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State Police Investigating Metals Firm

Posted on: Tuesday, 9 May 2006, 18:04 CDT

By Andrea L. Stape, The Providence Journal, R.I.

May 9--Pease & Curren Inc., a precious-metals refiner in Warwick, is the subject of an investigation by the financial crimes unit of the Rhode Island State Police, according to court documents filed by the company's lawyers.

The company and its top executives are also being sued in U.S. District Court in Boston by a former employee, Patricia Bergevine, for breach of contract, violating the federal racketeering act, negligence and emotional distress, according to court documents.

Bruce Gladstone, a lawyerwith Cameron & Mittleman, of Providence, who is representing Pease & Curren, yesterday denied the allegations and called the lawsuit "outrageous."

"Bergevine is defaming the company without any knowledge or basis in fact," Gladstone said. "Bergevine is a disgruntled former employee who is trying to take advantage of fabricated stories."

Bergevine, a former saleswoman for the company, filed the civil lawsuit in July. Her suit charges the company with defrauding clients, which in turn resulted in lost commissions for Bergevine. She reported the alleged fraud to the FBI in 2002. The FBI referred the case to the Rhode Island State Police, according to Bergevine's lawsuit.

The investigation by the state police is still pending, according to court documents filed by the company in response to Bergevine's lawsuit.

Bergevine, who lives in Plainville, Mass., is looking for at least $150,000 in lost commissions and more for the "negligent infliction of emotional distress," according to the lawsuit.

"We do have a very well-founded complaint," said Erin Brennan, an attorney with Johnson and Aceto, in Boston, which is representing Bergevine in the case.

Pease & Curren, a 90-year-old, third-generation family company, works mostly with large retailers and jewelry makers, melting down their unsold items and leftovers from manufacturing to extract the pure gold, silver, platinum or palladium.

The company also has some of the nation's largest jewelry retailers as clients, including TJX Cos. Inc., the Zale Corp. and Wal-Mart Stores Inc., according to Meredith Curren, the company's chief executive officer. These stores regularly send bracelets, rings and necklaces to the refiner to be melted down. Another customer segment is the dental industry, which sends gold scrap from dental work to be processed by Pease & Curren.

Gladstone said the company has a good reputation and that the state police investigation has "come up with nothing."

Law enforcement officials confirmed the police investigation.

Maj. Steven O'Donnell, a state police spokesman, said, "We do have an active investigation on Pease & Curren." Mike Healey, a spokesman for the Rhode Island attorney general's office said, "We do know about the investigation and some of the allegations."

Bergevine worked for Pease & Curren from 1996 to mid-2002, according to her lawsuit, and was focused on developing new dental customer accounts.

Bergevine's lawsuit claims that after Pease & Curren received shipments from customers, it was "systematically lowering the reported weights and percentage of metals recovered to defraud their clients." Bergevine's lawsuit alleges that she and a colleague found the discrepancy in the customer accounts after discovering computer files indicating that higher amounts of metals were actually recovered.

After discovering the inconsistencies, Bergevine went to the FBI. For a year after talking to the FBI, Bergevine's lawsuit says she experienced, "panic attacks, stomach illness and nightmares."

Pease & Curren denies all Bergevine's charges. Pease & Curren's response to the lawsuit says that there were no alternative computer files containing customer information and that if any report was filed with the FBI it was a "false report."

Gladstone said Bergevine and another former employee opened a business in Rhode Island and said Bergevine is using the lawsuit to boost the new business.

"We believe (the lawsuit) was filed because the criminal investigation was going nowhere," Gladstone said.

Pease & Curren recently filed a motion asking that the depositions of Pease & Curren's executives be postponed for six months, allowing time for the criminal investigation to close. Bergevine's lawyers are fighting that request.

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Copyright (c) 2006, The Providence Journal, R.I.

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Source: Providence Journal

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