• 35 mins The Year Of The Retail Investor Keeps Getting Bigger
  • 22 hours Airlines Could Recover, But Crew Remain Elusive
  • 23 hours Meet The Man Behind The World's Most Exciting Oil Play
  • 2 days Crypto-Mining Immigration Could Be The Start Of A New Trend
  • 4 days Hawkish Fed Sends Gold Prices Crashing
  • 5 days Bezos Is Heading To Space This Sunday
  • 8 days El Salvador’s Surprise Bitcoin Move
  • 11 days Markets Unfazed As Inflation Hits 13-Year High
  • 12 days How the Token Economy is Disrupting Financial Markets
  • 14 days FBI Investigating 100 Types Of Ransomware Attacks
  • 16 days Fed Ends Corporate Credit Emergency Lending Program
  • 18 days AMC Becomes the Latest Winning Meme Stock After GameStop
  • 19 days The Real Reason Your 401k Has Been Lagging
  • 20 days China Lifts Cap On Births, Allows Three Children Per Couple
  • 22 days The Market Is Ripe For Another GameStop Saga
  • 25 days Senate Grills Big Banks Over Pandemic Opportunism
  • 26 days Cannabis Has A Major Cash Problem
  • 27 days Ransomware Netted Criminals $350M In 2020 Alone
  • 28 days Russia Is Taking On Google
  • 29 days Chinese Regulators Deal Another Big Blow To Bitcoin
Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

Clint Siegner

Clint Siegner

Clint Siegner is a Director at Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by…

Contact Author

  1. Home
  2. Markets
  3. Other

Northwest Territorial Mint Scandal: Investors Had Fair Warning on This Blowup As Well

Originally posted on Money Metals Exchange


The news unfortunately just keeps getting worse for customers and creditors of Northwest Territorial Mint. The prominent bullion dealer located near Seattle, Washington filed for bankruptcy court protection at the end of March. The losses of customers who never received delivery of orders plus the losses of other creditors could be as high as $50 million, according to investigative reporting by the Federal Way Mirror.


The U.S. Trustee in charge, Mark Calvert, recently estimated the firm has $56 million in liabilities and only $6.4 million in assets. He figures the recovery for unsecured creditors will be less than 10%.

Northwest Territorial's former owner, Ross Hansen, seems to be blaming the bankruptcy on a defamation lawsuit that he and his firm recently lost.

The judgment was $38.3 million in total and the court ordered Hansen to pay $12.5 million promptly. He filed for bankruptcy protection instead.

The libel damages stem from a website Hansen created apparently to wage a campaign comparing a former landlord to infamous Ponzi scheme operator Bernie Madoff. He and the former landlord apparently had some disagreements.

Ironically, it appears Hansen is the one who may have something in common with Madoff. At a creditor's meeting last week, trustee Calvert said, "Based on our analysis to date, the bullion sale of operations have attributes of a Ponzi scheme."

The libel judgment may have been the final straw, but it wasn't the only problem. Customers who ordered from this mint often experienced extraordinarily long delivery delays - 8 to 10 weeks, and even as long as 6 months.

Calvert believes the funds received for new orders were used to buy metal needed to deliver orders placed long before. If that's the case, the mint was effectively borrowing money from its hapless customers to finance its business. And this practice may have been going on for as long as a decade. Yet, remarkably, customers continued to do business with the mint even as most other precious metals dealers across America make immediate delivery.

The bankruptcy, the potential fraud now under investigation, and the millions in likely losses represent another black eye for the industry. It comes on the heels of other high profile failures including a "low-price" dealer known as Tulving Company and Bullion Direct.

Regulation Won't Help: There Is NO SUBSTITUTE for Doing YOUR OWN Due Diligence

No one should be surprised if bureaucrats in state and federal government take up the issue and "ride to the rescue" with new regulations claiming to protect customers.

The problem is that do-gooder politicians have a miserable track record when it comes to defending consumers generally - and metals investors in particular. In the Northwest Territorial Mint case, the Washington State Attorney General's Office had received hundreds of complaints, but didn't take any actions which prevented the blowup. History shows that regulations will definitely increase costs to customers and probably not have any positive effect on reducing corruption.

The Northwest Territorial Mint debacle may cost people $50 million. The only thing worse would be to bring in the regulators to inflict further harm on all dealers and all customers nationwide.


The CFTC spent 5 years investigating the bullion banks for price rigging the silver futures market. Ultimately they declared there was "no viable basis to bring an enforcement action." That's embarrassing, given that Deutsche Bank just admitted to price rigging in the gold markets during the period when the CFTC was investigating. In mid-April, they agreed to pay a settlement and provide evidence to assist plaintiffs in their suit against the remaining banks.

But the CFTC isn't the only bureaucracy to fail in protecting investors. The Federal Reserve, which has been charged with regulating banks despite being privately owned by the largest among them, and the SEC complete a triumvirate of incompetence.

Banks have paid more the $200 billion in fines and penalties associated with fraud, rigging markets, and cheating customers since the 2007 financial crisis. Not a single high-ranking executive at any major bank has been prosecuted or sent to prison. It looks like these fines are simply a cost of doing business. The ill-gotten profits and bonuses run far in excess of what was paid.

SEC staffers may have been too busy watching porn to prosecute anyone. Or maybe regulators are worried about damaging their prospects for a great paying job on Wall Street. The most competent people responsible for regulating the banks wind up working for them instead. And many of those who remain would like to do so as well.

While they are substantial to the 3,500 poor souls who are impacted, the losses at Northwest Territorial don't amount to much in comparison to these larger swindles. Investors should pray politicians and government bureaucrats don't try to "help."

Getting Actual, Prompt Delivery of Your Metals Is More Important Than Getting the Lowest Price

Bullion buyers are going to have to help themselves. Customers following a couple simple steps could have avoided most of the losses in recent dealer bankruptcies.

Prompt Delivery of Metals

Do an internet search for Better Business Bureau reviews on the company and look for a pattern of problems, particularly slow deliveries. There must be a reasonable explanation for delivery delays, and they should not be persistent and across all products. WARNING: a company that constantly struggles with making prompt delivery may be undercapitalized or outright insolvent.

Mounting issues were apparent at both Tulving and Northwest Territorial Mint going back months or even years. So when purchasing precious metals from any dealer, get a commitment upfront regarding when your order will be delivered - and pay close attention to whether that commitment is kept.

Businesses can and do fail, but it rarely happens suddenly and without warning. They generally start missing commitments first.

Remember that getting a good deal is nice, but getting delivery of what you paid for is far nicer. Choose your bullion dealer carefully, and you're unlikely to get a raw deal.


Back to homepage

Leave a comment

Leave a comment