Government wants receiver appointed to return e-Bullion customer assets

The federal government hopes to have a court-appointed receiver handle the return of assets to e-Bullion.com account holders, according to several users of the now-shuttered service and recently filed court documents.

The FBI has already been contacted by scores of account holders who have been unable to access their funds since e-Bullion went offline last August following FBI and IRS raids on the California offices of e-Bullion and its sister company Goldfinger Coin & Bullion. On Monday, an FBI special agent filed a declaration with the U.S. District Court for Central California that stated she had received more than 80 claims from e-Bullion account holders. The names of the account holders were redacted, but two former customers confirmed with the Industry Standard that they had been in contact with the same FBI special agent, who instructed them to submit proof of account ownership. 

One of them was Bryan Nevins, an e-Bullion account holder who invested in more than 1,000 ounces of silver through the company. In January, Nevins said that the agent told him to mail in proof of ownership, including account records and wire transfer documents. The agent also requested a letter explaining whether he had a simple bullion investment, or if he was using the account as part of a high-yield investment program (HYIP).

Another e-Bullion user who requested anonymity showed the Standard a copy of an email he received from the same agent. Besides detailing the types of records which would serve as proof of account ownership, the email also said that authorities aimed to return deposits to account holders: 

"You will be added to the list of those waiting for restitution in this matter. At this point we are attempting to get a Receiver appointed to handle the distribution of money back to investors."

The email did not mention HYIPs. When contacted by the Standard, the FBI agent declined to provide any additional details.

The FBI's interest in HYIPs relates to the government's contention that e-Bullion was a conduit for fraudulent online activities. The agent's declaration stated that most of the 80 account holders' funds were transmitted through e-Bullion and an associated company called Goldfinger Coin & Bullion to "facilitate one or more fraudulent schemes." One of the HYIPs described in court documents is 4fxtrader, which allegedly promises a 105.7% return in seven days. A separate motion filed by the U.S. Attorney's Office on February 9 called the investments "Ponzi schemes." The same document said that "a receiver or similarly objective third party ought to be appointed" to handle the accounting and disbursement of seized assets.

e-Bullion and several associated gold-trading companies were raided between August 4-8. Federal agents seized between $20 and $24 million in bullion, coins, money orders, cash, and cash equivalents, according to court documents and comments by e-Bullion's former lawyer. The raids took place one week after e-Bullion and Goldfinger co-owner Pamela Fayed was murdered in a Los Angeles parking garage. Her estranged husband and e-Bullion partner James Fayed and several accomplices were later charged with her murder. Fayed and his gold-trading companies were also charged with operating a money transmittal business without a license. The money transmittal charge against Fayed was later dropped, but the gold-trading companies are still under indictment. 

A hearing is set for March 9 to review a motion filed by attorneys for the companies to have the seized assets returned to cover legal fees and cover operational costs.

Sources: Court documents, Bryan Nevins, an anonymous e-Bullion account holder, the FBI, the United States Attorney's Office for Central California.   

Related:

• Government attempts to block e-Bullion from recovering seized assets
• Recent e-Bullion court filings