Kevin DeMeritt, the founder of Lear Capital and self-proclaimed business professional, has been the subject of numerous controversies, predominantly due to the deceptive business practices of his company. The reality is far more sinister, involving allegations of fraud, concealed fees, and the exploitation of vulnerable investors, despite his polished image.
Kevin DeMeritt’s orchestration of a series of scams that have left countless victims in their aftermath is the subject of this exposé, which explores the dark side of Lear Capital.
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Kevin DeMeritt’s Illusion of Professionalism
Lear Capital, a California-based precious metals merchant, has aggressively promoted itself as a dependable source for investing in gold and silver coins. The company has attracted numerous unsuspecting investors by means of persistent outreach efforts and alarming advertisements that warn of impending economic catastrophe. Nevertheless, the uninformed and the elderly are exploited by a web of deceit that rests beneath this veneer of professionalism.
The Scandal of the Hidden Fees
The imposition of exorbitant transaction fees, which are frequently concealed until after the transaction is finalized, is one of the most flagrant aspects of Lear Capital’s business practices. Customers have reported being taken by surprise by fees as high as 33%, which considerably reduce the value of their investments. Regulatory authorities have taken note of these practices.
Letitia James, the New York Attorney General, filed a lawsuit against Kevin DeMeritt and Lear Capital in June 2021, asserting that the company had neglected to disclose millions of dollars in commissions. The lawsuit emphasized the fraudulent charging of these undisclosed fees by Lear Capital, with a particular emphasis on elderly residents in Western New York.
This legal action accused the company of violating state laws that mandate the registration of commodity broker-dealers and telemarketers with the state, thereby subjecting their deceptive practices to regulatory scrutiny.
Settlements and Legal Consequences
Lear Capital and DeMeritt have encountered substantial legal obstacles. A consent order was filed in the New York Supreme Court in response to the New York lawsuit, which required Lear Capital and Kevin DeMeritt to pay $6 million to resolve the claims.
These funds were designated for distribution to eligible New York consumers who had been harmed as a result of Lear’s misconduct. Additionally, Lear Capital was compelled to modify its business practices in New York, which included offering a 24-hour revocation period for specific transactions and providing transparent fee disclosures.
Nevertheless, the legal complications did not conclude at that point. The Los Angeles City Attorney also filed a lawsuit against Lear Capital in 2019, which underscores the company’s extensive fraudulent activities. Collectively, these lawsuits presented a damning depiction of a company that was dedicated to the relentless pursuit of profit at the expense of its customers, and that was engaged in systematic deception.
NY Attorney General Letitia James Sues Lear for Defrauding Clients:
New York Attorney General Letitia James filed a lawsuit against Lear Capital in July 2021 for deceiving around a thousand New Yorkers. Similar to the case of the Los Angeles City Attorney, AG James stated that Lear had collected about $10 million in unlawful profits by charging upto 33% in hidden commissions.
The AG stated that Lear Capital’s business model depended on cheating nearly 1,000 New York residents who didn’t want to lose their retirement savings. Her lawsuit also states that Lear hasn’t registered as a telemarketer, commodity investment adviser and as a commodity broker-dealer as well.
NY AG’s court filing also included 13 affidavits from state residents. For example, a 78-year-old New Yorker shared that he received phone calls from Lear in 2016. He told the company that he was only interested in investing in bullion and after receiving calls from Lear for over 2 years, he sent them 900 ounces of silver bullion and $20,000 cash.
In exchange, they sent him 36 platinum bars. Then, Lear Capital persuaded him to liquidate the gold and silver present in his IRA and invest the amount in platinum bars through them.
The Akon man sent Lear 640 ounces of silver bullion in exchange for additional platinum later that year. He eventually realized that he had paid around $42,300 in cash and silver bullion for around $28,000 worth of platinum. Moreover, he sold gold and silver present in his IRA worth around $29,000 to purchase platinum worth around $19,640.
AG’s lawsuit also shares how Lear scams unsuspecting investors. After having multiple unrecorded conversations, Lear Capital tells consumers who had agreed to buy coins that they needed to make a recording to verify the terms of purchase. The company would then tell them to answer “yes” to every question on the recording and that it was only a formality.
Also, they would tell the consumers that if they answered otherwise, they would have to start over.
The lawsuit says that the recording is how they trap investors. They bury a dangerous question among various innocent ones which is: “Do you understand that the ask to cost fee is 33%, yes or no?”
Kevin DeMeritt, the founder of Lear Capital, has coined the phrase “ask to cost fee”. The company points to this phrase as evidence of consent for their unethical fees.
Each of these Lear Capital lawsuits shows just how dangerous this firm is. These are proof of why you can’t trust this bullions dealer.
The Bankruptcy Strategy
Lear Capital filed for Chapter 11 bankruptcy due to increasing legal obligations and financial obligations. Kevin DeMeritt consented to contribute $5.5 million to establish a Customer Fund as part of the reorganization plan.
The objective of this fund was to provide compensation to consumers who had submitted claims, thereby preventing the need for extended and expensive litigation. Although this action offered some solace to investors who were impacted, it also underscored the severity of the ethical violations and financial mismanagement that occurred during DeMeritt’s tenure.
Continuous Criticisms and Reputational Damage
Lear Capital and Kevin DeMeritt continue to endure substantial public criticism, despite their efforts to reform their business practices and the legal settlements they have reached. The company’s initiatives are perceived by many as inadequate, particularly in light of the extent of the deception. Critics contend that the high commissions and aggressive sales strategies implemented by Lear Capital are indicative of a more extensive culture of exploitation and avarice.
These controversies have significantly tarnished Lear Capital’s reputation. The dissatisfaction and mistrust that the company has fostered are emphasized by a multitude of online reviews and testimonials from former consumers. These accounts depict a company that prioritized profits over ethical conduct, recounting traumatic experiences of financial loss and betrayal.
In the case of Kevin DeMeritt, his narrative serves as a stark reminder of the rapid descent that can result from the pursuit of wealth when combined with unscrupulous practices. The victims may have received some degree of justice through the legal actions and settlements; however, the financial security and peace of mind that were harmed cannot be easily restored.
Ultimately, the Lear Capital case serves as a reminder of the necessity for transparency, accountability, and integrity in the financial sector. The only way to prevent such malpractices and guarantee a fair and equitable marketplace for all investors is through vigilant consumer advocacy and stringent regulatory measures.
Conclusion
The narrative of Kevin DeMeritt and Lear Capital functions as a cautionary tale regarding the significance of regulatory supervision and the perils of unbridled corporate greed. Although DeMeritt may persist in presenting himself as a business professional, the truth is that his legacy is tarnished by allegations of fraud, legal disputes, and a tarnished reputation.
The lesson is evident to investors, particularly those who are elderly and inexperienced: it is essential to exercise skepticism and conduct thorough due diligence when engaging with companies that guarantee substantial returns on precious metal investments. The potential pitfalls and hidden costs that may lay beneath the surface should not be overlooked due to the allure of gold and silver.