Florida brothers off to federal prison for coin fraud

By Paul Gilkes , Coin World

Published: Feb 5, 2020, 10 AM

The principals in U.S. Coin Bullion LLC in Orlando, Florida, are going to federal prison for fraud.

Computer screen capture of U.S. Coin Bullion LLC website home page.

Two brothers who defrauded some 150 customers of U.S. Coin Bullion LLC of more than $9.3 million have been sentenced to federal prison and ordered to pay restitution.

Salvatore Esposito, 47, was sentenced Jan. 10 by U.S. District Court Judge Carlos E. Mendoza to seven years and three months in prison. His younger brother, Joseph Esposito, 43, was sentenced to five years and 11 months in a federal penitentiary.

The Espositos each pleaded guilty Oct. 2, 2019, on charges of conspiracy to commit wire fraud and mail fraud.

According to court documents, the Espositos, from 2014 — two years after the company’s formation — through July 2019, engaged in a conspiracy to defraud U.S. Coin Bullion’s customers.

“Instead of using the customers’ funds to purchase precious metals as had been promised, the Espositos caused U.S. Coin Bullion to use customer funds to pay other customers, to pay commissions and other business expenses, and to purchase silver for the company itself,” according to court documents.

The Espositos took out loans to purchase the silver on margin and then used more customer funds to pay the interest associated with those loans, as well as storage fees for the silver.

When the price for silver fell from more than $35 an ounce in 2012 to less than $15 an ounce during the conspiracy, the company experienced massive losses and had to spend customer funds due to margin calls, according to the documents.

To cover up U.S. Coin Bullion’s losses, the Espositos provided customers with false account statements making it appear that the company had purchased the silver for the customers and not the firm and that their accounts maintained value despite any drop in the market price of silver.

“Ultimately, U.S. Coin Bullion’s margin purchases resulted in a loss of nearly all the market value of the silver that its customers believed they had purchased and held,” according to court records.”

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