Precious Metals Go Missing
Last year, Kelly Campbell, working on behalf of the American government, was sent to the First State Depository Co. LLC storage house to investigate missing assets.
Source: Harold M. Lambert/Getty Images
Campbell was sent there with a small team of U.S. marshals to check the contents of the warehouse, which, on paper, held over $140 million in precious metals such as gold and silver. Yet, to the surprise of the team, over half was missing.
Customers Persuaded to Use First State Storage
According to records, over 2000 people stored their gold and silver assets in small safety deposit boxes at First State.
Source: Freepik
The customers stored their precious metals here in an attempt to bolster their 401(k) or IRA accounts. Due to federal tax laws, the precious metals needed to be stored in a secure place, and for the citizens of Delaware, First State seemed like a reputable place to do so.
Life Savings Gone in a Flash
Unknown to the customers, many would never reap the benefits of their savings, as the assets would vanish from the storage vault.
Source: Freepik
“Most of these investors were elderly people,” Campbell told The Philadelphia Inquirer. “They were investing their savings. It’s tragic.”
Hope Not Lost for All Retirees
While the case of the missing gold and silver dumbfounded Campbell and his team, they recovered around 1,000 of the boxes. This totaled $64 million, or just under half of the recorded amount.
Source: Freepik
Yet, the other $76 million appears to have vanished into thin air. The boxes in which the gold and silver were supposed to be were mostly empty. Yet, some had a small amount of silver, and others contained paper notes, including poorly scribbled IOUs.
First State Under Forced to Pay Restitution
After a long string of customer complaints centered on missing gold and silver, the First State Depository was placed under investigation.
Source: Freepik
Campbell and his team’s findings led to the court ruling that First Trust must storage pay back all customers who reported missing assets. The company was also given numerous fines.
Robert Leroy Higgins Under Investigation
First State was founded by Robert Leroy Higgins, a man who has spent over 40 years as a gold and silver tradesman.
Source: Freepik
Now, he may spend the next portion of his life in prison as he faces two fraud charges. As of this week, Higgins is currently awaiting trial.
Gold Hidden in the Home of Higgins
Higgins’ home was searched last summer after a federal court approved the warrant. The investigators found an unusual bag of gold coins above his bedroom ceiling.
Source: Scott Olson/Getty Images
The gold was worth approximately $72,000 and was a long way from the missing $76 million in precious metals.
No Paper Trail for Missing Assets
According to available records, the full amount of restitution to the customers who lost their life savings still hasn’t been paid.
Source: Freepik
Campbell explains why it’s difficult to trace the missing assets. He said, “When you are talking about coins or silver bars, when they’re missing, there’s no trail.”
Customers Shocked by the Loss
Customers of First Trust, such as Victor Martel, a dentist from Florida, were shocked to find out their assets had vanished.
Source: Freepik
Martel had bought around $160,000 worth of gold coins in 2014. In the next seven years, his investment doubled in value, yet instead of $320,000, the dentist only received around a quarter of his initial investment back. He learned his gold was simply gone.
First State Has Damaged Industry’s Reputation
Unfortunately, the scandal surrounding First State has affected the trust of similar companies in the eyes of the public, according to others working in the same industry.
Source: Freepik
“We need more people to get onto people like him, because they are a thorn in our side,” said David Crenshaw, executive director of the Georgia-based National Coin and Bullion Association.
