Chief Executive Officer of Superior Discount Coins Pleads Guilty to Defrauding Gold Coin Investors of More Than $2.4 Million
|U.S. Attorney’s Office September 12, 2013|
DENVER—James P. Burg, age 62, formerly of Fairplay, Colorado, pled guilty before U.S. District Court Judge John L. Kane today to one count of mail fraud and one count of failing to file an income tax return, federal law enforcement authorities announced. Burg, who is free on bond, is scheduled to be sentenced by Judge Kane on December 17, 2013, at 10:00 a.m. Burg was indicted by a federal grand jury in Denver on November 5, 2012. The indictment remained sealed until his arrest in California on November 29, 2012.
According to the indictment as well as the plea agreement, beginning on or about October 1, 2007 and continuing through and including on or about January 12, 2012, in Colorado and elsewhere, James P. Burg devised and intended to devise a scheme to defraud customers that ordered coins from a business known as Superior Discount Coins and Gold Run Investments and for obtaining money from those customers by means of materially false and fraudulent pretenses, representations, and promises. Burg took and received $2,464,099 from customers that ordered coins, and he failed to deliver the coins as promised.
As part of the scheme, Burg represented that he was the chief executive officer of a company known as Superior Discount Coins (SDC) and that SDC was in the business of selling coins. Burg also conducted business using a company known as Gold Run Investments (GRI) and represented that GRI was in the business of selling coins. At times, Burg operated GRI using the alias “Tim Burke.” Burg advertised and solicited customers through radio advertisements and over the Internet using websites he controlled, including www.superiordiscountcoins.com, www.yourcoinbroker.com, and www.goldruninvestments.net
Burg misrepresented and promised customers that if they ordered coins from SDC or GRI and paid him for those coins, he would deliver the coins to them or to accounts designated by them. He sent and caused to be sent to customers that ordered coins from SDC or GRI invoices stating amounts of money owed for the coins and, in some cases, providing information about a bank account to which the customers should transfer their money to purchase the coins.
A substantial portion of the money Burg received from customers was not used to purchase coins for such customers but instead he converted the money to his own use and benefit. Burg refused to refund money to customers in several instances where the customers requested a return of their money after he failed to deliver coins as originally promised. To prevent the scheme’s detection, Burg sometimes filled customers’ orders for coins only after such customers threatened to take legal action or report him to law enforcement authorities. Burg used one customer’s payment for coins to refund funds to another customer.
For calendar years 2003 through 2009, Burg failed to file income tax returns with the Internal Revenue Service as required by law. These returns were required to be filed with the IRS on April 15 following the subsequent above mentioned years. The investigation determined during the above years Burg generated gross income over $1.3 million for which he failed to pay income taxes on the income.
Mail fraud carries a penalty of not more than 20 years in federal prison and a fine of up to $250,000 per count. Failing to file a tax return carries a penalty of not more than one year in federal prison and a fine of up to $25,000 per count.
This case was investigated by special agents with IRS-Criminal Investigation, the Federal Bureau of Investigation (FBI), and the U.S. Postal Inspection Service.
The case is being prosecuted by Assistant U.S. Attorney Tim Neff.