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Tulving, the aftermath from 3.4.14

Discussion in 'PM Dealer Feedback' started by BeefJerky, Mar 4, 2014.



  1. About.Ag

    About.Ag Seeker Seeker

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    Correct. From what I see looking at the data, Tulving lost about $25M of inventory, and then about $10M-$40M of customer funds, and the timing corresponded with drops in the price of gold (and silver). The biggest drop in the price of gold was in mid-April, 2013, exactly when Tulving complete lost the ability to ship products in anything resembling a timely matter.

    Metals futures, options, or not being hedged when he should have seem to be likely candidates. I'm leaning towards futures/options, as he seemed to be bleeding money pretty badly, more so than I think would happen if he were just unhedged.

    That's part of why the word got out so slowly. Tulving had around 28,000 customers, who I believe ordered an average of at least 5 times each. Most of those customers that had not ordered before around the beginning of 2012 had complete trust in Tulving, and nary a bad word to say (except the occasional "He wouldn't sell me 900 silver eagles even though I met the minimum 500oz order!" stuff). When I first expressed concern (with a 3-week delay) in private forums, it was similar (although not quite as bad): he's usually fast at shipping, you'll get your order.

    Plus, not a single website that covers gold and silver news wrote a single word of their own about it. The *only* place outside of forums where anything was written was at about.ag and the Orange County Register (the local newspaper). And Kitco didn't just refuse to report on it, they were even censoring things, removing many posts and links.

    It got to the point that when I wrote that Tulving had closed, very few people believed it. Rather than be surprised that the phone went to voicemail (an extremely rare occurrence there), they said that the phone was still in service and the website was still up, and refused to believe that it was closed. Even a week or so later I had people telling me they thought Tulving might still be open (several days after the "We're closed" sign appeared on their door).

    Needless to say, you deserve a big "thank you" for trying to get the word out early.
     
  2. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    goldie,

    to be fair, I tried multiple times to get everyone to chill on that,

    and yes, in the fullness of time, the real problem was sorted out,

    and they are long gone,

    sometimes ya just have to be patient with us, as we use really long leashes
     
  3. southfork

    southfork Mother Lode Found Mother Lode

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    http://www.ocregister.com/articles/tulving-608094-million-secret.html

    The Secret Service has opened an investigation into the Tulving Co., an Orange County precious-metals coin dealer under fire for allegedly taking customers’ money but failing to fulfill their orders.

    Agency spokesman Max Milien confirmed the probe Tuesday but would not provide specifics, citing an ongoing investigation. In addition to providing security to current and former U.S. leaders and their families, the Secret Service also looks into financial crimes, from major fraud to counterfeit currency.

    Meanwhile, the Tulving Co., which many in the industry called a major player, has filed for Chapter 11 bankruptcy protection. The Costa Mesa-based business reportedly owes $1 million to $10 million to as many as 49 creditors, according to a bankruptcy document filed last month.

    Hundreds of clients across the country so far have reported getting nothing in return after spending thousands to more than $100,000 for precious-metal coins from Tulving. Lawsuits have pegged the value of outstanding orders at $5 million to $14 million.

    Customers have contacted the Register, Better Business Bureau and several government agencies about their inability to locate company owner, Hannes Tulving Jr., or his staff about outstanding orders. Tulving has not responded to several requests for an interview.

    Complaints have been mounting since last summer, resulting in lawsuits and at least two government investigations.

    Chuck Marshall of Walnut Creek is among the lawyers who have been contacted by the Secret Service regarding the whereabouts of Tulving.

    Marshall, who is representing some of Tulving’s customers, said the federal agency was trying to find Tulving to serve him a grand jury subpoena.

    The California Department of Business Oversight is leading the other investigation. The state agency would neither confirm nor deny the existence of a case, but a disgruntled Tulving client told the Register he had been contacted by the state agency.

    More than 20 years ago, the Federal Trade Commission accused Tulving of overpricing rare coins and going back on return guarantees through another company, Hannes Tulving Rare Coin Investments, which was based in Newport Beach.

    Authorities said the business defrauded clients out of more than $40 million. Tulving settled with the FTC in 1992 and agreed to pay $1.3 million.
     
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  4. Ahillock

    Ahillock A nobody Mother Lode

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    Where's Tulving?



    [​IMG]
     
  5. southfork

    southfork Mother Lode Found Mother Lode

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    Welll looks like his website is finally down too, the fat lady has sung. I reckon he wasn't hedged like all the experts claimed he was after all.
     
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  6. gringott

    gringott Midas Member Midas Member Site Supporter

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    You can't get there from here.
    Not only the website is gone, all the fanboys are gone from here as well.

