CHICAGO (CBS) — One of the country’s largest gold buyers has shut down, and is now under investigation by state and federal agencies.
The action follows a CBS team investigation in five states, including here in Chicago, where 2 Investigator Pam Zekman went undercover to expose how company buyers misled consumers about the value of their gold.
The company is THR Associates, based in Springfield. Using a variety of names, it ran gold buying events in hotels across the country, saying customers would get fair and honest deals.
Now U.S. Postal Inspectors are investigating the Springfield-based company, and so is the consumer fraud division of the Illinois Attorney General’s office.
When CBS 2 went undercover to try to sell gold jewelry to THR, experts first valued the jewelry at more than $10,000, but warned the most we could expect from legitimate gold buyers was about 70 percent of that value.
However, a buyer for THR Associates offered only 38 percent value at a show in May, after failing to properly test the karats, and weighed all the jewelry together.
CBS 2 later asked her supervisor about the $3,800 offer.
“We always buy as low as we can,” the supervisor said.
As CBS 2 disclosed in May, other CBS producers in three cities were told 18 karat pieces were only 10 or 14 karats – and were offered less than a quarter of the gold’s actual value.
“I think a lot of managers did think it was okay to lie,” said former THR employee Dolly Dubard, who quit and is now one of more than a dozen former THR employees talking about practices that helped THR owner Jeffrey Parsons pile up $330 million in sales last year.
“I was always feeling guilty,” Dubard said.
Those employees, like Kenny Birdsall, were also upset that checks they wrote to buy customers’ gold bounced – $1.7 million dollars’ worth of bounced checks in April.
“It was very embarrassing,” Birdsall said.
Parsons could not be reached for comment.
A THR spokesman previously said company guidelines prohibit sales staff from lying to customers about the value of their gold, and that those who got bad checks would get their money.