Two Ex-Cons Fight for Stakes in a Gold-for-Cash Business

James D. Clark is delivering his father to the enemy.

It's the afternoon of April 19, the betrayal occurring around a conference table at the Tempe law office of Mark Sahl.

Clark's the son of prominent Arizona gold dealer Jim Clark, owner and CEO of Republic Monetary Exchange in Phoenix. He's getting deposed in a lawsuit against his father's precious-metals company, for which he'd been vice president of sales from July 2009 until January 2012.

His mom, Kathleen Clark, is in the room, but his dad isn't.

Leading up to this day, the lawsuit had been very personal for Republic's CEO.

It was filed in Maricopa County Superior Court in May 2011 for the benefit of Sherman Unkefer, a 30 percent owner in Republic since he and Jim Clark formed the company four years ago. If Unkefer wins, he'll have access to the company's treasured client lists and control over its management decisions by way of a court-appointed receiver.

Unkefer and Jim Clark had been good friends for years — back to the days when they were accused of defrauding clients at a major gold-selling firm in the mid-1980s. Both are convicted white-collar criminals who have done hard time for their deeds.

Now, after destroying a longtime friendship, the lawsuit has made a turncoat of Clark's son.

Rather than the series of "I don't recalls" that might be expected when a son is called to answer questions about his father's business, the statements under oath by Clark's boy are merciless.

"Would you go into business with Jim Clark, in any business?" attorney Sahl asks the younger Clark at one point.


"Do you trust him?"


Clark prefaces his testimony by explaining how his father had called him two days before the deposition to mention "specific concerns" about the testimony he knew his son was about to give — namely, about "the cash transactions" and how his son could have so much knowledge about them.

"What else did he say about the cash transactions?" Sahl presses.

"That it could — it could be problematic."

Republic's main business is selling coins and ingots, typically for investment purposes. It also buys precious metals. As with similar businesses, customers usually deal with independent salespeople who work on commissions in a high-pressure environment. Most of the business is done over the telephone, but there are plenty of walk-in customers. Often, they'd be handled by Clark's father personally in what Clark calls "Jim Deals."

Republic salespeople knew their boss had dibs on cash buyers, the younger Clark says in his deposition testimony. Dipping into Republic's inventory or his private stash of coins from two safes in his office, Clark sometimes gave customers the product and took cash. The CEO later replenished the company's inventory with products at wholesale prices, allegedly keeping the profit for himself and the transaction off the books. Jim Clark says his father made such deals nearly every other day, causing Republic to lose hundreds of thousands of dollars yearly.

An even more common "Jim Deal": The customer offers to sell a few gold or silver coins, and the CEO pays him out of his own pocket and keeps the profit for himself, James Clark testifies. That happened once or twice a day — and also resulted in several hundred thousand dollars a year in profit diverted from Republic, he says.

If cash deals did find their way into accounting records, Clark says, sometimes they'd be deleted. Clark says he told his father dozens of times to manage the financial records better. He names six current and former brokers for the firm who complained about the handling of such deals, but he says his dad ignored him. Jim Clark isn't "necessarily" malicious, but he gets "distracted" and "rubs people the wrong way, causing high turnover among brokers," the younger Clark tells the court.

Near the end of his testimony, Clark mentions that while he worked as VP of sales, he fretted that the way Republic handled its gold Individual Retirement Account deals for clients could be "frowned upon" by the IRS.

It's unclear why James Clark turned on his dad. He stood up for his father in July 2010 following a New Times article ("Gold Rush") that exposed the business' ties to the ex-cons, saying for a blog post that the company was well-managed and reputable ("Republic Monetary Exchange Manager Defends Company," Valley Fever blog, July 8, 2010). The relationship certainly has gone south since.

Assuming it's true, Clark's testimony backs up the argument behind the lawsuit, which alleged that his father wasn't sharing financial records — or profits — with his partners.

Not to mention that it doesn't look good for the business.

Yet if Jim Clark started the war by trying to cheat his old pal out of rightful earnings, that wouldn't bother Unkefer's enemies — the sons of his deceased wife.

Unkefer, who runs a major distributorship for a lucrative, multi-level marketing business called XanGo, has his own family problems.

Republic Monetary Exchange, in an office building at 4040 East Camelback Road, has become one of the state's most prominent gold-selling companies in its four years of existence.

