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

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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.

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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