Kitco Charged With Massive Tax Fraud Scheme

[EE_]

Kitco Charged With Massive Tax Fraud Scheme, Business Viability In Question
Submitted by Tyler Durden on 06/10/2011 09:37 -0400

Precious Metals Tax Fraud
http://www.zerohedge.com/article/kitco-charged-massive-tax-fraud-scheme-business-viability-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.

[ShortJohnSilver]

Meanwhile ScotiaBank which fraudulently charged clients storage fees to store non-existent silver, is still in business and bigger than ever.

[Serpo]

Bump...........

[Twisted Titan]

The Petty Theives are Hung but the Big ones we elect to High offices......

[osoab]

What happens if Kitco goes under and you had some of that Rhodium Sponge they sold?

[gunDriller]

What happens if Kitco goes under and you had some of that Rhodium Sponge they sold?

then - you're Sponge-worthy ?

[keehah]

Nice to know it appears the government is going after actual theft from the government, rather than say taxes for gold holding its value as governments devalue fiat 'money'.

We here all know Nadler was corrupt by his lies to prop up the fiat system talking down gold short term when it helped the system. The government allegations suggest the company may BS more than just the goy.

http://www.theglobeandmail.com/report-on-business/gold-dealer-in-crosshairs-of-quebec-tax-agency/article2055402/

The Montreal-based trading and research company, which bills itself as one of the largest retailers of precious metals in the world, and another Montreal company, wholesaler Carmen International Inc., are among more than 100 companies and dozens of individuals named in Revenue Quebec allegations of a sophisticated false-billing operation.

Revenue Quebec said more than 175 investigators swooped down on businesses, homes, accountants’ offices and other sites on Thursday, with more than 70 search warrants in hand...

The tax agency alleges that two separate networks used artificial transactions involving a cycle in which pure gold (which is not taxable) was converted into gold scrap (which is taxable), then shipped to a refiner to be once again transformed into pure gold.

The transactions were allegedly used to make phony claims for refunds on sales taxes on the gold that was rendered into scrap.

Revenue Quebec alleges that Kitco played a key role in moving the gold through the various stages of the cycle.

Perhaps Kitco was just "used" by those 100 other companys?

I'll suggest this is a problem of the government's own creation though. This could not have happened if scrap gold was not taxable.

Perhaps this little Kitco 'game' will result in the government changing the rules.
The government will just make all gold taxable due to the 'Kitco problem'.

Thankfully it seems that the EU taxes gold as Canada does, so I expect Canada will not change as our treasonous leaders work to make us all EU.

http://europa.eu/legislation_summaries/taxation/l31012_en.htm

Traders in investment gold have special obligations designed in particular to prevent the opportunities of tax fraud resulting from the dual use of gold (industrial and investment gold). These require them to keep account of all substantial transactions in investment gold and to keep documentation to allow identification of customers for a period of at least five years.

[Serpo]

Late word out yesterday that the crackdown of the gold and silver manipulators has begun. Kitco, one of the partners in Gold and Silver Manipulation Scam, is being taken out by the authorities. It’s your fault if you have any metal in their paper games…

Revenu Quebec Investigates Gold Fraud
http://business.financialpost.com/2011/06/10/revenue-quebec-investigates-massive-gold-fraud/

There will be a lot more of this as the veil comes off the metal market rigging operations. Kitco was running a gold and silver ponzi scheme that was started by none other than the infamous Jon Nadler.

Nadler was the inventor and promoter of the Pooled Metal Investment accounts. He started this at Bank of America then implemented it at the Perth Mint, Kitco and the Royal Bank of Canada. The idea was that since everyone doesn’t cash in their gold and silver certificates at the same time you could sell allocated and unallocated pooled account certificates without buying the actual metal. You then take that money and invest it in some other interest bearing account and you get the interest gains.

Like any ponzi scheme it only works when people don’t try to withdraw their investment. Once they try to cash in certificates for real metal the game is over.

This is where we are today…BUT WATCH WHAT HAPPENS NOW!

There are many forms of paper metal ponzi schemes including ETF’s, certificate programs, pooled accounts and even the COMEX and LME exchanges which are leveraged 100-1 paper metal vs the deliverable ounces.

THE CON WILL FAIL FAST AND TAKE THE ENTIRE GLOBAL MONETARY SYSTEM WITH IT!

If you’ve been on the Road to Roota for long enough you KNOW that the ONLY way to survive this global meltdown is by holding PHYSICAL GOLD AND SILVER IN YOUR OWN POSSESSION!

The time for explaining the reasoning behind this is over. If you still don’t get it you should read the Road to Roota ARCHIVES here:

http://www.roadtoroota.com/public/department36.cfm

The breakdown of the paper metal infrastructure has begun. With it will come the moonshot for physical metal, the destruction of paper metal to zero, the nationalization of mines and warehouse metal and ultimately the end of un-backed fiat money.