It's the primary advertiser for conservative radio station KFYI (550 AM), which broadcasts "from the Republic Monetary Exchange studios," and nationally syndicated right-wing talk-show host Mike Gallagher, whose show airs on "the Patriot" (960 AM)

The company was founded by smart and personable convicted criminals.

Owner Jim Clark's an affable salesman who can turn on the charm when he wants. He has a hard side, though: He's staunchly right wing and has made headlines for wearing his pro-Arizona Senate Bill 1070 T-shirt to a Phoenix Suns game. He made big donations to Ron Paul's campaign. He attends a Phoenix church that holds all-Latin masses, yet he becomes emotional when speaking of the "enemies" of the Catholic Church, who include the current pope, in his opinion.

Accused of ripping off clients of Sheffield Metals, Clark served seven months in prison in the mid-'90s before launching Republic in 2008 with the help of his former business partner from infamously failed North American Coin and Currency, Sherman Unkefer III.

The early-'80s collapse of the Phoenix-based North American Coin company, which may have done $1 billion a year in business at one point, was the subject of headlines for years afterward. Hundreds of victims were out millions of dollars when the business unexpectedly declared bankruptcy in 1982. More than one type of fraud was committed, investigators later found. In the worst cases, clients who'd trusted North American to store sacks of gold and silver learned that its vaults had been cleaned out.

The aforementioned New Times article detailed some of the ex-cons' history as it explored various aspects of the modern-day gold craze.

Until the article was published, few knew that Unkefer, who was convicted of fraud in 1988 and served five years of a 10-year sentence before he was paroled, was a partner at the high-profile Republic Monetary Exchange. Corporate paperwork showed the owners were Jim Clark, his wife, his other company (Clark & Sons Vending), and a mystery company from California called Occidental Resources Group.

Unkefer's involvement was hidden from public view — shielded by complex layers of shell companies and trust funds. On paper, Unkefer owns virtually nothing himself.

The reason: The Maricopa County Attorney's Office is focused on him, hoping to force him to pay all or part of a $7.5 million criminal-restitution order from 1988. Hundreds of fraud victims have been waiting decades for the day that Unkefer forks over his fortune to them.

And that day appears to be growing closer — thanks, in part, to the lawsuit between Unkefer and Clark, which put more of Unkefer's financial documents into the hands of county lawyers.Most of the facts in this story come from numerous court files related to the pair, as well as from interviews with key players, including Jim Clark.

Unkefer, who lives in Scottsdale, declined to comment for this article.

Unkefer and Clark were friends when they founded the company and were friendly for a while even after the lawsuit was filed. But they should have known better than to trust each other.

Clark seems to have fired the first shot in the war by failing to pay Unkefer and his associates what they claimed they were owed.

Unkefer thought he was a 30 percent owner in Republic and that he should get distributions of profits. But Clark kept a significant portion of Republic profits for himself, the lawsuit alleges, while Unkefer's holding company was stuck with a proportional share of tax bills.

Helping both Clark and county lawyers are Mark and Harley Davidson, the adult sons of Unkefer's deceased wife, Sharon. They're potential beneficiaries of their mother's lucrative trust account, which they say Unkefer is misusing. They've filed a separate lawsuit against their stepfather that seeks a full accounting of the trust's finances, and which may have the effect of wresting away control of the trust from Unkefer.

Because Unkefer used trust money to invest in Republic Monetary Exchange, Clark paid for the Davidsons' attorney in that suit, hoping to dislodge information that would be helpful to his own case against Unkefer.

The information has been of use to the government attorneys trying to force Unkefer to pay his debts.

As for Jim Clark and Republic Monetary Exchange — the allegations that surfaced in the lawsuit raise questions of whether this gold man, who once gambled and lost his customers' money, is up to old tricks.

Clark and Unkefer launched their business in mid-2008, which was great timing.

The price of gold has more than doubled since then, going from about $800 an ounce to more than $1,600. The spectacular climb, combined with fears of economic collapse stirred up by right-wing talk-show hosts, has caused a frenzied demand for gold not seen since the 1980s. Gold was about $1,200 an ounce when New Times published the 2010 article, which quoted experts saying (accurately, in hindsight) that the price was expected to keep rising. Silver prices also have gone up.

After peaking last August at more than $1,900 an ounce, however, gold has become a shakier investment. It's been bouncing around $1,700. The latest estimates predict a continued rise in the price of gold through 2013.