    Good lesson to all of us to do our own due diligence, and not take the word of a self-proclaimed expert or experts instead.

    We all also have to keep our mind open to the idea that past performance is no guarantee of future performance.

    I'm not smarter than the average bear, but Tulving's previous bankruptcy scared me more than the low prices enticed me.

    I work too hard for my money to shoot craps with it. I suspect most here get their money the same way and can't afford to be scammed out of it.
     
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  7. Usc96

    Usc96 Gold Member Gold Chaser

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    Upper left hand corner, about an inch down, and an inch in. :)
     
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  8. luckabuck

    luckabuck Gold Member Gold Chaser

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    It's an interesting point that none of Tulving's supporters who called me a liar and a shill for another bullion dealer are not posting anymore.
     
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  9. BoulderW

    BoulderW New Member

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    I was also lucky, due to heavy pressure from my local detective, to get paid in October. And if you got paid after December, you might be ordered to return the gold or money you received.
     
  10. BoulderW

    BoulderW New Member

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    I was accused of lying or having some other motives when I posted about the gold I sent him and not getting paid. It turns out, I was telling the truth and helping to warn others.
     
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  11. southfork

    southfork Mother Lode Found Mother Lode

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    How does $40M of Gold and Silver Disappear: The Collapse of Tulving Company

    By CoinWeek on March 29, 2014 12:06 AM

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    by About.Ag, exclusively for CoinWeek….

    Author’s Note: If you have done business with Tulving and are owed metal or money, or if you received metal or money from Tulving after December 9, 2013, please go to my site for assistance. Otherwise, please enjoy the article.

    The Tulving Company, one of the first names many people think of when recommending bullion dealers, shut down on March 3, 2014, and declared bankruptcy a week later. By itself, that would be big news. But by my calculations, when they shut down, they owed upwards of 1,000 customers about $40M.

    In August, 2011 they claimed an inventory of silver worth $25,000,000. Today, their inventory is worth less than $50,000, and they may owe as much as $40,000,000. How in the world could that have happened?

    I have been following the Tulving saga closely since last October, and kept notes and observations on my blog About.Ag. I’ve been asked by CoinWeek to write this piece to discuss what I’ve observed and what’s happening now.

    The Early Signs of Problems

    silver bars How does $40M of Gold and Silver Disappear: The Collapse of Tulving CompanyThrough forensic research, August, 2011 seems to be where the story really starts. But my involvement in this saga started back in December, 2012, when I bought some silver bars from them. I didn’t even think about doing any research online, as I had ordered from them in the past, and had full trust in the company. In the past, I would order, and get my metal no more than a couple days after they got my money. I’m not special; The Tulving Company has done business with some 28,000 other customers, and most had the same experiences I did. But this time, something wasn’t quite right.

    This time, I waited nearly 3 weeks to get my metal. The order taker told me it would take a few weeks, so it didn’t come as a huge surprise. I figured they were probably doing booming business. Little did I know that they likely had already lost $25M of inventory by that time, and had start dipping into customer funds. In other words, although I got my silver, it was by pure luck.

    Fortunately, I was suspicious. I don’t consider myself paranoid, but I do believe in Ronald Reagan’s “Trust, but verify.” I looked at the Better Business Bureau (BBB) reports, and saw a big uptick in complaints, from 1 every 6 months to 8 within 6 months. In a private forum, I wrote “So the first sign of trouble with a business like this, in my opinion, would be a noticeable change in delivery times and “juggling” orders.” At that point, I did not think they had a problem. But even if I had, I would have had no clue how monstrous a problem it would become.

    The general consensus on the forum that I wrote on was that all was well. One person got their order in 2 days. And someone said that Tulving was claiming that their insurance limited how much they could send per day. And some pointed out that everyone who has ordered from Tulving has eventually received their metal.

    Tulving was on my radar, but not something I paid much attention to. In July, 2013 I checked the BBB website again, and there were just 2 complaints since March. It did not seem like anything worth being concerned about. Boy, was I wrong. Hannes Tulving, Jr., sole owner of The Tulving Company, certainly knew at this point that the situation was beyond hope.

