The Internet-based digital gold currency industry is once again under scrutiny, after one of the co-owners of e-Bullion was murdered earlier this week in a Los Angeles parking garage. Police have not named any suspects or identified a motive for the killing, but the Los Angeles Times reports this morning that e-Bullion was already under investigation in an "ongoing FBI fraud inquiry."
Last week, the owners and top executives another digital gold currency firm, e-gold, pled guilty in a federal money-laundering trial and agreed to submit to U.S. regulatory oversight.
Using Internet transactions, digital gold currency companies take customer deposits and match them with the equivalent amount of gold supposedly stored in vaults. Many of the companies are unregulated and/or incorporated in other countries to avoid U.S. financial laws and shield the identity of clients. The firms also attract customers who don't trust greenbacks or other paper currencies. As noted by the LA Times article:
"Such arrangements typically appeal to people harboring strong doubts about the stability of the international monetary system and who believe they are insulating their wealth from a global collapse by tying it to the value of gold."
Digital gold currencies have also been used for money laundering and other criminal activity, such as a kidnapping last month of the brother of a Nigerian soccer player.
Background:
- e-Bullion's lawyer blasts new government claims, says seizure of funds "not authorized"
- Feds drop charge against James Fayed, company still under indictment
- e-Bullion co-founder charged with murder
- e-Bullion's lawyer calls government's actions "extreme"
- e-Bullion update: Fayed's lawyers say feds seized $24 million in assets
- Why use e-Bullion? An investor explains
- Court papers indicate James Fayed had absolute control over e-Bullion
- Daughter seeks control of mother's ownership interest in e-Bullion
- Not all e-Bullion customers are worried by outage
- e-Bullion still down for "routine maintenance"
- e-Bullion co-founder jailed on money transfer charge
- Report: Feds investigating e-Bullion in fraud inquiry
- E-Gold directors escape jail time with guilty plea
- Where are they now: Flooz
Comments
Ian: Customers of electronic payment systems like e-Bullion should be aware that adversaries might get their e-transaction records by subpoena. --Ben http://hack-igations.blogspot.com/2007/09/endless-investigations.html
Jezzzz, Ian, so negative!
The fraud which the Times mentions took place in the late 1990-2003, as far as I can tell and the guy running it was a real nut job, Abdul Tawala Ibn Ali Alishtari, a/k/a "Michael Mixon and connected to e-bullion at all. His company was a ponzi type High Yield Scam (Flat Electronic Data Interchange FEDI) and it appears he was just using e-bullion to accept funds during his solicitation. That is what I get from the material.
http://www.osc.gov.on.ca/Enforcement/Proceedings/SOA/soa_20030611_anders...
This imprisoned "Mixon" character, who was running the fraud which crossed Canada and even as far away as, has long been in jail on some other very serious charges. Let's try not to wrongly slam e-bullion during this sad time.
The e-gold company is currently alive & well. I accepted about $800 in e-gold payments yesterday, paid my email account for a year and paid for my hosting all still using e-gold. Despite the troubles, the company is now creating a 100% agreeable account platform to meet regulation in the US. The updated business will compete directly with PayPal--- it's very exciting to see growth like this!!!
Also, the brother of Joseph Yobo, the Nigerian soccer player was returned unharmed and no ransom was paid. (thank goodness home safely)
Our Digital Gold Currency industry has had a rocky month but is still very strong. In case you havn't noticed, gold has been going up nicely in price, which we can compare to all US dollar investments which are dropping like a rock! DGCs are growing into main stream global finance and now being recognized as a great way to conduct business online. I'm coming back here, in 6 months and I'm going to ask if at that time you would rather have a saving account with US paper money or gold. My money's in gold.
Mark
Mark: Thanks for your comments, Mark. Actually, the language in the LA Times story was ambiguous as to whether the FBI investigation was related to the Mixon case. It's not clear if that's tangential background information, or this case forms the heart of the unconfirmed FBI investigation into e-Bullion.
I agree that real gold has been a good investment for many, but in order for DGCs to be considered part of a "mainstream" global finance system and "a great way to conduct business online" there will have to be laws and a regulatory framework surrounding these businesses and the transactions they perform, to prevent abuse and crime, and to protect customers, investors, partners, and the businesses themselves. e-gold's stated intention to submit to U.S. regulations is an important step in this direction.
