DOJ (unlike the Jon Corzines of the world, who are perpetually absolved of all crimes - actual and alleged), if only it wasn't for one small clarification at the end of the body.

The relevant section is bolded below:

The CFTC Order finds that from July 2011 through June 2012, the Respondents solicited retail customers, generally by telephone or through Joseph Glenn’s website, to buy physical precious metals such as gold, silver, copper, platinum, or palladium in what are known as off-exchange leverage transactions. According to the Order, the customers paid the Respondents a portion of the purchase price for the metals, and Joseph Glenn and JGCF purportedly financed the remainder of the purchase price, while charging the customers interest on the amount they purportedly loaned to customers.


[T]he CFTC Order states that when Joseph Glenn and JGCF engaged in these illegal transactions they were acting as dealers for a metals merchant called Hunter Wise Commodities, LLC (Hunter Wise), which the CFTC charged with fraud and other violations in federal court in Florida on December 5, 2012 (see CFTC Press Release 6447-12). Hunter Wise was purportedly Joseph Glenn’s and JGCF’s source for the metal and the loans. As alleged in the CFTC Complaint against Hunter Wise and according to the CFTC Order in this case, however, neither Joseph Glenn, JGCF, nor Hunter Wise purchased or held metal on the customers’ behalf, or disbursed any funds to finance the remaining balance of the purchase price. The Order finds that the Respondents’ customers thus never owned, possessed, or received title to the physical commodities that they believed they purchased.

In other words: that physical gold that your trusted "held" on your behalf... they never really held it, and neither did you. But don't worry: all the gold "held" by various brokers professing physical possession and not to mention thousands of assorted paper gold ETFs is certainly there.

After all, where else can it possibly be (certainly not in the 5th subbasement of 1 Chase Manhattan Plaza housing the largest gold vault in the world)

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Wed, 03/27/2013 - 19:02 | 3383479 ghengis86
ghengis86's picture

Possession is the law! Bitchezz!
And fuck you too Bernanke

Wed, 03/27/2013 - 19:06 | 3383502 DoChenRollingBearing
DoChenRollingBearing's picture

Buy physical gold from REPUTABLE people and take delivery.  Simple.

Wed, 03/27/2013 - 19:13 | 3383529 Hedgetard55
Hedgetard55's picture

WTF?  Ashley Judd declares she will NOT run for the Senate, and you Zero Hedge fools are talking about fucking gold? Where the fuck are your priorities, bitchez?

Wed, 03/27/2013 - 19:18 | 3383541 McMolotov
McMolotov's picture

Yo, unless it involves the flashing of her ta-tas on the campaign trail, a discussion about gold takes precedence.

Wed, 03/27/2013 - 19:19 | 3383547 Hedgetard55
Hedgetard55's picture

+55 brother!

Wed, 03/27/2013 - 19:21 | 3383556 jcaz
jcaz's picture

Scumbags in the physical gold biz?  In Florida, no less?  Shocker!

Wed, 03/27/2013 - 19:30 | 3383591 AlaricBalth
AlaricBalth's picture

Here is one satisfied customers testimonial.

"They called me up with some really hot story about how precious metals are the best investment I could make. They told me I would make a lot of money and they would be guarding my account to make sure I was protected. What these thieves didn't tell me was that out of the $100,000 I sent them they took over $35,000 for commissions right off the bat!"

Wed, 03/27/2013 - 19:41 | 3383620 Pool Shark
Pool Shark's picture



There's one born every minute...



Wed, 03/27/2013 - 19:44 | 3383633 nmewn
nmewn's picture

A fool and his money are soon parted...

Wed, 03/27/2013 - 19:55 | 3383658 mtomato2
mtomato2's picture

"...a fool and his money were lucky enough to be together in the first place."  Gordon Gekko

Wed, 03/27/2013 - 20:38 | 3383752 espirit
espirit's picture

Skimming from the big boys piece of the action get you more than a wrist slap.