Still, when Mike Gallagher tells listeners that they should buy from Republic because gold is "smart, safe, and profitable," they should exercise caution.

Because of the fees charged by companies like Republic Monetary, it's possible to buy gold and lose hundreds of dollars per ounce in the short term. Silver's price is even more volatile.

Long term, the price of precious metals could keep rising. But if it rises too slowly, then other investments are better choices. And, once bought, owners must decide how to store all that metal, possibly for years or decades.

Precious-metals companies used to offer to store the metals. That's what got Unkefer and Clark into trouble.

Clark sold some of his clients' gold and silver and made bad investments with the proceeds. Combined with slipshod management of his company's finances, Sheffield Metals declared bankruptcy in 2003 with $1.5 million in assets and $6 million in liabilities. Clark was ordered to reimburse $1.5 million to dozens of ripped-off customers, but by the time his probation ended in 2006, he had paid back only $42,000.

Meanwhile, he still is getting pestered from his earlier involvement in North American Coin and Currency.

Margaret Viall of Bakersfield, California, believes Clark and four of his associates from North American owe her about $35 million (plus interest). Her attorney in Arizona, Steven Lawrence, filed a renewal in federal court last year for a two-decades-old court award against Clark and the others in that amount. Viall's California attorney, Norris Bishton, tells New Times that he believes the award against Clark still is "pursue-able," but he wouldn't elaborate.

At the least, the renewal shows how some people never will forget what Clark did.

Yet it was Unkefer, president of North American back in the day, who set up the original deal with Viall in 1979 that resulted in the loss of 154 bags of silver coins.

Viall called Unkefer one day and told him she wanted to store 100,000 ounces of silver at his company, says a 1991 Ninth U.S. Circuit Court of Appeals decision. She told him it should be in bags with her name on it, not commingled with anyone else's goods.

A couple of years later, she asked her son-in-law to "visit my money" in Phoenix. North American employees showed him Viall's bags of silver.

After the company declared bankruptcy on September 23, 1982, the bags disappeared.

Documents show that Jim Clark, vice president, secretary, and treasurer of NACC, had "extensive responsibilities" for the storage of metals until late 1981, including overseeing vault operations, the decision states.

Clark never was charged criminally in the North American scandal, but Unkefer was convicted of fraud and sentenced to 10 years. He served five.

An analysis showed about 4,200 people had lost a total of about $16 million. Unkefer was ordered to pay $7.5 million in restitution. It would have been more, but the amount was capped under Arizona law.

The Superior Court judge overseeing the 1988 case, Gloria Ybarra, was incensed by Unkefer's lies and promises to pay back victims, who were — as she said during the sentencing hearing — "absolutely devastated" by the fraud. Unkefer hadn't repaid one cent in the five years since North American's collapse, she said, despite earning a decent living. Unkefer had been running a prepaid legal-service company with his new wife, Sharon Davidson, whom he married in 1983; Jim Clark had introduced them.

Ybarra told Unkefer she would make an example of him and hoped his case would be a deterrent to other unscrupulous business people.

Unkefer put his time in prison to good use; he prepared for the next phase of his life by earning an accounting degree.

After he was released from prison, Unkefer earned a living doing pre-paid legal-document work through the 1990s. Then, in the early 2000s, he got turned on to XanGo juice.

XanGo, a multi-level marketing company founded in 2002 by six guys from Utah, sells bottles of a fruit-juice cocktail for $25 to $35. It's a mix of apple and other juices, plus a secret quantity of its much-touted ingredient: juice of the Asian mangosteen fruit.

The company claims the juice has astounding health benefits, none of which have been proved. Yet thousands of people in several countries have bought the stuff, spreading the word through a chain of adherents rather than public advertising.

With an "MLM" like XanGo, it's all about being "upline." That's when you get into the business early and persuade other people to sell cases of the product for you. When they do, you get a cut. The majority of sales recruits down the line buy books and CDs on how to sell the stuff, accumulate cases of the product in their garages and never get close to big payoffs.

Unkefer and his wife "started making some big money — $90,000 to $100,000 a month," says one of Sharon's three sons, Mark Davidson, a former construction worker now employed at a Costco in Southern California. "Everything was put in my mom's name. [Unkefer] knew he was always on the hook for this [$7.5 million] restitution."

