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How New York, Texas and California attorneys general pursue bullion fraud
State attorneys general bullion fraud cases in New York, Texas and California: the penalties, restitution figures and complaint steps buyers can use.
What to take away
- State attorneys general bullion fraud cases in New York, Texas and California run on statutes with published penalty caps, and each office publishes the settlements it reaches.
- Penalty ceilings differ: up to $5,000 per violation in New York, up to $20,000 in Texas and up to $250,000 when the buyer is 65 or older, and up to $2,500 per violation in California.
- Restitution is built from the dealer's sales records and paid through a claims process the state runs.
- Each office takes complaints through its own form, street address and hotline, listed below with the exact details.
- The FTC, CFTC, SEC and FINRA police the federal side, and state cases often grow out of complaints those agencies refer.
How state attorneys general build bullion fraud cases
A state attorney general does not need a federal agency to act on a bullion complaint. Every state has a consumer protection statute, and most give the attorney general power to investigate unfair or deceptive acts, seek injunctions and recover money for buyers.
Authority is split. Washington regulates interstate commerce and the commodity markets, while states police how businesses sell to their own residents. Branches of the U.S. government | USAGov lays out that division, and it explains why a Texas buyer can complain to the Texas attorney general even when the dealer sits in another state.
Cases usually start with a pattern, not a single order. Investigators look for repeated complaints about one dealer, one sales script or one storage arrangement. A solitary late delivery rarely becomes an enforcement action. Twenty buyers telling the same story often do.
The paper trail decides the case. State lawyers collect wire receipts, invoices, recorded calls, email threads and storage agreements. When a dealer promised specific coins and shipped something else, the invoice and the delivered item become the evidence.
Almost every investigation opens with a civil investigative demand, which is a subpoena for records. The dealer must produce sales scripts, training materials, customer lists and bank records. Refusing to comply can itself trigger penalties.
Settlements are the usual endpoint. A dealer facing an injunction, penalties and legal fees typically signs a consent judgment with restitution, injunctive terms and compliance reporting. That is why published restitution totals exist at all.
New York enforcement actions and penalties
A New York attorney general enforcement action in this space usually rests on two statutes. The Martin Act, Article 23-A of the General Business Law, covers commodities as well as securities. Executive Law section 63(12) reaches persistent fraud or illegality in business conduct.
The Martin Act standard is lower than common law fraud. The office does not have to prove that each buyer relied on the misstatement, only that the dealer made it. New York cases often move faster than comparable matters in other states for that reason.
Penalties come from more than one place. General Business Law section 350-d sets a civil penalty of up to $5,000 for each deceptive act or practice. The Martin Act lets a court order disgorgement of profits and restitution to buyers on top of that.
New York files these cases in State Supreme Court, and the Consumer Frauds and Protection Bureau inside the office handles resident complaints. Settlements are published as an Assurance of Discontinuance, which names the dealer, recites the restitution total and lists the banned conduct.
That published document is worth reading before you buy. Its prohibited conduct section lists tactics that already drew a state case. Those include buyback promises the dealer did not honor, markups over spot left undisclosed, storage fees on metal never bought, and sales scripts aimed at older buyers.
New York also acts against dealers who sell leveraged or financed metals positions. Those products can be commodity transactions under federal law and deceptive practices under state law at the same time, which is why the office coordinates with the CFTC.
An Assurance of Discontinuance often names individual officers, not only the company. That matters because a dissolved LLC cannot pay restitution, while the people who directed the conduct can be held personally liable.
Buyers who want to stay out of the next case should consult a bullion formats guide before wiring money, because the documents a dealer refuses to hand over are the same ones investigators later subpoena.
Texas enforcement actions and consumer restitution
Texas routes bullion complaints to the Consumer Protection Division of the attorney general's office. The governing statute is the Deceptive Trade Practices Act, chapter 17 of the Business and Commerce Code. Its list of deceptive acts in section 17.46 is broad.
The penalty structure is the most concrete of the three states. Section 17.47 allows a civil penalty of up to $20,000 for each violation, and up to $250,000 for each violation committed against a consumer who is 65 or older.
Texas attorney general enforcement action under the DTPA is filed in a district court in Travis County or in the county where the dealer lives or the conduct happened. The state can also recover attorney fees and investigative costs, which raises the price of fighting.
Restitution is calculated buyer by buyer from the dealer's own sales records once those records are produced. Texas settlements are usually paid through a claims process the attorney general administers, and unclaimed funds can revert to the state after a set period.
A Texas case often begins with a referral from a district attorney or a cluster of complaints from one metro area. Investigators pay attention to seminars and dinner events that promise fixed returns, because that promise is indefensible under any reading of the statute.
Texas has also treated failure to deliver paid metal as a deceptive practice rather than a plain breach of contract. That distinction is what opens the door to penalties on top of refunds.
