Texas coin companies target elderly investors

Heads you lose, tails you lose

In his deposition, Rollins said that he approached his managers several times to complain. "I wanted answers. I just wanted to know, hey, just for my own conscience, tell me this is the right thing we're doing." He was called a cancer and instructed to make more calls, he said.

"When [customers] start saying, ‘hey, I'm putting liens on my house to buy coins' and shit like that, and you say, ‘hey, that sounds great,' I mean, look, it gets hard to sleep at night," said former Universal Coin & Bullion employee Shannon Smith in his deposition. "I mean, shit, that guy's probably doing this to help his kid get through college, and I just knocked his head off."

In his deposition, Rollins said he felt betrayed by the companies. "I couldn't get taken care of by the only company that I trusted and — you know, them people were my family," he said.

Coin expert Michael Fuljenz doesn't like the term "high-pressure." He prefers to call his salespeople enthusiastic.
Todd Spivak
Coin expert Michael Fuljenz doesn't like the term "high-pressure." He prefers to call his salespeople enthusiastic.
Fuljenz has written several award-winning books on rare coins, which he uses to direct customers to his Beaumont-based companies.
Fuljenz has written several award-winning books on rare coins, which he uses to direct customers to his Beaumont-based companies.

And he got tired of betraying the trust of his customers.

"We were taught that they'll never send their last dollar," Rollins said, "but it happens."


Kathleen Watkins, an 85-year-old widow, has taught classical and jazz piano and voice from her home in Austin for more than 50 years. She and her late husband, a two-star general in the U.S. Air Force, had amassed a savings of nearly $400,000.

"I always managed my finances in a superb way," says Watkins, who continues to teach, though she is on kidney dialysis three days a week. "I planned to use it to help my grandchildren and great grandchildren go to college."

Then in 2001, she responded to a First Fidelity Reserve ad for some silver dollars for her grandkids, and like dozens of others, her finances were quickly turned upside down.

"The supercharged sales tactics that they used were unbelievable, absolutely unbelievable," Watkins says, recalling the urgent late-night phone calls she frequently received. "Once they get your name, they hound you like you wouldn't believe. They pursue you like a fox."

Watkins had the misfortune of dealing with Jason Whitney and another salesman. "They described themselves as convicted, committed Christians," she says. "They asked me to pray for their kids. We were great friends, I thought."

Most experts encourage investors to move no more than 15 percent of their liquid assets into coins. Fuljenz and his partners in Beaumont advise no more than 25 percent. Watkins and several others who are plaintiffs in the pending litigation invested 100 percent, based on the advice of their so-called brokers.

"I feel like such an absolute fool," Watkins says. "I feel so ashamed of it I could just crawl in a hole."

Watkins says she still has not told several of her own children.

"My mother's salesman explicitly told her not to tell me about it," says Tenley Carp, a Washington, D.C.-based attorney whose 79-year-old mom, Pauline Cowdery, emptied her savings into coins bought from First National Reserve.

"The salesman befriended her," Carp says. "He cultivated a cozy relationship so that she would trust him. Then he completely took advantage of her."

In case after case, it is the children who are left to clean up after their parents' shattered finances.

Maureen O'Neill-Davis learned about her mother's dubious investments from a concerned family friend. "I was fuming," says the 41-year-old Florida resident.

O'Neill-Davis called the Beaumont coin companies to complain but was hung up on, she says. Then she filed formal complaints with attorneys general offices in Texas, Florida and Connecticut. But nothing came of them.

"My mother is gullible," says O'Neill-Davis. "She grew up in an era like many elderly people where they believe that people are generally good and honest and have everybody's best interests at heart, kind of like neighbors.

"So when she sits there and starts to feel like she's developing a rapport with somebody, not thinking that they have any agenda to screw her out of her hard-earned dollars, she's gonna divulge all kinds of information. And she does. And she did. And it came back to bite her in the butt.

"That's my mother. She's honest. She thinks everybody is."

FOLLOW-UP: In a deposition taken nearly four months after publication of this article, Maureen O’Neill stated that she did not invest her entire life savings in coins; she testified that she had assets worth substantially more than she spent on coins. Ms. O’Neill testified that she lives on a fixed income and had to take money out of a certificate of deposit and stocks to buy coins, that her total purchases were nearly $190,000, and that she believes she was charged about $100,000 more than the coins were worth.

In the deposition, Ms. O’Neill also stated that she did not take out a $50,000 home equity loan for the purpose of purchasing coins. Ms. O’Neill testified that she had a preexisting home equity line of credit and drew $30,000 on that line of credit to buy coins.

Also, Ms. O’Neill testified that she did not use money from her IRA accounts to buy coins because she was unable to do so. She testified that she did move money out of stocks and cashed in a CD to buy coins. Further, she confirmed that her daughter filed a complaint with Florida authorities that 1st National Reserve representatives encouraged her to sell her retirement holdings in order to make coin purchases, which she did.

Finally, the Houston Press article refers to “depositions” of former First Fidelity Reserve employees Lance Loftin and Aaron Freeman. These were actually sworn statements under oath from these former employees, but were not “depositions” because the former employees were not subject to cross-examination.

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