In 2005, Sharon asked Mark to move to their North Scottsdale property temporarily to help renovate the home. He lived out of an Airstream trailer and flew back to his wife and children in San Diego on weekends.

Harley Davidson, another brother, also moved in. He lives in Phoenix and plays in Deadbolt, a San Diego surf rock/psychobilly band he co-founded in 1988.

Sharon put her sons on "her" XanGo company's payroll and paid them extremely well, Mark Davidson says. There were family trips to Hawaii and Alaska. He even helped Unkefer buy a racehorse for $125,000, filling out paperwork with the Arizona Racing Commission for him and forming a bogus corporation in Davidson's name; Unkefer couldn't own a racehorse because of his felony conviction.

Unkefer is the "love of my life," Sharon wrote in a class-reunion bio in 2008 — the couple were "enjoying every minute" of their work with XanGo.

"My husband traveled approximately 380,000 miles last year," she wrote. "We will be going to Paris the last week in June and then off to the Grand Caymans."

Later that summer, however, Sharon grew gravely ill.

Harley contends she didn't get quality medical help early but believed XanGo juice would cure her.

"That snake oil killed my mom," Harley grumbles. "[Unkefer and others in the company are] just a bunch of scumbags and scam artists."

Of course, Harley and Mark Davidson profited from the XanGo scam, too, albeit indirectly. But Unkefer wasn't about to let them in all his plans.

The Davidsons didn't know it, but Unkefer and Clark were having meetings at the hospital where Sharon was being treated, discussing Clark's plan to open a gold-selling business. Clark had been banned from the business until his probation ended in 2006, but now he was raring to go.

Unkefer wrote a $50,000 check to Clark the week before Sharon died. Another $150,000 came a few weeks later.

Unkefer and Clark were back in the gold business together.

The Davidson family received a large life insurance payment after Sharon's death, but Unkefer's assistant and girlfriend, Laundy Unkefer — the ex-wife of Sherman Unkefer's oldest son — told them that Sharon did not have a will, Mark Davidson says. They had no reason to disagree with that. But they knew that Sharon had created a trust fund to protect the XanGo assets and income and that they were beneficiaries. They figured Unkefer would take care of them.

"Sherman said, 'When I die, you guys will get what's left of the trust,'" Davidson says.

To this day, Unkefer's website (www.shermanunkefer.com) brags that the XanGo juice distributorship he operates, X-1 LLC, "earns a 6-figure income MONTHLY and millions per year!"

That may or may not be accurate. Unkefer takes his salary, travel, and other expenses from X-1, which he doesn't own himself. X-1's owner, Mango Trust, was set up by Unkefer and Sharon.

The trust is in the Cook Islands, long a favorite of those who want to avoid transparency, because under the islands' legal system frequently ignores foreign court orders.

The trust, which records show could be worth several million dollars, is managed by Todd Hall of the San Diego law firm Teeple Hall. But there's also a co-trustee, Asia Trust Limited, which itself is managed by a trustee based in the Cook Islands.

Unkefer is the primary beneficiary of the trust. The document and Sharon Unkefer's will show that Sharon wanted Unkefer to use what he needed of the trust to maintain his lifestyle. But, in theory, he doesn't have complete control of it. He has to make requests for money from the trust from Todd Hall.

The Davidsons allege Unkefer "dictates" to Hall what he needs and that Unkefer has committed fraud in his accounting records to perpetuate the idea that he owns almost nothing. They want to strip Unkefer of the ability to use the trust, force him to pay back the aging fraud victims — and maybe put some of the dough in their own pockets, if possible.

The 2010 New Times article on Unkefer and Clark riled them, Mark Davidson says. Harley called him after reading it and spewed, "What's this shit about us owning a gold company?" Harley figured that because the brothers were "contingent beneficiaries" in Mango Trust, they had an interest in the gold firm.

When he asked Unkefer about his 30 percent investment in Republic, Davidson says, Unkefer stopped speaking to him. That's when Mark Davidson wrote the Teeple Hall law firm and asked for a copy of the trust. He says the firm told him he couldn't see it because he wasn't a beneficiary.