Luckily, these dimwads aren't sleeping with the fishes.

Wed, 03/27/2013 - 20:50 | 3383771 FEDbuster
FEDbuster's picture

Just checked the gun safe again. my silver, gold, guns and ammo still there.  No counterparty risk, no rehypothication, no leasing, no fleecing, no Corzine risk, etc....

"If you can't stand in front of it and defend it with an AR-15, you don't own it."  Ann Barnhardt

Wed, 03/27/2013 - 21:02 | 3383815 rehypothecator
rehypothecator's picture

I'm not too impressed with the premise of this article. Or rather maybe with the conclusions drawn in the numerous posts. The fact that a judge found that the victims didn't own the metals they thought they had, could, on the one hand, be used to draw conclusions about whether any other third-party gold holdings are really holdings or not, but, on the other hand, could also be used as the justification for finding the defendents guilty of criminal fraud.  (Which, rather pleasantly, is what they would deserve in a just world, not so easy to find recently or locally.)  

Wed, 03/27/2013 - 21:09 | 3383838 macholatte
macholatte's picture


But don't worry: all the gold "held" by various brokers professing physical possession and not to mention thousands of assorted paper gold ETFs is certainly there. After all, where else can it possibly be ...


But, but, what about Mr. Sprott?

Wed, 03/27/2013 - 21:46 | 3383957 Ahmeexnal
Ahmeexnal's picture

Best way to protect your PMs is to store them in a timewell.

Thu, 03/28/2013 - 00:38 | 3384322 rehypothecator
rehypothecator's picture

The trouble is taking delivery of the timewell.  What company do you use for timewells?  

Thu, 03/28/2013 - 05:41 | 3384512 TwoShortPlanks
TwoShortPlanks's picture

When the West is forced to compete with the BRICS for Oil, on even terms, using Gold...well...FUBAR!

Thu, 03/28/2013 - 01:19 | 3384359 Professorlocknload
Professorlocknload's picture

Visions of this kind of thing are the main reason I'm not in Sprott's products. The other reason is trans-border activity scrutiny/confiscation.

I wouldn't take kindly to paying some Smoot Hawley clone tariff penalty to get it back, even if it was still there.


Wed, 03/27/2013 - 21:09 | 3383842 steve from virginia
steve from virginia's picture




Customers believed they were getting something for nothing.


Instead they were screwed.


Caveat emptor: if something sounds too good to be true ...


it is.

Wed, 03/27/2013 - 21:57 | 3383989 FEDbuster
FEDbuster's picture

Molon Labe.

Wed, 03/27/2013 - 22:19 | 3384073 Pegasus Muse
Pegasus Muse's picture

Go ahead DHS pukes.  Make my day.

Wed, 03/27/2013 - 23:37 | 3384228 Major Malfunction
Major Malfunction's picture

Your .. tank has a .. problem.  The barrel is taped off.

Thu, 03/28/2013 - 11:29 | 3385474 Pegasus Muse
Pegasus Muse's picture

It's called a Dust Cover. 

It's removable.  


Thu, 03/28/2013 - 06:10 | 3384533 10mm
10mm's picture

Or an AK.

Thu, 03/28/2013 - 09:21 | 3384991 FEDbuster
FEDbuster's picture

The AK or AR-10 would be my preference, too.  Ann Barnhardt prefers her pink AR-15:

or my favorite:


Thu, 03/28/2013 - 11:45 | 3385537 Prince Eugene o...
Prince Eugene of Savoy's picture

I love you Ann Barnhardt!

Thu, 03/28/2013 - 15:35 | 3386369 Long_Xau
Long_Xau's picture

The fool being lucky is obvious. Implying fiat money are lucky if even (or especially if?) a fool accepts them is a good one. +1

I believe honest forms of money and honest people attract each other.

Thu, 03/28/2013 - 07:22 | 3384633 caShOnlY
caShOnlY's picture

A fool and his gold is heavily armed.

