LEAGUE CITY — Late in the evening of March 12, New York actor Bones Rodriguez was shopping online for an engagement ring when a gold auction caught his eye.
Rodriguez, 33, also was looking for a safe investment, he said.
“With acting, it’s feast or famine,” Rodriguez said. “I had some good commercial money and was looking for something to do with it.”
He thought he found it in League City-based IdealBullion, which was conducting an eBay auction of a 10-ounce gold bar.
Rodriguez submitted the winning bid. The next day, exhausting his savings, he sent a certified check for $4,326.99 to IdealBullion, headed by League City resident Ronald Kevin Rinehart.
In an e-mail, Rinehart told Rodriguez delivering the gold would take “awhile.”
“That’s OK, I trust you buddy,” Rodriguez replied.
It turns out that more than 100 others, some who sent IdealBullion their life savings, also trusted Rinehart. But Rodriguez and the others say they still are waiting for their gold — or at least a refund.
Rinehart, 39, declined to comment. Meanwhile, his legal problems are mounting.
League City police say they and the FBI are investigating a growing list of complaints from consumers across the nation about IdealBullion.
Last month, Rinehart filed for Chapter 7 bankruptcy, listing nearly 140 creditors.
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Civil Action
Also last month, Juan C. Hernandez, a Dallas attorney, filed a lawsuit in Galveston’s 10th Judicial District Court, asserting Rinehart accepted money for gold orders he knew he couldn’t fill.
“Defendants knowingly concealed the fact that they had conspired together to take the plaintiff’s money and not deliver the gold,” according to the lawsuit.
Hernandez sent $5,817 to IdealBullion. He said he got his money back with threats and help from the League City Police Department.
“It upset me so much that I posted an offer on eBay to represent those other members that were having problems with the defendant,” he said.
Investigators say they aren’t sure how much money Rinehart might owe eBay shoppers.
Initially, Hernandez was representing four IdealBullion customers who sent the company more than $16,000.
Since he filed the lawsuit, at least four more buyers have contacted the attorney, saying Rinehart owes them more than $54,000.
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‘Power Seller’
League City Police have talked to IdealBullion customers who say they sent anywhere between $4,000 and $20,000 to Rinehart.
Some angry IdealBullion customers, who have contacted each other via discussion boards on eBay, estimate Rinehart collected $400,000 from consumers for gold.
Though Rinehart declined to discuss complaints, he said he was what eBay calls a “power seller” in the “Titanium” category. That’s eBay’s highest designation and sellers must generate more than $150,000 in sales for three consecutive months to earn it. Titanium sellers also must maintain a positive customer feedback rating of at least 98 percent.
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‘I Deliver’
Randy Litton of Indian Trail, N.C., said he initially was reluctant to participate in IdealBullion’s auction.
But in January, Litton decided to bid on two five-gram gold bars.
Litton sent IdealBullion $1,037.94, but never received the gold bars. His attempts to recover his money have been unsuccessful, he said.
But before sending his payment, Litton e-mailed Rinehart with concerns about IdealBullion’s payment options.
The company didn’t accept credit cards, a red flag in online commerce, experts say. By paying through Western Union, money order or cashier’s check, the buyer was at risk, Litton, 38, said in an e-mail to Rinehart.
Also, Litton said he was concerned because he didn’t have access to IdealBullion’s customer feedback.
“How do I know I’ll be getting the merchandise? I can not even read your feedback because it is private,” Litton said in Jan. 5 e-mail to Rinehart.
“All I can say to your e-mail is: I DELIVER!” Rinehart replied.
Litton, a computer draftsman, said the transaction didn’t ruin him financially, but it hurt.
“I don’t have that kind of money just to forget about it,” he said.
Just how long IdealBullion operated under Titanium status and displayed the icon is unclear. Citing privacy, eBay declined to answer questions about the company. The Internet commerce company, however, did confirm it shut down IdealBullion’s trading account. But it won’t say when and it won’t comment specifically about a seller.
“As soon as we become aware that someone has become a bad actor, we will take what we consider appropriate action,” said spokesman Hani Durzy.
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Payment Protection
eBay offers protection for buyers who don’t receive items they’ve paid for or got merchandise significantly different than described by the seller. But it’s only up to $200, which includes a $25 processing fee, meaning the maximum reimbursement is $175. But even those services aren’t available to people who paid with cash or such instant money transfers as Western Union or MoneyGram.
Durzy suggests that eBay traders use credit cards, which typically offer protection, or buy from businesses that use PayPal, an eBay service that also offers some security.
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Chapter 7
Just how much money consumers will be able to collect from Rinehart is unclear. On June 30, he filed for Chapter 7 bankruptcy protection. Under it, Rinehart will liquidate assets and distribute them to creditors. Court documents don’t reveal the amount of Rinehart’s assets or liabilities, but do show he owes nearly 140 creditors, many whom have lodged complaints, including Rodriguez and Litton.
Typically in bankruptcy, debtors are able to reduce what they owe creditors to pennies on the dollar.
But attorney Hernandez said the bankruptcy should not interfere with his clients’ ability to recoup their money because their lawsuit asserts fraud.
Many of IdealBullion’s customers contacted The Daily News after learning of a May 12 story about how Rinehart planned to open The Contemporary Child, an upscale children’s clothing store on Marina Bay Drive in the South Shore Harbour II center.
Rinehart, the father of two girls — an infant and a toddler — has not opened the store. He operates a Web hosting business called Ideal- Ventures.
The Better Business Bureau said it had received about 10 complaints against IdealBullion. The company resolved one complaint by reimbursing the person who lodged it, said John Abrams, dispute resolution coordinator for the bureau.
League City police say they continue to investigate the complaints.
“Our mission as police officers is to help these people get their money back and at the same time if a crime has occurred follow the case up correctly and collect all the facts we need for a successful prosecution,” said Capt. Patrick Bittner of the department.
Meanwhile, Rodriguez did buy that engagement ring — on eBay — and proposed to his girlfriend last month. She said “yes.”
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How To Buy More Safely Online
• Determine the company’s refund and return policies before ordering.
• Get a physical address and good contact information for the company and ask how to get follow-up service. A reputable company will be willing to provide that.
• Pay for purchases with a credit card. Your transaction will be protected by the Fair Trade Billing Act. Be wary of companies that are unwilling to accept payment via credit card.
• When purchasing from an online auction, verify the sellers’ identities and check their reputations. Look for sellers with high satisfaction rates and established track records.
• Always print the confirmation page when completing an online transaction.
• Check the company’s Reliability Report with the Better Business Bureau before doing business with it. A quick look at public report may save you a great deal of frustration and stress. Consumers can check out any company’s Reliability Report at: www.bbb.org.
• If it seems too good to be true, it probably is.
