Rhyne Metals Closes, Contacts U.S. Attorney

A longtime Seattle precious-metals business has suddenly closed, leaving employees out of work, and customers worrying about the fate of their investments.

Rhyne Precious Metals, a local retailer of gold, silver and platinum coins, bars and jewelry for more than two decades, abruptly shut down late Wednesday after majority owner Craig Rhyne, through his attorney, informed the U.S. Attorney's Office of "financial irregularities related to the management of the business."

Harry McCarthy, chief of the criminal division of the U.S. Attorney's Office, today referred all questions to the local office of the Federal Bureau of Investigation. An FBI spokesman declined to comment.

Rhyne's attorney, John Wolfe, who released a statement yesterday announcing the shutdown and the disclosures to the U.S. Attorney's Office, declined to specify the nature of the irregularities.

"There are things going on right now that I'm not at liberty to talk about," Wolfe said. "Things are changing very quickly."

Wolf's statement said Rhyne has pledged to cooperate with any investigation.

Concerned investors had just one question: Would they ever see their metals or money again?

Patrick Brennen said he has invested about $7,000 with Rhyne Precious Metals over the past four years, purchasing silver and platinum pieces that were stored by the business.

"My only question right now is, if they are closed, do people who have material in storage there get access to it, or is it gone?" said Brennen, who owns Greater Seattle Printing & Mailing in Redmond.

"We're not talking about nickel-and-dime items here," he added.

Brennen's company has provided printing services for Rhyne Precious Metals. He said he learned about the closure from a broker who had arranged a recent job to print postcards advertising gold coins.

Marvin Senff, president of Mercer Island-based Hallmark Precious Metals Inc., said he advises investors against storing their precious metals with dealers because problems have developed in the past when gold prices have fluctuated.

"Lo and behold, when people went to pick up their precious metals, they went back and the business was closed or bankrupt or someone had made off with it," he said.

Senff said a dealer's speculation in the market when it comes to gold prices can cause financial problems for a business but stressed that he did not know what happened at Rhyne Precious Metals. He said he has known Rhyne for 20 years and has never known him to have business problems.

Wolfe said Rhyne's investors would be notified of the closure, but he did not know how many would be affected.

Wolfe said Rhyne's business was not under investigation at the time he contacted the U.S. Attorney's Office.

A penned sign was taped to the glass door of Rhyne Precious Metals at 425 Pike St. It read, "No admittance. Sorry for the inconvenience, but Rhyne Precious Metals has suspended its operations."

It advised customers to call 623-6900 and leave a message. Yesterday afternoon, a recorded message said, "That number is not responding."

A man wearing a Seattle police uniform at the downtown store said only that the business was closed, and that employees inside were picking up personal belongings.

Wolfe said the business employed about a dozen people.

The statement Wolfe released said, "Mr. Rhyne regrets the impact and hardship, which his actions will have upon his customers, his staff and his family."

Rhyne went into the gold and silver business in 1974, opening C. Rhyne & Associates in Tacoma.

Back then, gold cost only $38 an ounce. Today, it sells for about $384 an ounce, after rising to more than $800 an ounce in 1980.

Rhyne Precious Metals moved to a Pioneer Square office in 1976, relocating in 1988 to its current space on the fourth floor of the Washington Federal Building.