It was always the plan.

Best of luck to us ALL!

Bix Weir
www.RoadtoRoota.com

http://www.tatumba.com/blog/archives/5891

[Serpo]

The latest scandal involving Kitco doesn't add up.

"In a statement released yesterday, Kitco Metals, Inc. categorically denies all of Revenu Québec’s allegations that they are guilty of evading sales tax due on their purchases of precious metal scrap.

The tax agency, Revenu Québec, has launched a massive investigation which is reported to involve 175 investigators utilizing 70 search warrants to scrutinize the activities of more than 125 companies including Kitco Metals, Incorporated. The “tax scheme” being investigated has reportedly cost the government of Québec more than $150 million in revenue." (Source)


Even more startling is the fact that the company is requesting that the Court place it in "receivership" so that it can continue "business as usual". (Ibid)

Sometimes a little fraud can be used to cover up an even bigger one. I hope this is not the case with Kitco, but I cannot help expressing my concerns. One product that Kitco offers is its Kitco Pool Accounts. Investors buy gold or other precious metals that are purportedly stored in Kitco's vaults. They have the option of withdrawing their metals, or settling for cash, but, since most are IRA qualified, they don't do either. Instead, investors rely on Kitco's word that the physical precious metals are actually in the company's possession. Just another version of "Trust Me." People get burned through misplaced trust.

Suspicious minds are wondering if this government crackdown will be used to bankrupt the company and then settle the pool accounts for pennies on the dollar. This is why I advocate taking possession of your precious metals and not leaving them in some third party's possession. If you don't have it in your hands, its not real.

What makes me even more nervous, is Kitco's relationship to Barrick Gold. John Nadler, Kitco's Senior Analyst and Guru, is also sponsored by Barrick Gold. (Source)

"Who is Jon Nadler? And, why is he the resident Kitco “disinformation specialist”? You’ll seldom find a negative article about gold investing that he isn’t quoted in, or a negative article about gold that he doesn’t reference. Why? Is he stupid, dishonest or both? You be the judge.

In Nadler’s daily Kitco missives, there are negative gold issues that he hammers with regularity...

Recently, Jon Nadler has resorted to further insulting serious gold investors by calling them “Radical Extremist Gold Bugs.” Why would a guy, supposedly a “gold analyst” for a precious metals seller (Kitco), resort to ridiculing gold investors by calling them childish names? "

Sure, Nadler will tell you that you should maintain a 5-10% investment core of gold. That’s timeless wisdom, the wisdom of our forefathers, not Nadler's wisdom. Where else would Nadler suggest that you invest the remaining 90-95% of your wealth? Why, in the usual “paper” investment holdings that Bernie Madoff would’ve also approved of. Stocks, bonds and even real estate have been LOSERS in recent years and are LOSERS going forward." (Source)


So why would Kitco hire a guy like Nadler as their chief analyst when he is apparently misleading both gold and silver investors with such historical frequency? Nadler was chosen to keep people in worthless paper assets like stocks, bonds, etc. He is nothing more then a shill for the Satanic Psychopaths that worry more about an alternative currency then they do about God.

Making people think that they own silver, when their investments remain in paper, is just another way to keep precious metals out of the hands of the American public.

http://www.moneyteachers.org/Kitco+Fraud.htm

[keehah]

Meanwhile, Jon still continues to do his 'other' job ........

MSN.com June 10, 2011 (http://money.msn.com/market-news/post.aspx?post=f8c7e71a-b6a4-44a3-bf08-ca90836f4fa2&_nwpt=1)

Jon Nadler, a senior analyst at Kitco.com, thinks both metals have more room to fall. "We certainly haven't had a sizable 30%-plus correction going back to the days of 2008, so clearly there would be room for a pullback to the low to mid-$1,100's eventually." Nadler doesn't see this kind of correction during summer. It would also push silver to the low $20s.

Nadler takes a lot of heat for his bearish stance, but he isn't the only one issuing conservative price targets. Mark Arbeter, the chief technical strategist at Standard & Poor's, is calling for gold prices to hit $1,250, a more than 18% correction from current levels, within the next couple of months.

"When you look at gold and silver, one has to first look at what will happen with the dollar." Arbeter thinks that the U.S. dollar index has put in an intermediate-term bottom and that it could rally to as high as $80-$82. More importantly, Arbeter thinks all the potential headwinds -- like global rate hikes, which boost foreign currencies and weigh on the dollar, and low interest rates from the Federal Reserve -- are already priced in.

Longer term, however, Arbeter is bearish on the dollar: "I think once this correction ends . . . we'll go to $2,000-plus on gold." Silver prices, Arbeter says, could hit $75 an ounce.

