Lawyers representing dozens of plaintiffs who claim they were swindled out of their retirement savings by a now defunct Los Angeles gold investor are trying to push the alleged scammers into federal bankruptcy to speed up any recovery.
According to a U.S. Bankruptcy Court filing late last month, alleged victims of Oxford Gold Group LLC want to force the company into a Chapter 7 bankruptcy proceeding in order to collect more than $6 million in lost retirement savings.
The plaintiffs’ attorneys last week filed what’s called an involuntary petition for bankruptcy on behalf of 49 Oxford Gold victims.
The legal maneuver allows creditors, like the Oxford victims, to force a debtor into a proceeding where a trustee is appointed by the government to take find out what assets exist and take control over them to protect creditors like the Oxford victims. A hearing on the matter has been set for Sept. 11.
San Diego attorney Maria Severson, who co-represents scores of allegedly defrauded investors, said she also is seeking the appointment of a trustee to take over responsibility for whatever money is left.
“Each day that Oxford Gold remains in control, there will be waste and dissipation of assets,” she said. “Appointing an interim trustee is necessary to preserve the property of Oxford Gold and prevent loss of its assets and funds, if any are left, so that Oxford Gold victims have a chance at recovering some of their funds.”
Company executives were named in a class-action lawsuit filed last month in Los Angeles federal court.
The legal complaint accuses the defendants of accepting millions of dollars in retirement savings from investors who saw and heard commercials for Oxford Gold Group on local television and radio broadcasts.
It also names as a defendant the Equity Trust Co., an Ohio company that specializes in self-directed investment accounts focused on precious metals, cryptocurrency and other alternative assets. Company officials declined to comment on the lawsuit.
The Union-Tribune reported last month that an untold number of investors, including San Diego County residents, began receiving unsolicited letters from Equity Trust earlier this year alerting them that the Oxford Gold Group had not deposited the gold with Equity Trust that the investors were promised.
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A California couple thought they’d invested in gold. Instead, they and hundreds of others say they were scammed.
“What this means is that our records reflect that i) the metals you purchased from Oxford Gold were not yet fulfilled and delivered to your designated depository, and/or ii) that your Equity Trust account(s) has not received the cash proceeds from the precious metals that you sold to Oxford Gold,” the correspondence said.
Several investors contacted Oxford Gold and were told by phone that everything was safe and the problems were being addressed.
But others subsequently visited the company’s offices in Beverly Hills and found the doors locked. There was no forwarding contact information or any online access to the company or its executives.
Heather Short of San Diego told the Union-Tribune that she and her husband began investing in Oxford Gold after months of hearing the company’s commercials on a local talk-radio show.
“I thought, it’s silver and gold. It’s tangible. It’s not going to lose value,” Short said. “We did one lump sum from each of our retirement accounts.”
According to the class-action case filed last month, the victims were misled by Oxford Gold executives and Equity Trust did not immediately inform their clients that the precious metals were not delivered.
“Business records generated at defendant Equity Trust Co. in connection with the transfer of the millions of dollars from investor accounts showed substantial and material amount of precious metals transactions with OGG were not being settled,” the complaint alleges.
In all, the plaintiffs so far total at least 49 people from 27 different states have signed onto the legal complaint.
This article has been updated to note an earlier hearing date for the bankruptcy petition.
