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They thought they were making a secure investment, but they wound up losing a fortune.
In a report by New Zealand Herald, a family got into bullion investment of over $340,000 with Auckland-based Grace Holdings NZ Ltd, a company run by sole director Robert Kairua.
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The company's Web site had previously advertised heavily as "New Zealand's trusted name in bullion trading" on television and radio.
Rose Fraser and her children John and Lela, all from Christchurch, invested $341,700 (US$285,000) in leveraged options with the firm, hoping the profits from its gold sale would be more than the interest payable.
John Fraser also ordered $85,000 worth of silver bullion from the company and spent months waiting for it to arrive.
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In an unfortunate turn of events, Rose's husband and John's father, former TVNZ journalist Brent Fraser, said he spoke to Kairua on Wednesday and the firm director eventually admitted to him that his family will not be getting their money back and John will not get his bullion.
Fraser told the Herald Kairua blamed the loss on trader Elijah Geldman, who had since left the company.
"[Kairua] told us the money was being held in a vault in Europe and it was backed by Lloyds of London as an insurer and now he's told me that ... Elijah Geldman has gone and folded all this money somewhere else."
Gus Elijah Geldman resigned last September after Herald revelations that he had been charged with fraud by US federal authorities.
The Serious Fraud Office received two calls about Bullion Buyer website on Wednesday and SFO chief executive Adam Feeley said the complaints were "being looked into as a matter of priority."