In the discovery process of the lawsuit, Davidson proved he and Sharon's other children were contingent beneficiaries, which means they, Laundy Unkefer, and Sherman's children will inherit the trust after Unkefer dies. It turned out that Sharon had, in shaky handwriting, signed a will the month before she died that cut out her children and placed all her assets in the trust for Sherman Unkefer's benefit for as long as he lives. Mark Davidson says he believes she did this to protect her children from potential legal actions against her husband.

But Mark says he now realizes that all the trust does is protect Unkefer from his fraud victims, in addition to hiding Unkefer's money. The accounting paperwork is unorthodox, leading Mark and Harley to believe that Unkefer is up to no good. For instance, an X-1 balance sheet from 2009 shows that $1.2 million was spent on "travel/other."

Mark Davidson came to the conclusion that "we all got screwed in this deal." It was past the two-year window to sue for changes to the trust, but Mark pressed Teeple Hall for a full accounting of the trust's finances.

There's an outside chance the Davidsons' lawsuit against Unkefer could result in a payoff from the trust to the brothers, Mark Davidson admits. But he and Harley say their overriding goal is to help the County Attorney's Office stick it to their ex-con stepfather.

"Harley and I don't want a dime of it," Mark maintains.

The Davidson brothers' professed loathing for Unkefer is difficult to fully comprehend, given their previous mutually beneficial relationship with him. One thing seems clear: If the brothers manage to knock the financial wind out of Unkefer, that's not what their mother would have wanted.

A year after his contribution to Republic Monetary Exchange, Unkefer signed an operating agreement with Clark in which he would receive a 30.4 percent ownership stake in the company. Unkefer's involvement was hidden behind a company called Occidental Resources Group.

That company, known as ORG, is owned by Occidental Management, managed by San Diego lawyer Todd Hall. Occidental Management, in turn, is owned by Mango Trust.

As they planned, Unkefer and Clark talked of how Unkefer would "own nothing but control everything," according to Unkefer's deposition testimony.

Under that plan, Unkefer's creditors from long ago would have a tough time trying to lay claim to any part of the gold firm.

The business relationship worked fine for a while. The capital investment allowed Jim Clark to launch the company. Unkefer helped with employee matters, gave occasional pep talks to the sales crew, and attended Republic Christmas parties.

However, e-mails between attorney Grant Teeple and Jim Clark in November 2010 suggest that Teeple worried that the "internal controls" for accounting used by Republic at the time weren't cutting it.

Teeple said he needed the passwords to accounting software used by Republic, but he was rebuffed by John Jakubczyk, Clark's lawyer.

By early 2011, representatives of the Teeple Hall firm demanded complete access to the company's books. Clark felt this would allow them access to company secrets, including lists of clients who themselves were like gold.

The tension grew by January, when Unkefer sent Clark an e-mail telling him to take Teeple's demands for information seriously.

"The important thing to remember here is that the trust is truly not owned or controlled by me," Unkefer reminded Clark.

Then, in March 2011, Unkefer — saying he was in the midst of a 50-city tour for XanGo — told Clark in an e-mail that he had just learned that Grant Teeple intended to sue Republic and that "there is not much that I can do about this."

Clark wrote back, "Don't play coy with me," adding that the pending lawsuit should be no surprise to Unkefer. Clark told Unkefer he'd hoped to buy out Unkefer because "this is obviously not working out for either of us."

Clark went on to say that Republic had spent "tens of thousands of dollars on reputation management" as a result of the "pesky" July 2010 New Times article. But, Clark said, the more the company grows, "the more you will be linked to it. It's unfortunate, but that's the way it is. We know for a fact it's cost us several million dollars in business already."

Clark warned that Teeple Hall could obtain tax returns and some financial info, but that no confidential client information would be delivered.

Given that information, Clark's position was that someone could steal away Republic's customers and that Republic could be sued by customers who felt their privacy had been violated.

Clark concluded the terse e-mail with, "Sherman, we've known each other for 38 years. You and I need to meet and work out a reasonable resolution . . . fair enough?"

Apparently not.

The lawsuit filed in May 2011 alleged that ORG was forced to pay taxes because of its investment in Republic yet didn't get its proper profit distribution. ORG demanded that Republic turn over all its financial data, which ORG said it had a right to look at under terms of the Republic operating agreement signed by Clark and Unkefer.

Unkefer claimed in his deposition that he had absolutely nothing to do with the lawsuit — it was ORG's doing.

Clark filed a counterclaim, saying he'd been the victim of misrepresentation and breach of contract. Instead of going into business with his old friend, he said he unknowingly had gone into business with two lawyers he'd never met — Teeple and Hall.