Some matters end without a lawsuit, through a written agreement in which the dealer stops the practice and pays redress. It is faster than litigation and carries less penalty exposure, which is often why a dealer signs it.
Buyers caught in that pattern should see how bullion marking problems are documented, because the timeline and the written promises are what the state uses to build its file.
California enforcement actions and statutory basis
California attorney general enforcement action in bullion matters rests on three statutes. The Unfair Competition Law sits at Business and Professions Code section 17200, the False Advertising Law at section 17500, and the Consumer Legal Remedies Act at Civil Code section 1750.
The Unfair Competition Law lets the office seek restitution and injunctive relief for unlawful, unfair or fraudulent business acts. It does not require proof that each buyer relied on the claim, which makes it workable when thousands of small orders are involved.
Penalties are set per violation. Section 17206 allows a civil penalty of up to $2,500 for each act of unfair competition, and section 17536 allows the same for each false advertisement. In a telemarketing case with hundreds of calls, those units add up quickly.
The Consumer Legal Remedies Act adds damages for deceptive practices in the sale of goods, and punitive damages when the conduct is willful. Bullion and coins are goods, so the statute reaches them directly.
California's Unfair Competition Law is also the statute behind the 2010 action against Goldline International, brought by the Santa Monica City Attorney's Office and resolved by a 2011 stipulated judgment that restricted the company's sales scripts and funded consumer restitution.
California's size makes it a frequent venue for multistate actions. When several states investigate the same dealer, California often joins, and the resulting judgment can cover residents of every participating state.
Buyers who suspect a problem should keep the original order confirmation, because California courts treat the written offer as the benchmark for what was promised. Our bullion pricing guide shows how that record is assembled.
Common violations: misrepresentation, unlicensed sales, storage fraud
Three fact patterns appear again and again in state bullion files. Recognizing them early is the cheapest protection a buyer has.
Misrepresentation covers false claims about a coin's grade, mint, metal content or investment performance. It also covers omissions, such as a steep markup over spot left out of the sales pitch or a dealer's own buyback spread.
Unlicensed sales covers activity that requires a license or registration the dealer does not hold. Depending on the state and the product, that can mean investment adviser registration, money transmission licensing or commodity dealer registration.
Storage fraud covers programs where the dealer claims to hold metal for the buyer but does not segregate it, does not hold it at all, or charges fees on metal that was never bought. This is the pattern most likely to produce a large restitution order.
| Violation type | Typical state claim | Common remedy |
|---|---|---|
| Misrepresentation of grade or mint | Deceptive trade practices | Refund plus civil penalty |
| Undisclosed markup over spot | False advertising | Restitution and disclosure terms |
| Unlicensed sales activity | Licensing statute | Injunction and penalties |
| Storage fraud | Fraud and unfair competition | Full restitution, monitor |
| Failure to deliver paid metal | Deceptive practice | Refund plus penalties |
A worked example shows how these overlap. A dealer advertises government-minted silver at a fixed price, takes payment, ships privately struck rounds, and charges a monthly storage fee on metal never allocated. One set of facts supports a misrepresentation claim, a failure-to-deliver claim and a storage fraud claim.
That overlap is why state cases often settle with broad injunctive terms. A narrow fix would leave the dealer free to repeat the conduct under a different product description.
Penalties, restitution and injunctive relief compared
The three states price misconduct differently. New York leans on disgorgement under the Martin Act, Texas on statutory penalties with an elderly buyer multiplier, and California on per-violation penalties plus restitution.
| Element | New York | Texas | California |
|---|---|---|---|
| Main statute | Martin Act, GBL Article 23-A; Executive Law 63(12) | Deceptive Trade Practices Act, chapter 17 | UCL, FAL, CLRA |
| Civil penalty per violation | Up to $5,000 under GBL 350-d | Up to $20,000, and up to $250,000 if the buyer is 65 or older | Up to $2,500 under sections 17206 and 17536 |
| Restitution | Disgorgement and restitution | Buyer by buyer under section 17.47 | Restitution under section 17203 |
| Injunction | Common | Common | Common |
| Attorney fees | Not routine | Recoverable under the DTPA | Discretionary |
Restitution is the part buyers care about. It is calculated from the dealer's sales records, not from what buyers claim, which is why incomplete records shrink a recovery.
Injunctive relief is the part that changes behavior. Typical terms bar specific advertising claims, require written cost disclosures, prohibit commingled storage and impose compliance reporting for a set period.
Penalty totals depend on the number of violations, the number of buyers and the dealer's willingness to fight. A settlement announced at one figure can look small next to gross sales, because restitution covers only buyers who can be identified.
Buyers should also track the tax side of a recovery. A refund of principal is not income, but interest or punitive amounts may be treated differently. A bullion break-even calculation is a sensible place to start organizing the paperwork.
How consumers file complaints with each AG office
Filing costs nothing and does not require a lawyer. The complaint itself becomes part of the record that decides whether an investigation opens.