    September, 2013 – Stories Start to Surface

    Finally in September, 2013, stories started getting out about delays at The Tulving Company. Someone claimed they had sent $200,000 to Tulving five months prior, and had not received any metal yet. The problem with Internet forums, however, is that while they are great at getting information out, they are nearly anonymous. Some of the early complainers were accused of being shills from competitors. Those that had done business with Tulving before would back up the company, recalling times they had gotten their orders very quickly. Nobody really knew who or what to believe.

    bbb How does $40M of Gold and Silver Disappear: The Collapse of Tulving CompanyI decided to spend a few minutes back at the BBB website to see where things stood. There was a noticeable change this time, with 18 complaints in 2 months. Not to the point of screaming “scam!”, but enough that I really started to take notice. In the private forum I mentioned, I explained that I was confused because “it doesn’t fit what I would expect the 2 most plausible fraud scenarios to be: [1] funding his retirement, or [2] ponzi scheme funding a flashy lifestyle (ala Bernie Madoff).”

    At that point, I knew there was a problem. From the many reports that Hannes was picking and choosing which orders to ship each day, I thought maybe he was simply unable to properly manage the business anymore. Perhaps he needed some extra people to help ship orders, perhaps his health had deteriorated. After 20 years of impeccable service, it was hard to imagine the worst.

    What I should have focused on at the time was the length of the delays: even in June, 2013 and July, 2013, the average delays reported were 7-8 weeks. The FTC does not allow companies to take orders if they know they cannot ship it within the timeframe they specify (or 30 days, if no time is specified). And Hannes himself stated in his FAQ that he believes taking over 30 days to deliver is a futures contract, which he is not allowed to sell.

    My “Aha!” moment was in October, 2013, when someone reported that she sent Tulving 220 ounces of gold to Tulving, and couldn’t get them to pay her. It’s one thing to delay bullion (there could be delays due to drop-shippers, metal shortages, insurance limits, heavy volume, etc.). But I realized that the inability to pay cash was the smoking gun, since he should have had a huge amount of money sitting in the bank from all the delayed orders.

    It slowly dawned on me that The Tulving Company had a massive backlog of orders worth many millions of dollars that they would not be able to fulfill. I knew this was not going to have a pretty ending, I knew that something was terribly wrong. In a number of cases, people had trusted The Tulving Company with their life savings. Worse, I had recommended Tulving to many people over the years. I had to do something, I had to let people know.

    Getting The Word Out

    saints bullion lg How does $40M of Gold and Silver Disappear: The Collapse of Tulving CompanyI run a website primarily for silver investors. This is how I started to get the word out. I quickly put together a page explaining what I thought was going on at The Tulving Company. With enough detail to hopefully convince people that if they placed an order with Tulving, they might not get it. I hoped they would read about 4 contradictory statements Tulving made on their website, and realize something was wrong.

    Over the coming months, I painstakingly gathered information on every complaint I could find, and created a chart showing month by month how many complaints there were, and the average delay each month. I would update the statistics every few days. My main sources of information were the BBB and the Business Consumer Alliance (BCA) websites. It seemed like every time I checked those sites, there were more complaints.

    Not a lot of people visited the page at the beginning. Many people just didn’t bother following links to the page, many never encountered links to it. No websites that follow gold and silver news wanted to write anything negative about Tulving, so there were no articles to link to my site. Word spread mostly through forums (but even the forums were sometimes censored, as was the case at Kitco). My guess is that the websites that cover gold and silver news were afraid of getting sued for libel. I may have flirted close to the boundary of libel, but the potential benefits to those risking their money with Tulving far outweighed the risks to me.

    By the end of November, The Tulving Company had racked up over 150 complaints, and by the end of 2013 they had nearly 250 complaints.

    Despite all the complaints, on some Internet forums people would still defend Tulving, saying that Tulving was probably very busy with a heavy volume of orders, or that there really were insurance limits preventing them from sending the metal. Even for about a week after I reported that Tulving had shut down, many people refused to believe it (“Their website is still there!” and “Their voicemail still picks up!”).

    The problem before they shut down, however, was that it was impossible to know if Tulving could recover. They implied that all was well on their end (for example, that their insurance limited how much they could send per day), which meant that (in theory at least) they could have had the cash in the bank to fulfill all the orders. The delays were proven well enough to give me reason to get the word out potential customers to stop doing business with Tulving. But there wasn’t quite enough evidence to lean on the authorities to get this to stop (beyond just having people file complaints).

    Word of my coverage of Tulving increased on January 27, 2014. Somehow, word just got out, and started spreading quickly, with my web page on Tulving getting 20 times as many hits as the day before.

    A Crack In the Wall

    Tulving’s new business model (waiting for cash from new orders to pay for old orders) was of course doomed to fail. Similar to a Ponzi scheme, he could only keep it going as long as new orders exceeded the what he needed to ship.

    From around October, 2013 to January, 2014, Hannes had been following a very predictable pattern. Each week, he would get money from new orders, and each week he would respond to complaints with a date that the order would ship by (“Customer’s order will ship by Friday, Dec 13th, 2013. Thanks, The Tulving Company, Inc.”). Presumably, any extra money would be used to ship other backlogged orders, in an order only known to Hannes.

