Two Additional Lawsuits Filed Against U.S. Gold & Silver

There are now at least three investor lawsuits pending against U.S. Gold & Silver, a Portland precious metals firm that claims to have been serving investors since 1972.

The total damages claimed in the three lawsuit add up to almost $1 million.

One lawsuit in Washington County Circuit Court we reported on yesterday seeks $200,000 in damages; one also seeking $200,000 is in Multnomah County Court, and the third and most recent was a $474,000 federal lawsuit filed on March 11 in U.S. District Court in Portland.

There are a couple of perplexing issues swirling around the cases: First, it does not appear that U.S. Gold & Silver was registered with either the Commodities Futures Trading Commission or with state or federal securities regulators. That lack of registration makes it difficult to determine how many investors U.S. Gold President Lawrence Heim had—or how much money investors placed with him.

WW has reviewed investor contracts Heim issued as far back as 1997. The interesting aspect of the contracts is that one of the options Heim gave investors appears to protect them from any possibility of losing money on their purchase of precious metals. Of course there is no investment, particularly not in volatile commodities such as gold or silver, in which investors can be guaranteed not to lose money.

The way the investments worked, as detailed in a federal lawsuit [PDF] filed on March 11 by some investors from Pennsylvania, was that investors gave Heim $474,000 to buy bags of gold and silver coins. They say they never actually saw the coins. And when they later asked to take delivery of the coins, Heim "simply apologized and said he could not talk to [the investor]."

In the Multnomah County court case, Vancouver investor Donald Fazzio seeks $200,000 from U.S. Gold & Silver. He invested with U.S. Gold in October, according to his lawsuit. Unlike other investors, he wanted to take delivery of his coins right away but he says Heim took his check and never came up with the gold.

A final puzzling aspect of the investor lawsuits: Heim has been quoted in the media as expecting massive increases in the price of gold. He's been right and the investors who thought they bought gold and silver through him thought they had ridden the bull market, with some seeing their original investments increase by more than a factor of five. So where's the money? Heim remains unreachable and his lawyer, Martin Meyers is not talking.

WWeek 2015