- Gather documents first: order confirmation, invoices, wire or card receipts, delivery records, storage statements, and every written promise the dealer made.
- Write a dated timeline of what was promised, what was paid, what was delivered, and what the dealer said when you complained.
- File with the attorney general in your own state, and with the attorney general in the dealer's state if the two differ.
- File a parallel complaint with the FTC, which feeds a national database state offices can query.
- Keep copies of every submission and note the complaint reference number for follow-up.
New York complaints go to the Consumer Frauds and Protection Bureau at the Office of the New York State Attorney General. The New York City address is 28 Liberty Street, New York, NY 10005. A second office sits at The Capitol, Albany, NY 12224.
The office accepts an online consumer complaint form and runs a helpline at 1-800-771-7755. Attach copies, never originals.
Texas complaints go to the Consumer Protection Division, Office of the Attorney General, P.O. Box 12548, Austin, TX 78711-2548. The division publishes a complaint form on its website and staffs a consumer hotline at 1-800-621-0508. Some disputes are routed to the division's mediation program before any suit is filed.
California complaints go to the Public Inquiry Unit, Office of the Attorney General, P.O. Box 944255, Sacramento, CA 94244-2550. The unit takes the online complaint form and answers at (916) 322-3360 or (800) 952-5225. Advertising complaints can be filed through the same unit.
- Order confirmation and invoice saved
- Payment records saved
- Delivery and storage records saved
- Written dealer promises saved
- Dated complaint timeline written
- Complaint filed with home state attorney general
- Complaint filed with the FTC
A complaint that arrives with documents is worth more than a paragraph of frustration. State intake staff triage by pattern, and a documented file is easier to match to other complaints about the same dealer.
Coordination with the FTC, CFTC and FINRA
State cases rarely run alone. The FTC sues precious metals dealers directly, and its published Cases and Proceedings | Federal Trade Commission shows the conduct that draws federal attention, including the 2011 action against Monex Deposit Company over leveraged metals claims.
The FTC can also issue notices telling companies that specific practices carry civil penalty exposure. Its Notices of Penalty Offenses | Federal Trade Commission explain that mechanism, which matters because a knowing violation after notice costs far more.
The FTC's Enforcement | Federal Trade Commission overview describes how a consumer protection case proceeds from complaint to settlement or litigation, the same arc a state case follows.
The legal basis for those federal claims sits in statutes such as the FTC Act. The agency's Statutes | Federal Trade Commission page lists them, and state consumer protection laws are often modeled on the same prohibitions.
The CFTC covers leveraged metals, futures and options on precious metals, and fraud in those products. FINRA covers registered broker-dealers that sell metals-related securities. The SEC covers mining and metals offerings that qualify as securities.
One dealer can draw all of them. A state attorney general may file a consumer protection case while the CFTC pursues a commodity fraud claim and the SEC examines an investment offering. Coordination agreements let the agencies share evidence.
What the pattern of cases tells buyers
The cases share a shape. The dealer promises something specific, takes money, delivers something else or nothing, and counts on buyers not keeping records.
Restitution almost always follows documentation. Buyers with invoices and written promises recover. Buyers who paid in cash or relied on phone calls often cannot be identified in the claims process.
Penalties do not replace refunds. A state can collect a civil penalty while buyers receive a fraction of what they lost, especially when the dealer is insolvent by the time judgment arrives.
Speed matters. Early complaints help state offices identify a pattern while the dealer still has assets to disgorge. Late complaints arrive after the money is gone.
A short list of buying mistakes and controlled fixes covers the conduct that shows up most often in these files, from wire transfers to unrecorded phone promises.
Buy from sellers who put every term in writing, who separate customer metal, and who do not promise returns. Those habits do not prevent every problem, but they produce the paper trail that makes a complaint actionable.
Common questions
Which state attorney general should I complain to?
Start with the attorney general in your own state, because that office protects its residents. If the dealer is based elsewhere, file a second complaint with the attorney general in the dealer's state.
Do state attorneys general handle single-buyer disputes?
Usually not as standalone cases. Most offices look for a pattern of complaints. A single complaint still enters the record and can help establish that pattern later.
How much restitution can a buyer recover?
It depends on the dealer's sales records and remaining assets. Courts order restitution based on documented purchases, and payouts come from what the dealer can pay or from a settlement fund.
Are civil penalties paid to the buyer?
No. Civil penalties go to the state. Restitution is the portion designated for consumers, and the two are tracked separately in most settlements.
Can I sue the dealer myself instead of filing a complaint?
Yes. Many state consumer protection statutes allow a private right of action, sometimes with attorney fees. A complaint to the attorney general and a private suit can proceed at the same time.
Does filing a complaint cost anything?
No. State attorney general forms and FTC complaints are free to file, and you do not need a lawyer to submit one.
