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A jury on Thursday returned guilty verdicts in the fraud and tax evasion case against a former precious metals broker whose Wilmington vault was found to be missing some $50 million worth of investors’ gold and silver.
Robert Higgins of West Chester, Pennsylvania, along with his family operated First State Depository Co. and various precious metals brokerage businesses out of an office and vault facility off North Market Street for more than a decade.
Prompted by complaints from investors, federal regulators seized his business assets in 2022 as part of a civil case against those businesses. Investigators found his vault and business accounts were tens of millions short of what he owed to investors.
Federal prosecutors claimed that for a decade he promised to store investors’ precious metals in his vault on Todds Lane. Instead, he used their money to pay his debts and fund his lifestyle, leaving hundreds of customers, primarily small investors and retirees, with a small fraction of what they invested.
“These are real people who lost real money believing the defendants’ promises,” Assistant U.S. Attorney Alexander Ibrahim told jurors during closing arguments in Higgins’ criminal case Thursday morning.
After less than half a day of deliberation, the jury found him guilty of all charges: five counts of tax evasion, as well as wire fraud and mail fraud. Higgins, who is in his 60s, faces the potential of decades in prison when he is sentenced in the coming months.
The case against the Wilmington precious metals broker
Federal authorities in Wilmington spent eight days presenting to the jury piles of invoices and written correspondence between Higgins and his customers. Prosecutors said the evidence showed him knowingly defrauding investors and stringing them along with lies when they demanded he return their money.
Ibrahim said Higgins’ business faced insolvency due to a past-due, $10 million loan from the Israel Discount Bank in 2012 and he kept the business going for the next decade by fraud.
His first victim was William Koenig, who in February 2012 sought to invest $1.2 million in silver bars. Ibrahim said Higgins agreed to use Koenig’s money to purchase the silver and store it.
Prosecutors presented what they said were fraudulent invoices Higgins presented to Koenig showing the purchase of silver using his money. They compared that to bank records they said showed that $250,000 of that money was used to pay the bank loan and another portion used to purchase gold bars that were not related to Koenig’s silver investment.
“We don’t know what those gold bars were for, but they were not for Koenig’s benefit,” Ibrahim told the jury.
Ibrahim walked the jury through email records detailing Koenig’s years-long effort to close out his investment. That included years of “delays and excuses” that culminated in Higgins lying to Koenig about his investment being seized by the FBI. He told Koenig this while Koenig was wearing an FBI wire, Ibrahim told they jury.
“It was all a sham,” Ibrahim told the jury.
Prosecutors also outlined the testimony of five other victims with similar stories of fake invoices and manipulations by Higgins.
Ibrahim said in some cases, Higgins would never purchase the metals customers paid to invest in. In other cases, customers’ metals removed from their place in his vault and sent to satisfy other customers’ close-out requests. In some cases, customers were paying storage fees for metals that were either no longer or never in Higgins’ vault.
To bolster the financial-record evidence, prosecutors also emphasized testimony by Higgins’ two sons, Eric and Steven Higgins, as well as Danielle Leins, an employee of the business. Each testified under a grant of immunity so their testimony couldn’t be used against them.
Ibrahim said Eric Higgins told the jury he left the business and state in 2019 because of the lies his father told to investors. He said Higgins testified to seeing his father misappropriate customers precious metals, that his father knowingly violated his agreements with investors, that they argued about it, and that eventually he felt “trapped in quicksand.”
Read more: Millions in gold and silver missing from Delaware vault lands broker in criminal court
When a receiver appointed by the court conducted an accounting of Robert Higgins’ business assets in 2022, he found that metals worth some $58 million from about 1,000 customers were missing. Ibrahim said many customers were “completely wiped out.”
Prosecutors also emphasized evidence showing that while this money was missing, and after Robert Higgins told the court he was financially destitute, he tried to buy a Hummer with gold coins. Federal investigators also found tens of thousands of dollars worth of gold coins stashed in the ceiling of a guest room in his home.
The government also accused Robert Higgins of evading his taxes by reporting no taxable income from 2015 to 2019. In closing arguments, prosecutors compared those representations to bank records they said showing him transferring hundreds of thousands of dollars from his business accounts for his personal use.
At the same time, he was paying for lavish trips to places like Costa Rica and Belarus as well as a timeshare in Hawaii, Ibrahim said, showing the jury a Facebook post of Robert Higgins posing on a Hawaiian beach.
But where is the money?
Jeremy Gonzalez Ibrahim, Robert Higgins’ defense attorney, told the jury that prosecutors were picking evidence out of context to paint a false picture of fraud.
“That is not what is going on,” Gonzalez Ibrahim said. “He wanted to start a business to employ people, his family.”
He suggested Eric Higgins and Leins were more culpable than his client. He said they were the ones who were always at the business and were complicit or responsible for the accusations against Robert Higgins.
“You can’t take their testimony at face value,” he said.
He said communications entered into evidence showed those Higgins’ purported victims interfacing more frequently with Eric Higgins and Liens.
”The folks who ran it were the folks who had immunity: Danielle Leins and Eric Higgins,” Gonzalez Ibrahim said, arguing his client was simply trying to fix their mistakes.
He also argued that evidence showed that the receiver’s report outlining unaccounted-for metals failed to account for the true value of what was in the vault. He also tried to raise shortcomings in the accounting system used in that calculation.
He also noted his client’s personal assets don’t match the scale of fraud accused by the government, adding that Higgins doesn’t own a yacht and begging the question of where did the money go.
“Look at the evidence not presented to you,” Gonzalez Ibrahim told the jury.
Contact Xerxes Wilson at (302) 324-2787 or xwilson@delawareonline.com.