[jbeck57143]

So maybe this wouldn't be a good time to try to do what this person did with their Kitco pool account? (This is from GIM2) The idea is to get a balance transfer check from a credit card company, that has 0% interest for a year, and use it to buy pms, then, after that's paid for, when the price goes down, buy some more--only buy 20% less than before, then during the 10 days you have to pay Kitco, wait for the price to go up, then sell enough metals from before to pay for what you just bought--do that 5 or 6 times. If it works as well as they say, it could have been a good way to make some money to buy gold and silver with. They explained it more thoroughly in a private message. At one point they started with 26k and ended up with 90k. Here's what they posted on GIM2:

This is from April 30
http://www.goldismoney2.com/showthread.php?17100-Just-lost-my-job...beggars-can-t-be-choosers-so-I-might-apply-at-Walmart.-Advice&highlight=beggars

Want an alternate revenue stream? Max out all your credit cards, open a Kitco pool account with it. Buy as many ounces of silver as you
can. Then create additional margin (10 business days to pay) by stacking silver buys, reducing your buys by 20% each time in case of a
drop in price. Do this four to six levels deep and sell just enough silver to cover each buy as it becomes due for payment. When you
unwind all your buys have Kitco cut you a check for the profit. Rinse and repeat. If silver tanks drastically leave the credit card
company (JPM, Citi, BofA) holding the bag, since they are the ones who created this mess. No moral dilemma what so ever.

***********************************************
This is from Oct 5, 2010:

http://www.goldismoney2.com/showthread.php?9758-Stab-the-Beast-with-a-Silver-Dagger!&highlight=Citiccard

I borrowed $13,000 on my Citiccard credit card at 0% interest, which doesn't expire until October of next year. I've put it to work
since the begining of September in a Kitco pool account, switching between Gold, Silver and Palladium or holding a combination of the
three. I've netted $2500+ so far leveraging the $13,000. That's a 19% return I think. With the pool account you can stack your buys and
you have 10 business days to pay, so you buy on dips and then pay for your buys after the metal goes up by selling off ounces you
already have that have increased in value instead of adding in new money. I am making money now, but I did this back in '08 and got
caught in the crash and lost a lot of money, so any gains I'm making now are really just recouping my losses. The '08 crash was quite an
education, so now I am a much more informed investor (less greedy) and have gone to cash since Silver hit $23.50 and gold $1350.

[Large Sarge]

I do not know what to make of all of this

like is it a warning shot for other dealers?

is it a legal way for kitco to default on its pooled accounts, like the govt "seized all the assets" (even the imaginary ones), and then when bankruptcy is declared, they all get paid in paper.

its another kind of gold & silver heist

this J.P. Morgan silver default is going to require something drastic, at a minimum they are going to want to "steer events" their way.

if they just J.P. Morgan go down in flames, the potential problems are huge.

and these folks want to profit, and gain power from any crisis....

[keehah]

Kitco Metals Inc. in creditor protection (http://www.ottawacitizen.com/business/Kitco+Metals+creditor+protection/5075966/story.html#ixzz1SFvsQzIo)

OTTAWA CITIZEN JULY 9, 2011

Faced with tax claims of more than $300 million from Revenu Quebec, embattled Montreal-based gold trader Kitco Metals Inc. is officially in creditor protection until July 27. Superior Court Judge Mark Schrager this week granted the application by the company and its monitor, RSM Richter. It's spared from any legal proceeding until it submits an offer to creditors, the largest of which is Revenu Quebec, which has outstanding assessments against it of $227 million and $85 million. Kitco, which is contesting the tax assessments, can continue to carry on business under the court ruling. The company was one of more than 100 targeted in a Revenu Quebec investigation that last month resulted in searches and seizures at 70 locations in and around Montreal. The tax department said a false-billing scheme in Quebec's gold market had snowballed into a fraud of more than $100 million. Kitco has denied doing anything illegal.

_____________

Kitcommentary from Kitco Metals Inc. - "Rome is Burning" (http://www.investorideas.com/news/2011/mining/07121.asp)
July 12, 2011 -Jon Nadler
[re: Euro bond market]

And this time, investors won't have a safe haven to which they can flock as they did during collapse of 2008. "There will be no place to hide," said McBride. "Treasuries will no longer be safe in the event of a default." Ditto real estate, gold, and farm land. In short, there will be no flight to safety because no asset will be safe. "Even cash might not be a safe haven." No exit. No safety net. None.

[Serpo]

http://www.p-p.com.au/blog/images/blogs/i64-m-73979775.jpg

NADLER





he was always into metal , wonder how he feels about steel........just a thought.......

[mick silver]

dont they hold your gold and silver for you .... just thinking