Whistleblower: Victim finds jewelry was melted down

  • Article by: JANE FRIEDMANN , Star Tribune
  • Updated: September 12, 2012 - 10:48 AM

In contrast to pawnshops' 60-day holding requirement, Bloomington city code allows precious metal dealers to melt down purchases immediately.

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At home in Apple Valley with Gizzy and Abby, Mary Ritter explained how she found out her stolen jewelry was melted down by The Gold Guys shortly after the business purchased it.

Photo: Kyndell Harkness, Star Tribune

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Eight years ago, when Mary Ritter's jewelry was stolen from her home in Apple Valley, she found it at a pawnshop where, by state law, items must be held for 60 days before being sold.

When it was stolen this summer for a second time, Ritter was not so lucky.

This time it was sold to a precious metal dealer at the Mall of America, where, because of an exemption in Bloomington city code, the business has no obligation to hold purchases for any length of time.

Last month, it took more than two weeks for Ritter to notice that a basement window had been tampered with, realize the jewelry was missing and contact police. By then the fate of the six pieces of silver, gold and diamond jewelry had been sealed.

Ritter said it took police several days to track the merchandise to The Gold Guys, which, according to records obtained by police, paid $428 for it.

She said company employees later told her the bulk of the jewelry had been melted down within 24 hours.

The Gold Guys would not have been allowed to do that five years ago. But in 2007, the Bloomington City Council changed its ordinance to allow any company that put up a $50,000 bond to bypass a state law's requirement for a 14-day holding period.

The bond was meant to compensate anyone who can prove his or her stolen jewelry was sold to the business.

Bloomington's exemption is unique among 11 major Minnesota cities, where nine require dealers to hold second-hand jewelry for two weeks, and one, Minneapolis, requires a 30-day holding period.

The Gold Guys co-owner Joe Beasy said his business goes to great lengths to discourage thieves from trying to unload stolen jewelry there, and suggests Ritter should look elsewhere for compensation.

"[The thief] should pay back. He's the one with the money," Beasy said. "He took the goods, he stole them and he benefitted. He's the one that the law and she should go after."

It's not clear how Ritter could take advantage of the bond, which she didn't know about until informed by Whistleblower. Even if she were compensated, "I've lost my jewelry," said Ritter, 54. "While I might be able to go out and buy new jewelry, it won't be the same because it won't have been those sentimental pieces."

Strict or not strict enough?

For metal dealers, the luxury of being able to immediately sell or melt down merchandise is rare. State law requires a 14-day holding period, but allows cities to adopt stricter standards.

After it changed its precious metal dealer ordinance in 2007, the Bloomington City Council revisited the issue in late 2010 out of concerns that its safeguards weren't adequate. Businesses that opted for a bond in lieu of a holding period would also have to photograph all customers selling jewelry and other precious metal items, as well as the items themselves.

In December 2010, Beasy lobbied against the proposed photo requirements. At the time, City Manager Mark Bernhardson described him as out of compliance with the current ordinance.

Meeting minutes show Beasy argued that the city's rules were already burdensome and that "the days of jewelry burglaries are over."

Council Member Thomas Hulting questioned "the likelihood that the jewelry can be recovered if it is melted in one day." Police Chief Jeff Potts said that with photos or video, he thought it was possible.

Associate City Attorney Lisa Netzer said the amendment is a compromise between businesses and police. The council ended up approving the photo requirement.

The Gold Guys went along with the stricter requirements so it could continue to move fast in a volatile gold market, Beasy said, but the business typically holds pieces two to four weeks "when we can."

City officials, meantime, defend their policy.

"If anything we are constantly being condemned ... by people like The Gold Guys and the pawnshop guys for being more restrictive," Council Member Vern Wilcox said in an interview.

To date, no one has been compensated from the $50,000 bond put up by The Gold Guys, Potts said.

Photo ID is necessary

Minnesota precious metal dealers must record every transaction, with information from the customer's photo ID.

In addition, Bloomington dealers must submit a daily transaction report to police and, with the larger bond, take photos.

"There's no way that anyone can sell anything in our store and not get caught if it's stolen. If it's reported to police, we have it on record and we can find them," Beasy said.

The problem of stolen goods is "almost minuscule," Beasy added. He said a review of a year's worth of business at their mall location, 15,000 transactions or so, turned up only seven reports of stolen property.

"99.99 percent of our customers were just housewives and mothers and truck drivers," he said.

The ability of documentation to aid in the capture of criminals is small consolation to Ritter.

"I'm the victim here," she said.

If the thief had sold to a pawnshop or a Minneapolis dealer, Ritter might have been able to retrieve it as she did the frst time.

Despite being told her stolen diamond pendant, which hadn't been manufactured for 15 years, had been melted down, Ritter decided to search the Internet for it.

To her surprise, she said, she found what she believes to be the stolen pendant on eBay. She bought it for $295.

Bloomington police continue to investigate the burglary.

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