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

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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.

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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