As of September 1, 2011, ALL 1,875 retail establishments are prohibited from providing light-weight, single-use plastic carryout bags to customers at the point of sale. MORE

By Lookout Staff

November 2, 2011 -- The City of Santa Monica filed a 19-count criminal complaint Tuesday charging that Goldline International, Inc., one of the nation's largest gold coin dealers, runs a bait and switch operation.

The Santa Monica-based company is accused of "using false and misleading claims" to get customers seeking to invest in gold bullion to switch to highly overpriced coins, said Adam Radinsky, who heads the City's Consumer Protection Unit.

"The charges, all of which are misdemeanors, include grand theft by false pretenses, false advertising, and conspiracy," Radinsky said.

The complaint also names former CEO Mark Albarian, current CEO Scott Carter, executives Robert Fazio and Luis Beeli, and salespeople Charles Boratgis and Stephanie Howard.

Albarian, Fazio and Beeli are charged with conspiracy to commit grand theft by false pretenses for training salespeople to use the bait and switch tactic and turn the transactions over to senior salespeople. The salespeople were paid approximately 2,000 percent more commission for sales of the overpriced coins than for sales of bullion, City officials said.

The three also are accused of training salespeople to scare customers into believing the government would confiscate bullion and that bullion must be reported when a transaction is made, Radinsky said. Salespersons who allowed customers to undo a transaction for overpriced coins were reprimanded and those not meeting the quota for selling overpriced coins were punished.

Goldline, Albarian and Carter were charged with false advertising for making false or misleading statements to the public.

"The complaint also alleges 12 counts that include grand theft, false advertising and elder abuse stemming from transactions with individual customers in the past three years," Radinsky said.

The defendants will be arraigned in the Los Angeles County Superior Court, Airport courthouse, on January 4.

The misdemeanor charges each carries a maximum penalty of one year in County Jail and maximum fines of between $1,000 and $10,000 per offense.

The investigation is ongoing, Radinsky said.

Consumers who believe they have been defrauded by Goldline should contact the City Attorney’s Consumer Protection Unit at 310-458-8336 or file a complaint online at gold.smconsumer.org.