Ian Lamont
Managing Editor
The Industry Standard
Ian,
Jim Fayed was arrested on Friday at his home outside LA. His lawyer commented in a sfgate article that the charges were related to operating an unlicensed money exchange or money transmitter. He will appear in court next week and I'm sure we'll hear more.
Mark
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/08/02/state/n11540...
Mark: Thanks for the tip. I'll check it out.
Everyone: Based on Mark's tip, I have a follow-up post: e-Bullion co-founder jailed on money transfer charge. Note that prosecutors are making a connection between the unlicensed money transaction charge and the murder case.
I wired some money to e-bullion on Aug. 1st. Do you think we will have access to our money? Or get our money back?
I was just wondering what the "latest" news is concerning the E-bullion situation. I have a friend who wired $5330 into e-bullion the DAY of the murder. Can we get in touch with the FBI or somebody that can send her money back, or can she kiss it goodbye? I would appreciate any direction.
Thanks,
Connie Holland
Hi Ian,
Unfortunately, I have a substantial amount of gold in an account with e-bullion. Has anything been establish for me to get my property back that you are aware of?
-Denis
Denis: I am unable to help anyone recover their money from e-Bullion or federal authorities, and I am unaware of any process to have funds in e-Bullion accounts returned to their rightful owners. However, I will report this news if it comes to light. I would suggest keeping an eye on the list of most recent articles about e-Bullion, published at the following link:
Latest e-Bullion articles
Ian Lamont
Managing Editor
The Industry Standard
What? Oh my God! I have several thousand in there and thought it was safe! E-Bullion was in business for years and did business by the book from all impressions I got.
Exchangers won't let any one out exchange with out verifying identity so that is pretty much the same as any financial insitutions standards.
One thing for sure is the Government has now stolen our money!
By closing e-bullion down the government is stealing millions and perhaps even a billion dollars. What's next? Is this just a small test run before they start using the same excuse to go after major banks?
After all there are lots of criminals who use CitiBank bank accounts to launder money. I wonder how the public will react if they government did the same action against CitiBank?
This is unacceptable. It's time to get all money out of the US Gernment reach and switch to foriegn currencies. Or bury gold bullion in your basements!
I have a lot of money in e-bullion. Any news on how we are to get what is rightfully ours?
they are tied to the big banks chase, bank of america, citi, in some way while the exchange sells long positions for as much as possible the banks short positions winding up with your money and the cftc does nothing. that is global bullion exchange
To Ian and Stan above, Please help, I have been a conned global bullion exchange in lake worth fl. as well. I was told i could get 1000oz silver for 8000 when the market was at 18 oz. because they had an institutional order so i could get a big discount. Later i find out i was charged a 15% commision on the full metal value than i find out it was a margin account that the metal had to increase in value over 3.50 dollars to even break even.non of these facts were disclosed up front. when the metal fell in value 1.35 i was told i was in margin and had to send in more money or my account was a total loss. when i tried to sell out i was hung up on. I suspect no silver exists and this is a fraud and a ponzi scam. please send me the contact so i can report this fraud to the proper authorites. i would not want others to get in to this if somethings to good to be true....it is.......
I was also contacted by Global Bullion Exchange. Is this a legitimate business? I can't find any information on them besides their own website. Obviously, I'm not hearing good things about them.
pammy was a good friend end mother. Honest too. i hope the ex that killed her gets life. Nothing! His lies are untrue!!!! If i hear one lawyer lie! I will did . Like pammy again. Crying !! She called my / our best friend too hide, From that evil monter. call me w/ next court date .*858-729-3062. 949-6424062. Zgchar@hotmail.
I was also conned by Global Bullion Exchange. I spoke with someone at the CFTC today and apparently they have been scamming people for years. They structure the fees so that it is nearly impossible to ever make money (15% commission, finance charges, storage fees, etc.). Unfortunately, the CFTC doesn't have jurisdiction because they trade physical silver and not silver derivatives (futures and options). Best thing is to report them to the Florida Attorney General's office. A class action lawsuit is also a possibility.
