February 22, 2024 Breaking News, Latest News, and Videos

Santa Monica-Based Superior Gold Group Agrees To Final Judgment And Injunction:

For the second time in the past four months, Santa Monica’s Consumer Protection Unit has obtained a stipulated judgment and injunction against a nationally advertised precious metals dealer.

City of Santa Monica and L.A. County prosecutors have reached a final agreement with Superior Gold Group and its owner, Bruce Sands, more than one year after a court ordered the business placed under receivership and its accounts frozen.

Under the agreement, the court has entered a final judgment which requires Sands to pay $2 million in restitution to former customers, including an up-front payment of $200,000.

The case marks the second time in the past four months that Santa Monica’s Consumer Protection Unit has obtained a stipulated judgment and injunction against a nationally advertised precious metals dealer.

The judgment was signed by Judge Cesar Sarmiento of the Santa Monica Superior Court.

Under the judgment, Bruce Sands must pay between 20 percent and 25 percent of his future net income toward customer restitution.

Superior Gold Group was a national precious metals dealer based in Santa Monica and Woodland Hills, California.

In December 2010, the Santa Monica City Attorney’s Office filed a consumer protection lawsuit against Superior and its owner Bruce Sands, along with the Los Angeles County District Attorney’s Office. The suit claimed that the company was taking customers’ money for coins but providing nothing in return.

Prosecutors then obtained a preliminary injunction that froze all assets of Superior Gold and Sands. The court also appointed a Receiver, attorney Dean Pucci, to take control of the business and of Sands’s finances. At that time, Superior Gold’s operations were stopped and the business was effectively shut down.

During the next year, the Receiver and Santa Monica’s Consumer Protection Unit investigated Superior’s and Sands’s financial records and searched for assets that could be used to reimburse customers who had lost money. However, investigators were unable to locate any substantial assets.

“This result makes the most sense for consumers, and for law enforcement purposes,” said Adam Radinsky who heads Santa Monica’s Consumer Protection Unit. “We suspected going in that Sands had few remaining assets. Our main goal was to stop the wrongful practices in their tracks. We achieved that with the business being shut down and placed under court receivership.”

“With this settlement, we get what little money is available, directly to consumers, and far sooner than if we had gone to trial,” said Radinsky.

The civil lawsuit, filed under California’s Unfair Competition Law, alleged that Superior and Sands committed unlawful, unfair and fraudulent acts against consumers using three main practices:

– Inducing customers, through false and misleading statements, to buy more expensive coins instead of the basic gold bullion that customers typically wanted. This included misleading consumers into believing that the U.S. government may confiscate all gold bullion from consumers, and that certain higher-priced coins would be exempt from such confiscation.

– Charging prices far higher than fair market value for the coins while concealing that markup through false and deceptive pricing practices.

– Taking payments from customers for coins but failing to provide the coins.

The trial was to take place later this year.

More than 250 former customers of Superior Gold had filed complaints with Santa Monica’s Consumer Protection Unit. Most claimed that they never received the promised coins after paying substantial amounts of money to Superior Gold. Some customers filed their own lawsuits against Sands.

The judgment requires Bruce Sands to pay $2 million toward customer refunds. Sands must pay $200,000 up front. He then must pay 20 percent to 25 percent of his net income every year until the judgment is paid in full. Only those customers who have already filed complaints with the City Attorney’s Office, are eligible for restitution.

Under the court judgment, Superior Gold’s customers who lost money may also be eligible for a potential tax write-off. In the wake of the Bernie Madoff scandal, the IRS created a new tax exemption for fraud victims. The Superior Gold customers will be eligible to claim their losses as a tax write-off, less any restitution payments.

The court judgment also includes an injunction that prohibits Sands from owning a precious metals business, or from using any false or misleading advertising.

Superior Gold is the second national gold coin dealer against whom Santa Monica’s Consumer Protection Unit has obtained a settlement in the past four months. On February 22, 2012, Santa Monica obtained a stipulated final judgment and injunction in a consumer protection case brought against Goldline International, Inc., which is also based in Santa Monica.

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