Yet Clark had told New Times in 2010 that Unkefer was not a partner of Republic's — he insisted the partner was the trust of Unkefer's deceased wife, Sharon.

In a more recent interview, Clark said he believed Unkefer controls Sharon's trust. Therefore, he argued, Unkefer was his actual partner.

And 'round they went.

Unkefer is cagey and arrogant in his deposition for the lawsuit, leading to some farcical moments.

Asked about his history, Unkefer says he's a "dropout like Bill Gates."

Unkefer downplays his leadership role with XanGo, denying he ever was a XanGo distributor.

"I mean, they certainly know who I am, you know, and regard me in a favorable way," says Unkefer, one of XanGo's top earners whose LinkedIn account describes him as an "independent distributor" at XanGo.

Clark's lawyer, John Jakubczyk, asks about one of several companies tied to Unkefer, GBSLU Inc., and Unkefer says he's not sure he's heard of it.

"Well, you're the president of it," Jakubczyk answers.

Unkefer's interrogation by Jakubczyk almost doesn't seem fair, because Jakubczyk and Clark knew, when Unkefer signed the Republic operating agreement in 2009, that his involvement in the gold company was mired in a maze of suspicious corporations and trusts.

Unkefer says Hall, as trustee of Mango Trust, had the Mango-owned X-1 company send him money specifically for the Republic investment. That, Unkefer contends, meant the money came from ORG, which also is owned by the trust.

But Jakubczyk uncovered a key discrepancy. When Unkefer signed the July 2009 operating agreement, he wrote that he was manager of Occidental Management, the parent company to ORG. But at the time, he wasn't.

"Apparently, [the manager of Occidental Management] had been changed a few days before that," Unkefer says.

"It actually had been changed back in April," Jakubczyk tells him during the deposition.


Jim Clark had been fooled — in one aspect of the deal, anyway.

But whether this information about the switch in managers would have changed Clark's deal with Unkefer over Republic can't be known.

Clark went into business with ORG, not Unkefer, according to the initial corporate filing for Republic Monetary filed with the state of Arizona.

Clark did make one sizable payout to Unkefer and/or ORG, both sides agree.

In early 2010, the CEO took Unkefer aside at Republic and handed him 32 gold coins (each was an ounce and worth about $1,100 at the time), saying, "This is a dividend."

Unkefer says he took the coins to Teeple Hall, to be deposited in bank account owned by Mango Trust. He says he made it clear to Clark that he expected more dividends if ORG incurred a tax liability.

Then, when ORG received a tax bill that year, it got Unkefer's attention. About the same time, Unkefer says, the trustees heard about improper accounting procedures at Republic — suggesting that the company had more money than Clark was saying and, therefore, should have made profit distributions to ORG.

Other case documents show that, in the months following Unkefer's August 2011 testimony, Teeple Hall stepped up demands for Republic's financial info and felt the demands were getting stonewalled.

But Clark and Jakubczyk viewed the demands as invasive.

An October 2011 motion by Clark's side states that ORG's lawsuit was really "a tactical attempt to engage in a fishing expedition seeking proprietary information to which [ORG] is not entitled."

A week before Unkefer's deposition, Clark amended Republic's corporate paperwork and deleted any reference to ORG's affiliation. Unkefer's initial investment of $225,000 was moved to an escrow account. That fall, Clark also used proceeds from a personal-injury lawsuit award to shore up the company's capital.

But then James D. Clark resigned from Republic and began buddying up to Unkefer and Teeple Hall, telling them about the "Jim Deals," prior to his April deposition.

Armed with the new information about the cash deals and supposedly "secret" meetings to add capital to the company, Grant Teeple told the Superior Court judge in the case, John Ditsworth, that Jim Clark was ruining the company. At Teeple's request, last March 27, Judge Ditsworth ordered that Republic be put into receivership.

Court-appointed receiver Kevin Singer showed up at Republic's office with five private security guards, telling people that Jim Clark would be removed as CEO.

An off-duty Phoenix police officer Republic employed as a guard told Singer and other guards that no one could enter the vault until Jim Clark showed up.

The CEO and his lawyer hightailed it to the office, called the judge, and persuaded him to quash the receivership the next day.

