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Massachusetts Regulators Allege EmGoldex Is Massive Pyramid Scheme

Massachusetts securities regulators have filed civil fraud charges against a Massachusetts company that touted annual returns exceeding 1,000% through trading in "investment gold bars," alleging that the company was nothing more than a recruitment arm for a massive pyramid scheme.  Emgoldex Team USA, Inc. ("EmGoldex USA"), as well as officers Matthew Michael D'Agati, James Vincent Piemonte, Jonathan Herman Siegler, and Joseph Zingales, were accused of promoting multi-level marketing investments in EmGoldex, a company located off the coast of Africa.  The action seeks the imposition of sanctions, injunctive relief, disgorgement and remuneration of ill-gotten gains, and civil fines.

EmGoldex represents itself as an internet-based store offering investors the ability to profit through purported investments in gold bars.  Through various recruiting efforts concentrated in social media and word of mouth, potential investors are enticed with the prospect of massive fast, easy, and risk-free profits.  Emgoldex USA, the company named in the complaint by the Massachusetts Securities Division, purportedly operated as one of the recruiting arms of EmGoldex, using websites, social media, and live functions to recruit investors to join their recruiting downline.  Because EmGoldex offered significant incentives for the recruitment of additional investors, the efforts by EmGoldex USA to recruit new investors resulted in significant recruitment commissions.  

According to the MSD, Respondents and EmGoldex USA focused exclusively on recruiting new investors to join the EmGoldex Marketing Program (the "Marketing Program"), which was advertised as a prerequisite to purchase gold bars from EmGoldex.  Investors joining the Marketing Program were required to submit a "prepayment" for a set of investment gold bars valued at approximately 7,000 euros but which was typically significantly offset through "credit bonuses" payable later for the recruitment of new investors.  After submitting the prepayment, an investor would receive a coupon for a personalized website and an activation code allowing entry into the Marketing Program.  According to the MSD, an investor must then only recruit two new investors to become eligible for gold that can be exchanged with EmGoldex for a significant profit over their initial prepayment.  These profits ranged from 520% to 1,105% annually.  Additionally incentives programs were also offered that allowed even higher rates of return.  In total, EmGoldex USA raised nearly $500,000 from hundreds of investors.

At least one of the accused was apparently skeptical of this business model.  In late April 2014 - shortly after the Massachusetts Securities Division filed civil fraud charges against another Massachusetts company accusing it of being a massive $300 million Pyramid and Ponzi scheme - D'Agati emailed EmGoldex support services seeking advice on how to address questions surrounding EmGoldex's business model and whether it was a pyramid or Ponzi scheme.  The complaint indicated that EmGoldex's response made little sense, instead containing "legal jargon" and citing various European internet commerce laws governing enforceability of electronic contracts.  Despite this failure to address the issue, D'Agati and the remaining respondents continued to solicit investors.

However, according to the MSD, EmGoldex USA was nothing more than an illegal scheme that ensnared hundreds of Massachusetts residents in a massive Ponzi scheme.  These efforts allowed Respondents to earn significant "downline" commissions, and did not disclose to investors that (1) there were no gold bars or other product, and (2) their returns were entirely based on efforts to recruit new investors.  

The MSD's Complaint is below:



EmGoldex Et Al Complaint Docket No 2014 0056



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Reader Comments (10)

Emgoldex is absolutely legal online store, so what's the problem?

There was also information on the official website about scammers:

"These distributed fraudulent actions include the promise of fast enrichment, the investment of your own funds and rapid increase of your return. They also consist of receipting of potential customers funds in exchange for promises to create websites, similar to the style and design of the official website of the online store, but with the contradictory information. Moreover, they represent themselves or their legal entities as the employees of the company and online store, and many other unacceptable activities."


October 29, 2014 | Unregistered CommenterMax Drawler

What is it about Massachusetts and Ponzi schemes?

November 2, 2014 | Unregistered CommenterRandy Paul

Hello! Does anyone have any update regarding this case for Emgoldex? Is it OFFICIALLY DECLARED ILLEGAL or still in court? AND IF SO IS IT ONLY IN MASSACHUSETTS OR ALSO IN THE WHOLE UNITED STATES? Does this apply to EMGOLDEX or only for this UNOFFICIAL EMGOLDEX USA INC. ??


November 10, 2014 | Unregistered CommenterJohn

It seems the only country who stoped this 100% legal online business is USA, while 200 other countries and more than 600,000 costumers are getting gold bars we are still waitng for a hope, I'm not worried because most of my downline people in this Emgoldex Business are in Mexico and they're buying Kilos and kilos of gold... Go ahead and check in YouTube the latest of the V International Convention of Emgoldex, if you still think this is an illegal business POOR YOU GUYS!!!

November 12, 2014 | Unregistered CommenterIscoca

Great comment Iscoca! I am with you! I have several family members on Emgoldex in Japan, Peru, Mexico and they are doing real legal money. Great explanation of the business and video. I have the same opinion as you, I don't know why they are trying to block Emgoldex in the US. But I am pretty sure it has to be with money, politicians want a bit of it. Sad but true. And if Emgoldex is unable to send the gold to the US its because the US laws does not support other gold coming in from outside. The other more than 200 countries don't have that issue of receiving the Gold.

November 13, 2014 | Unregistered CommenterFarid

Just wanted my friend Torstein to know how easy it is to post comments on this thread..

November 21, 2014 | Unregistered CommenterKristoffer

Does Emgoldex have a gold trading license? The only license is the one from 2012.

On the Dubai Govt website under the trade name Emgoldex it says the Company is active but when u search for the trade license it says there are no active trade licenses registered in Dubai.

Yes people are receiving their gold and payments if they choose money over receiving gold but I just want to know if its legal or not.

December 27, 2014 | Unregistered CommenterLJ

it's DOA (Dead on Arrival) law suit.....

April 10, 2015 | Unregistered CommenterJust me

It's stated that there is a 500% up to 1000&+ return of investment.. Really?? That much??? Interesting huh????

C'mon! In stock market, it is very rare to achieve an average return of 20% IN A YEAR. How on earth an online business without an active trading license manage to return that huge return of investment?!? Wake up people! If it's simply too good to be true, then it is possibly illegal.

To those still believing and commenting that emgoldex is legit, I dare you, post here at least one very powerful proof and statement, enough to convince us all that it is legal. C'mon, post it..

April 28, 2015 | Unregistered CommenterDavid

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