Thu, 03/28/2013 - 09:16 | 3384978 FEDbuster
FEDbuster's picture

A fool and his fiat currency is disarmed.

Thu, 03/28/2013 - 10:17 | 3385219 masterinchancery
masterinchancery's picture

Probably more like five, judging from recent elections.

Wed, 03/27/2013 - 21:03 | 3383817 natronic
natronic's picture

If someone ripped me off for 35k with a phone call I would probably just shoot myself for being such and idiot....right after I sent $10,000 to the Nigeria prince in jail so I can collect my $10 million to cover my $35k loss.

Wed, 03/27/2013 - 19:43 | 3383626 salvadordaly
salvadordaly's picture

They did not mention anything about a boating accident either? C'mon guys get on board.

Wed, 03/27/2013 - 19:51 | 3383654 eclectic syncretist
eclectic syncretist's picture

Can't wait for Ric Scott to get all over this shit.  After all, he's spending more money to drug test welfare recipients than they get if they pass the test, so he must be going to go really hard on these assholes.

Wed, 03/27/2013 - 20:03 | 3383679 DosZap
DosZap's picture

After all, he's spending more money to drug test welfare recipients than they get if they pass the test, so he must be going to go really hard on these assholes.

Feds said NO NO to this testing it's a NO GO.

Wed, 03/27/2013 - 20:08 | 3383692 The Big Ching-aso
The Big Ching-aso's picture

Let's see.  Boca RATon, gold, silver, platinum, big deposits, loans, and funny sounding surnames.  What could go wrong?

Thu, 03/28/2013 - 08:45 | 3384829 Cacete de Ouro
Cacete de Ouro's picture


But Horatio Caine will save us? ......Won't he?

He is real, no?..... Ahh, man, don't tell me he's not real...?

F@#K, I'd better get my gold back from those swarthy looking individuals in that gold depository down on Brickell Avenue....


Thu, 03/28/2013 - 01:00 | 3384344 MsCreant
MsCreant's picture

I gave you green arrow #55.

Wed, 03/27/2013 - 19:24 | 3383567 Pareto
Pareto's picture

+1 Thanks for help bringing it back into perspective.  Its important not to get distracted during these difficult and trying times.

Wed, 03/27/2013 - 19:41 | 3383624 nmewn
nmewn's picture


Now if she had flashed and had gold rings stuck through her nipples we'd be right back on topic. She'd clearly be leveraging her assets for personal gain! ;-)

Wed, 03/27/2013 - 23:31 | 3384216 Pareto
Pareto's picture

Nice Nice "Here ya go", like, fuck, "it was sposed to be a secret, but, well, here ya go." ...awesome.

Wed, 03/27/2013 - 23:28 | 3384212 Pareto
Pareto's picture

+1  Ohhhh fer suuureee!  lol fuck, i don't know who down arrowed me.  shit i was being sarcastic.

Wed, 03/27/2013 - 19:45 | 3383640 Dr. Kenneth Noi...
Dr. Kenneth Noisewater's picture

10 years ago maybe.  Girl's gettin' old.

Wed, 03/27/2013 - 20:24 | 3383718 NoTTD
NoTTD's picture

Reminds me.  I need to get the old Primus LP out and listen to "Wynona's Big Brown Beaver".  Haen't heard that in a while.  

Thu, 03/28/2013 - 00:35 | 3384315 HulkHogan
HulkHogan's picture

That was funny.


Wed, 03/27/2013 - 19:15 | 3383535 Thomas
Thomas's picture

I'm sure all the bullion-hoarding banks that serve GLD have the gold.

Wed, 03/27/2013 - 19:51 | 3383653 DosZap
DosZap's picture

I'm sure all the bullion-hoarding banks that serve GLD have the gold

Yep, likely they do,BUT, one caveat, you will never ,ever get it placed into your hands.

Wed, 03/27/2013 - 20:55 | 3383797 edb5s
edb5s's picture

Likely they do not have it and also likely that you will never ever get it placed into your hands.

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