    On January 31, 2014, I discovered that there were 2 BBB complaints where Tulving had promised to ship the metal by a certain date, but did not. It’s one thing to miss a shipping date you promise to a customer, it’s a very different thing to miss a shipping date you promise to the BBB. Barring exceptional circumstances, it proves your company has serious problems.

    The Tipping Point

    On February 19, 2014, I posted on my website that The Tulving Company had reached ‘The Tipping Point.’

    As I described above, he could only keep this game alive as long as new order volume exceeded what he needed to ship.

    I started collecting invoice numbers from many Tulving customers. Every time Tulving would take an order, they would increase the invoice number by 1. From the invoice numbers, I could therefore deduce how many orders they were getting each day. And what I saw was disturbing: the number of new orders per day had decreased to about the number of complaints per day. Unless Tulving had a magic way of reducing complaints or increasing his business, it could not continue much longer.

    While I could sense the end was near, I didn’t quite realize how near.

    The End

    tulving4 How does $40M of Gold and Silver Disappear: The Collapse of Tulving CompanyOn February 28, 2014, I reported that The Tulving Company was effectively out of business.

    This was pretty easy for me to figure out; I noticed that Hannes had stopped responding to BBB complaints. The only way he was able to keep his business alive was by responding to complaints with a promised shipping date, and shipping out those orders on time.

    By now, I was getting very frustrated that The Tulving Company was continuing to take orders. I even put out a public plea to Hannes on March 2, 2014 – “could you please do the right thing, and either file bankruptcy or if you are not insolvent come clean and explain the situation?”

    Apparently, Hannes was listening. The next morning, March 3, 2014, The Tulving Company ceased operations. The website was left up, and the answering machine would play their off-hours message – just enough to convince the skeptics that Tulving had not shut down.

    After closing, a class action lawsuit was filed on March 6, and a judge approved the freezing of The Tulving Company’s bank account on March 10.

    On March 10, The Tulving Company filed a Chapter 11 bankruptcy petition. Around this same time, Hannes Tulving, Jr. moved packed up and reportedly went into hiding.

    We soon find out that the Secret Service seized Tulving’s records, on behalf of the U.S. Attorney.

    Gold? Silver? Cash?

    If you’ve read this far, you must be wondering how much money or metal is involved, and where it all is. If you do not price your products properly, you can lose money. But how in the world can you lose $40M of your customer’s money?

    Well, that’s exactly what I and all of Tulving’s customers want to know. Only Hannes knows for certain, but there surely are some clues.

    From its beginnings in 1990 through 2011, The Tulving Company certainly appeared to be a viable business. A company cannot last that long if they cannot make a profit. But in 2011, things changed.

    $25M of Silver Disappears in 7 Months

    On August 23, 2011, The Tulving Company claimed they had 600,000 ounces of silver in stock, with a value of $25M. By December 29, 2011, they only claimed 300,000 ounces of silver in stock. By March 14, 2012, their inventory showed about 12,000 ounces of silver in stock. On June 6, 2012, someone claims that The Tulving Company stated that they “they don’t have the merchandise in their actual possession for insurance reasons.”

    In 7 months, it seems that The Tulving Company went through 600,000oz of silver. From $25M worth to nearly none. That was before the complaints started coming in.

    That raises the question: what caused the $25M of silver to disappear, and where did that money go? Was it just Hannes selling off the inventory and keeping the profits to retire off of? Did The Tulving Company owe money? Was there a giant heist? A silver shortage? Or was it as boring as Hannes pricing his products too low?

    Where Did the Silver Go?

    The Tulving Company did claim $675M of sales in 2011, which makes a $25M loss seem reasonable at first glance. But bullion businesses work on spreads: you buy 500 silver coins for $11,000 and sell them for $11,400. After accounting for the cost of the bullion, in 2011 The Tulving Company likely had about $10M-$14M to work with (“gross profit” for the accounting crowd), most of which goes to expenses. Shipping silver is very expensive, and would eat up much of the spread. So after expenses, The Tulving Company might be lucky to have a net profit of $1M-$3M or so. The $25M of silver that disappeared is massive compared to the possible profit.

    We know that the $25M of silver that disappeared was not due to a sudden large purchase, such as paying cash for a mansion or yacht, as the silver supply dwindled over the course of many months. A shortage of silver in the market could account for the loss – but then there would have been $25M sitting in the bank, which would have eased any problems before the bankruptcy. Nor could it have been a massive heist one day, as the silver disappeared over time (and moving 600,000oz of silver – weighing as much as about 15 cars – would not be a simple task).