Teeple had a "laundry list" of grievances based on James D. Clark's assertions, Jim Clark says, adding that they weren't true.

The elder Clark admits that some "Jim Deals" took place, but he says they were minor and that he had declared them on his income-tax forms.

His son's testimony on the amounts were "absolutely and totally false," he tells New Times.

"Sherman offered James the [chief operating officer] position," Clark says. "He had motives. He buddied up with Sherman and those guys to steal the company."

James D. Clark, who founded a Valley oil-and-gas company called Core Resource Management following his resignation from Republic, denies that Unkefer offered him anything. He says he stands by his deposition testimony.

Jim Clark sued Core Resource last month, accusing his son of stealing some of Republic's client information.

The younger Clark called his dad's accusation "completely false."

The Republic CEO paints himself as a victim in the lawsuit with Unkefer, saying his company's accounting records were shown to be in order by a later independent review.

Recently, after more than a year of fighting, Unkefer and Teeple Hall agreed to settle with Clark and Republic. Neither side would reveal terms. But Jakubczyk says ORG essentially has been bought out of the company and that ORG and Unkefer no longer are part of Republic Monetary Exchange. Jakubczyk says ORG agreed in the settlement that it was never a part of Republic.

Jakubczyk also claims that the IRS isn't "frowning" on Republic's system of setting up gold IRAs.

James D. Clark says the terms of the settlement prevent him from making any disparaging remarks about his dad's company.

New Times spoke with another former employee, however, who reiterated the younger Clark's concerns about clients taking physical possession of metals intended for their IRA accounts. But the bigger problem, says the employee (who asked that his name not be published) is that Republic is allowing clients to place collectible coins in their IRA accounts, which runs afoul of the U.S. tax code.

The reason Republic wants to sell customers collectible coins rather than bullion for their IRAs, the former employee says, is that the markups for collectibles are far higher — running as much as 50 percent over the coins' estimated worth.

Here's how it works: A customer loaded with money in an IRA account calls Republic, hoping to convert that money into precious metals. A check is sent to transfer the money from the IRA to an LLC formed by the customer, and the LLC (managed by the customer) buys the gold or silver and stores it somewhere. The precious metals are considered part of the IRA and aren't taxed.

A customer of Republic's, who also declined to be named, confirms he possesses collectible coins in the gold IRA that Republic helped set up, but he believes that the practice is within the law. He admits, however, that he didn't check first with an attorney before setting up his personal LLC to manage his IRA.

Jakubczyk was asked for Republic's opinion on placing collectible coins in IRAs, but he had not responded by press time.

Jim Clark and Republic face some challenging times.

Clark has had little time to devote to his business in the past year, given his lawsuits.

Viall's $3.5 million (plus interest) settlement dogs him.

His son continues to war with him. Jim Clark says he believes his son turned over data about clients to Unkefer, undermining the most important reason for his defense against the Unkefer/ORG lawsuit. And his son has raised questions that the IRS might want to find out the answers to.

Continued demand in the precious-metals market could help Jim Clark and his business, at least through next year. (Some experts predict that the price of gold could peak in 2013 at about $2,000 an ounce.) Clark may end up a millionaire, but if his son is to believed, Republic's CEO may also be headed for more trouble.

Unkefer, meanwhile, could be nearing a final showdown with the state, though the restitution case still may take another year or two to resolve, the County Attorney's Office says.

After revving up the 1988 criminal-restitution order in 2008, and following several court proceedings, Unkefer and the county are moving toward possible mediation or another court hearing, says Jerry Cobb, spokesman for County Attorney Bill Montgomery.

The county hired a financial analyst last month to review Unkefer's records and "assist the court in determining a payment plan" for Unkefer, he says.

Assistant County Attorney Davina Bressler, who is handling the case, has received plenty of those records, thanks to Mark Davidson.

Cobb says the county has located about one-third of the 1,293 victims of North American Coin and Currency identified in an earlier tally. But the county still is looking to hold Unkefer to the original $7.5 million restitution, toward which Unkefer so far has paid only $4,030.

"The county attorney has continued to pursue the case out of his stated commitment to hold criminals accountable for their crimes, regardless of how long it takes," Cobb says.

Yet whether Unkefer is held accountable remains to be seen. It seems just as possible that he and Jim Clark could ride off into the sunset, their pockets still stuffed with someone else's gold.

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Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.
Contact: Ray Stern