Global Bullion Exchange, LLC
It is unfortunate that this client feels the way they do. Every effort is made by Global Bullion Exchange, LLC to insure each client's account is properly handled and any client issues are resolved immediately. Unfortunately though as with every investment, there is always the potential the client could make or lose money as nothing is ever guaranteed. Global Bullion Exchange, LLC only handles non-discretionary accounts, so if the market turns and the client is unreachable, we are unable to place a sell on their account. This prevents a client from being “churned" simply to generate a commission. Because of this, our brokers stay in constant contact weekly with all existing clients and it is the client's responsibility to work with their broker in managing the account. While we do earn a commission for our work, it is a set one-time fee which allows unlimited trading of their current metal position for the life of the account. This saves the client a large sum of money as each account will have numerous buy and sell transactions. To the the post of Pablo and R. laser; We sincerely regret that you had any concerns with our company and would like to be given the chance to rectify the situation if possible as well as explain what our total commissions were as there seems to be a misunderstanding. Please contact us at your earliest convenience.
ya ya, it is not about fraud or anything the US just try to get there hands on the money so they can STEAL it like they tried with egold and many other once in the past, with egold they even came up with fake evidence just to get there hands on the gold so who is the real THIEF here? yep you got it right the DAMN USA are the crooks like always, and they will probably do it a lot more because the "so called" big guys (country number 1 bullshit) just go for the gold the only thing the USA can do is hiding themself with excuses it is a damn country and people need to wake up for once US is not number 1 they the real crooks look now with there pathetic financial problem, they can not even take care of there own money. everything in big, big prizes, big words now you got it BIG FINANCIAL problem and guess what the rest of the world can go with them in there problems USA is bullshit they crooks stealing money from other people in the world by bringing down some company like ebullion what does ebullion has to do with a murder? lol they just need an excuse to get there hands on the money pathetic. pathetic country and guess what they going to do with the money they going to buy weapons to make another war LOSERS
they always let it online for a long time till there are not many people coming to the website to see or there is an update and than it is gone and you never got a thing like with eco corp in the past stating you will get a check never got it never will because US placed it in there pocket. still need to laugh when i see the images of 9/11 losers sad for the people but good for to learn a lesson
Thanks for making this information available. Do you have any suggestions regarding how one might get a handle on how to track this situation? I would lke to follow what they are doing with my money. Thanks for your help.
Chuck Kemp
Hi Stanley Steger,
We are looking for a place to invest a friends money, so we are thinking precious metals.We are looking toward Global Bullion Exchange,LLC. That LLC bothers me because you have NO court recourse if anything goes wrong. I would appreciate a response via my email ; ladygeronimo32@yahoo.com,
which would be kept confidential if you wish.
Thank you,
Miriam Rose
Readers: There is a new update:
e-Bullion's lawyer blasts new government claims, says seizure of funds "not authorized"
You are welcome to comment below the new article. Please note that I cannot give any advice on how e-Bullion depositors can recover their funds.
Ian Lamont
Managing Editor
Industry Standard
MY ACCOUNT IN E-BULLION : E71677, TRANSACTION ID FOR THIS WITHDRAWAL ORDER# W91740909-CK, SAT, 26 JULIO 2008 05:12:54 (GMT), USD$ 250.00
ADDRESS: 16440 NW 84 AVE, MIAMI LAKES, FL, 33016, US-UNITED STATES.
NO RECIVED .
CORREO ELECTRONICO: cubanesty69@yahoo.com
I CAN RECOVER THEIR FUNDS
Hello!
I see, the E-bullion is very deep. Can anybody tell me: One and half year ago I transfered 1000 USD to E-bullion with Theebullionexchange, which is still under FBI investigation ( i hope, because I didn`t know that thebullionexchange is down, when I transfered money to E-bullion) I don`t get money to E-bullion, and now I don`t know what is going on :(( I hope somebody help
Everyone: This thread has been closed -- too many people talking about HYIP schemes which the Standard does not condone or offer support & advice for.
Ian Lamont
Managing Editor
The Industry Standard.
Readers: There are two major developments in the e-Bullion story, located at the following locations:
Copies of the relevant court documents are linked from the articles, and there are many references to the HYIP schemes involved in the case, including 4fxtrader.
I am closing the comment thread here, but you are welcome to continue the discussion in the comment threads for the two new articles.
Ian Lamont
Managing Editor
The Industry Standard