    What we also know is that from early 2009 through the bankruptcy, the sharpest drops in the price of gold were in September 2011, December 2011, May 2012 and April 2013. The first two drops were in the 7-month period where $25M of silver disappeared. Online complaints of delays started around June, 2012 – after Tulving’s inventory seems to be gone, and right after the May 2012 drop. And Tulving’s ability to fulfill orders went haywire in April, 2013.

    So we are seeing a pattern where big drops in the price of gold correspond with Tulving’s inventory decreasing or delays in customer orders. To me, this suggests that Tulving owed a lot of money over the course of several years, and that what the amount he owed may well have followed the price of gold.

    Further, it is reported that many bullion dealers (especially larger ones) hedge in the futures market. Hedging is good, as it insures that dealers will not lose money on large orders if the spot price changes. Speculation, however, is bad – the dealer profits or loses money based on how the price of gold moves, akin to gambling. We also know that The Tulving Company had an account with at least one futures broker (Peregrine Financial, which went bankrupt in 2012).

    From the information we have, it looks like the most likely possibility is that The Tulving Company was speculating on the futures market. This certainly is not definite, just a plausible explanation given the facts.

    This theory hinges on the correlation between the drops in the price of gold and the loss of inventory and delays in customer orders. It also does not take into account the possibility that with large price drops, Tulving may have received more customer orders, that somehow exacerbated problems.

    There is one last theory that many people come up with: that Hannes did this to fund his retirement. I find this one of the least likely scenarios (and hope Hannes is not chuckling as he reads it!). He seems to honestly care about his customers (despite his grumpy persona), and seems to have been genuinely concerned about the problems. This would also be a rather poor way of taking the money and running, there are ways that he could have done so much more effectively.

    What Happens Now?

    At this point, The Tulving Company has ceased operations and filed for Chapter 11 bankruptcy (which would allow it to resume operations). A class action lawsuit has been filed on behalf of those who ordered from The Tulving Company without receiving their metal. The Secret Service seized Tulving’s records after the U.S. Attorney launched a criminal investigation.

    Although Tulving claims less than $50,000 of assets, I imagine the bankruptcy court will not allow them to discharge their debt without an explanation of where somewhere in the order of $40M+ went, along with proof. The Chapter 11 trustee has a background in forensic accounting, so I doubt Hannes could pull one over on him.

    In any case, there is a good chance that over the next few months, we will find out exactly what happened.

    With any luck, the metal or money went somewhere where it can be recovered, and customers can be paid what they are owed.

    How Do I Avoid This Happening To Me?

    If you order bullion online (or anything of high value), you should be wondering how you can avoid the same fate.

    There were a lot of warning signs, but most weren’t readily noticed until after it was too late.

    Any time ordering something of high value online, you should check reviews of the company, even if you trust the company. Check with the BBB and other sites that track issues with bullion dealers. Most companies get at least occasional complaints, but a pattern of lots of recent complaints (versus fewer in the past) is worth investigating. And a pattern of complaints regarding delays more than 30 days (or the time the company promises to ship in) should make you think twice.

    Remember that complaints to the BBB are usually verified, whereas complaints in forums and such may not be. But that does not mean that you should ignore complaints in forums, as they may be the first signs of trouble.

    One of my next projects is putting together details on warning signs to look for, and a system that could help discover increasing delays at bullion dealers. If such as system became widely used, it could significantly limit the damage a bullion dealer could cause in a case like this.
     
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  12. LT2014

    LT2014 New Member

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    About.AG continues to do admirable and detailed coverage of this situation.

    http://about.ag/TulvingDocuments.htm

    Interesting that HT seems nowhere to be found yet was able to give the bankruptcy attorney a $20,000 retainer. What happened to the freezing of accounts? Would one guess HT has other funds in other places?
     
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  13. LT2014

    LT2014 New Member

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    EO 11110, pitw and luckabuck like this.
  14. pitw

    pitw Gold Member Gold Chaser Site Supporter

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    $300 deposit to bid?
     
  15. Ragnarok

    Ragnarok I'd rather be Midas Member

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    That's to keep out the non-serious.
    Apmex should buy it for a West Coast division and show 'em how it's done! ;)

    R.
     
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  16. Montecristo

    Montecristo Silver Member Silver Miner

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    No safes? I was expecting 2 or 3 top of the line TRTL60 x 6's
     
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  17. Piggybank

    Piggybank Seeker Seeker

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    I spy some unopened FedEx boxes....:hmmmm2:

    Perhaps the last number ofhow much they lost?

    [​IMG]
     
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  18. southfork

    southfork Mother Lode Found Mother Lode

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    LOL you don't need safes to ship what you never had.
     
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  19. Deweydog

    Deweydog Seeker Seeker

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    Or the loaded safes have been relocated to an undisclosed location for his future enjoyment.
     
  20. southfork

    southfork Mother Lode Found Mother Lode

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    Or they were filled with comex silver which we know does not exist, and there was a fire.
     
  21. Montecristo

    Montecristo Silver Member Silver Miner

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    Probably so.

    But we know, well we think we know, that at one time he did stock some inventory. Even if he never stocked anything and had it all dropped shipped, he did receive metal from customers that he would have had to store, even for a short while, before shipping it back out to another customer.


    Obviously he was making great money with the $30,000 per month lease on the store and $10,000 a month on his home/home office.
    It just seems really odd that there isn't some kind of safe. Even a small one. That's one of the first questions the insurance company asks, is what kind of safe do you have and what kind of security system do you have is the next question.

    Maybe the safe was leased and it's not part of his assets so it can't be sold.
     
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  22. luckabuck

    luckabuck Gold Member Gold Chaser

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    He stored it in his car trunk, and has it with him sharing a room in Russia with Eric Snowden.
     
  23. southfork

    southfork Mother Lode Found Mother Lode

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    I just realized this and cant believe no one else had in all these months, this was the mother of all boating accidents, how could we have missed it.
     
  24. Montecristo

    Montecristo Silver Member Silver Miner

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    I'm not giving up anybody's secrets here because this guy has long gone out of business, but I knew a jeweler once who had a tremendous amount of talent, but absolutely no business sense. He opened up a little shop and didn't have a safe. He had very little in the way of inventory. I thought that was odd that he didn't have a safe, but I figured he has always been a little flighty and maybe he just didn't organize the delivery of the safe in time before he opened the store. About a year later after he opened he still didn't have a safe. I was dumbfounded. So, I asked him, "How could you not have a safe? What do you do with the merchandise every night and all of the customers jewelery you take in for repair?"

    He answered me very smugly, like he was a genius for thinking of this. He said, "I didn't want to spend the money on a safe, so every night I take all the trays of merchandise and all of the customers repairs (they are inside job envelopes of course) and I stack them up inside of a big black garbage bag and I put it just inside the back door so it looks like a bag of garbage that needs to be thrown out. If anyone ever breaks in they would never think to look in the garbage.":confused:

    It should be no surprise to anyone this guy didn't last in business on his own very much longer.
     
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  25. ~BS

    ~BS Gold Member Gold Chaser

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    Maybe he didn't own those, but did own this beaut


    5470357_orig.jpg
     
  26. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    The safes are in the Feds hands guys IMO,

    They seized all 'assets', and would bet with a forklift right handy, they were the first to go on the truck
     
  27. luckabuck

    luckabuck Gold Member Gold Chaser

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    Scorpio,
    I'm betting that there is little to nothing in those impounded safes except IOU's to many of his customers and to his drop ship suppliers.
     
  28. Montecristo

    Montecristo Silver Member Silver Miner

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    The latest from About.Ag

    http://about.ag/Tulving.htm

    Edit: About.Ag you are doing a great service to us by keeping us all up to date on this. Thank You!
     
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  29. LT2014

    LT2014 New Member

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    Kind of like the briefcase that Lloyd and Harry had at the end of the movie in "Dumb and Dumber".
    By the way, if you have never watched it, you should!
     
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  30. LT2014

    LT2014 New Member

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    Thanks to about.AG: update........

    $371,418.75 in Tulving's Bank Acccount

    May 1, 2014 9:00AM EST
    Court documents show that The Tulving Company's primary bank account had a balance of $371,418.75 at the end of March. This comes as a surprise due to the bankruptcy petition showing less than $50,000 of assets.
    However, it is a very small amount compared to the amount creditors are owed.

    It also shows that the Chapter 11 trustee was aware that the estate assets were about 10 times what The Tulving Company claimed, at about the time he was looking to employee a law firm.

    The same document also provides information that a $600,000+ cashier's check was deposited in January, 2014. This is very concerning, as it appears to be an order from a customer, yet our records of over 600 complaints the largest dollar amount shown was just under $320,000. This suggests that there may be many 'hidden' creditors out there that we are not yet aware of.

    Conversion to a Chapter 7 Bankruptcy

    May 1, 2014 8:35AM EST
    The Chapter 11 trustee has filed a motion requesting the court convert the bankruptcy from Chapter 11 (where the business can continue running) into a Chapter 7 bankruptcy (where it is disolved).
    As far as I can tell, this makes perfect sense, as there really never seemed to be a reason to file as Chapter 11 in the first place.

    Tulving Inventory Seized in March

    May 1, 2014 8:25AM EST
    Court documents now show a new twist: Tulving's inventory was seized by the Secret Service in March, along with their records.
    No information is available on what inventory they had, or what it was worth, but presumably any metal they had was seized. The Tulving Company claimed less than $50,000 in assets, and apparently was almost exclusively drop-shipping order, so there likely was not much.
     
  31. southfork

    southfork Mother Lode Found Mother Lode

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    And the beat goes on, where are all his cheerleaders now?

     
  32. LT2014

    LT2014 New Member

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    About.AG continues to do an outstanding service. No one would know the current situation without him. Very sincere thanks, About.AG, for all your research and time to keep all involved informed!

    About.Ags latest update:

    Tulving's Initial Explanation

    May 3, 2014 4:30PM EST
    Hannes Tulving, Jr. has come up with a brief statement regarding the reason for the bankruptcy:
    "[The Tulving Company] filed for bankruptcy protection because it could not pay its daily operating expenses, including high-interest payments on inventory that was collateralized for operating expenses."

    It is cute, but doesn't really say much. It says that they filed for bankruptcy because they had high interest loans using inventory as collateral, and couldn't keep up with the interest expenses. But if you have the inventory, and your operating expenses are too high, why take out a loan? You need to raise your prices, or go out of business.

    This also means that much of The Tulving Company's inventory, which we just found out 2 days ago was seized by the Secret Service (previously, it was only known that records were seized), may be used as collateral for loans, and not available to creditors.
     
  33. Goldhedge

    Goldhedge Modal Operator/Moderator Site Mgr Site Supporter

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    [​IMG]
     
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  34. luckabuck

    luckabuck Gold Member Gold Chaser

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    The sad thing is that he may be in a place like this until law enforcement gets an indictment and they get their actual hands on the Ponzi master. And I do agree that there is nothing but the sound of crickets from his supporters who called me a liar and a shill for another bullion dealer..... absolute silence.
     
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  35. LT2014

    LT2014 New Member

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    I'll break the silence and the sound of crickets and thank you on behalf of an unknown number of potential Tulving customers who were spared by your warning. They are the ones who should be speaking up. Your critics are too ashamed to speak.
     
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  36. About.Ag

    About.Ag Seeker Seeker

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    Hi all,

    Somehow, I was unaware that this thread had continued. Thanks for all the kind words.

    The news I found out today was that The Tulving Company had a loan with a subsidiary of A-Mark Precious Metals, using over 250,000 coins as collateral (quarters and presidential dollars, all from 2007). The loan started in October, 2008 and was "revisited" back last April (an address change and an extension were filed), during the week that gold went down 20%, the time I believe something happened that caused Tulving to fail. I think Hannes called up A-Mark, asking for more money, and they realized his collateral wasn't worth what it used to be, and denied him the loan.

    The strange thing is that Hannes recently reported that The Tulving Company "could not pay its daily operating expenses, including high-interest payments on inventory that was collateralized for operating expenses." But the only properly recorded collateralized loan (the one I mentioned) had collateral of only about $350,000. Even if it was a $1,000,000 loan, and a whopping 30% interest, that's less than $300,000 during the time that Tulving lost somewhere between about $10M and $60M of customer money. So something doesn't add up.

    I also looked at the pictures for the auction, and there are some coins there (inventory), which was supposed to have been seized by the Secret Service. And there are either a bunch of empty U.S. Mint boxes, or ones full of bullion (one of the 5oz monster boxes was opened to show the tubes). Hopefully, it's just those low-value graded coins, and someone isn't going to be able to buy monster boxes for pennies on the dollar a week from today!
     
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  37. JayDubya

    JayDubya Gold Member Gold Chaser

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    Unfortunately, (or fortunately, depending on your point of view) many of those supporters have since been banned and cannot respond now. Whether or not they would have can certainly be debated, as can whether they would or would not have issued any apologies to you.
     
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  38. Montecristo

    Montecristo Silver Member Silver Miner

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    Operating expenses is so vague. Just what the heck, besides his rent on two condos and the rent on the store, was so darn expensive that a company doing $30 million of business a month couldn't cover?
     
  39. About.Ag

    About.Ag Seeker Seeker

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    Hopefully we will get the truth 2 weeks from today, the date of the creditor meeting, which Hannes is required to attend.

    Of course, there's a good chance he won't show up (it has been said that he is concerned he will be arrested if he goes out into the public). If he doesn't show up, he risks losing the protections of bankruptcy (I.E. he could be permanently on the hook for the money he owes, including garnished wages, forced sale of any assets he has, etc.).

    If he does show up, there is a good chance he will try to be coy ("My memory is really bad these days", "Expenses were too high", etc.).

    The good news is that the Chapter 11 trustee should have copies of Tulving's records any day now. I've already pointed out to him exactly where to look for some quick answers, but even without that, he has the expertise to figure out what happened. Although it isn't his job to figure out what happened, it is his job to figure out where the money went, which almost certainly will answer the question about what happened.
     
  40. LT2014

    LT2014 New Member

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    I continue to post about.AGs outstanding work here. About.Ag, if this is not appropriate, please let me know and I will cease doing it.
    I am so appreciative of your unselfish work on behalf of so many people. Thanks are not enough.

    The latest from about.AG:
    Tulving Unable to Make Rent in 2013

    May 7, 2014 7:30PM EST
    Court documents show that The Tulving Company was unable to make rent payments for their warehouse/office building in Costa Mesa in 2013. The 10-year lease, signed in 2011, was for $31,000 per month, with a $30,000 security deposit put down when signing the lease. However, the security deposit was applied towards the lease in 2013 when Tulving was unable to pay the rent.
    Only ~$350,000 in Secured Loans

    May 6, 2014 1:30PM EST
    After it was discovered about a week ago that Tulving had inventory seized by the Secret Service, the question came up as to whether there are any secured creditors (anyone owed money by Tulving that has assets as collateral, which would go to them and not unsecured creditors). Unfortunately, we do not yet know for certain if The Tulving Company has secured creditors, since they neglected to file the Schedule D when they filed the voluntary bankruptcy petition.
    However, to be a secured creditor with full protection in bankruptcy, you need what the Uniform Commercial Code refers to as a 'perfected lien'. This process leaves a public record.

    There is only 1 organization that has a perfected lien against The Tulving Company (none with Hannes Tulving, Jr. himself). It is a subsidiary of A-Mark Precious Metals. They had a secured loan with what I calculate to be roughly $350,000 of collateral (raw, ungraded 2007 quarters and dollars).

    What does this mean? First, it helps answer the question as to who Tulving was paying high-interest payments to (their hint as to why they filed for bankruptcy). However, that opens further questions, as how can you lose $10M-$60M from a $350,000 loan?

    It also means that if the Secret Service seized those 2007-dated quarters and dollars, the value of that inventory would end up going to A-Mark (up to what they are owed for the loan). However, that amounts to perhaps a couple hundred dollars per unsecured creditor, and was inventory we were not aware of until this week. So this should not be a huge concern.

    The Chapter 11 trustee stated that the Secret Service seized Tulving's inventory, "e.g., gold and silver bullion, other precious coins and metals." The coins securing A-Mark's loan do not fit that description (there are over 250,000 such coins, made of base metals, likely in rolls, and much less secure than bullion). Presumably, that means that the bullion inventory seized had a reasonable value (e.g. in the $1,000,000+ range, not a single $12,000 monster box of silver eagles). However, that adds a new question: if The Tulving Company had $1,000,000 or more of inventory, why did they state under $50,000 in assets on the bankuptcy petition?

    Given Tulving's statement (suggesting a high-interest collateralized loan caused the company to lose the $10M-$60M or so it lost), that would suggest that someone did lend Tulving a very large amount of money, but did not have a lien or did not perfect it (risking losing most or all of their money). Of course, it would be nearly impossible to lose so much money from a loan, so again, there are more questions than answers.

    Tulving sought loan in mid-April, 2013?

    May 6, 2014 12:45PM EST
    I have stated many times that The Tulving Company's problems went from somewhat bad (several week delays) to FUBAR (delays as long as 10 months) in mid-April, 2013. Between April 11 and April 18, the price of gold went down 20%.
    Today, I discovered that Hannes Tulving, Jr. had a deal with a subsidiary of A-Mark Precious Metals, where they loaned The Tulving Company money using some of his graded coins as collateral. This deal started with a loan on October 23, 2008, perhaps to let him increase his inventory.

    The interesting piece is that A-Mark re-examined the loan, updating the physical address of The Tulving Company on April 17, 2014 and filed more paperwork on April 29, 2013. Given that the coins used as collateral were not bullion, it is unlikely that the re-examination was due to the change in the price of gold. Instead, I believe that Hannes Tulving, Jr. contacted A-Mark to try to borrow more money. They, in turn, re-examined the loan (quite possibly loaning him more money).

    In either case, this helps confirm that The Tulving Company's full failure occurred in the week of April 11, 2013 to April 18, 2013.
     
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