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Bogus gold bars found in bullion exchange vault

FORT LAUDERDALE, Fla. -- A court-appointed caretaker who opened the vault of the controversial International Gold Bullion Exchange found 45 blocks of wood covered with gold paint -- but no gold.

'Like Old Mother Hubbard's cupboard, it was bare,' said William F. Leonard, a Fort Lauderdale lawyer who was appointed curator last week.

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'There was nothing of value in there except a small adding machine.'

Looking for valuable assets, Leonard opened the Bullion Exchange vault Monday and found 45 wooden blocks painted to look like gold bars, several empty coin bags, a boxful of computer printouts, records and promotional literature. But there was no gold, no silver, no metals of any kind.

Leonard said the painted wooden blocks 'were like paperweights. My thought is they were ... giveaways.'

IGBE, believed the nation's largest dealer of precious metals, was ordered closed last Thursday in the wake of 300 complaints and lawsuits filed against the firm since Jan. 1.

A circuit judge gave the gold dealer until Monday to file for bankruptcy, but a lawyer representing the firm obtained a second extension. The new deadline is today.

'They didn't realize they had an abortion of a bookkeeping (system),' said Broward County Circuit Judge Joseph Price.

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IGBE had no computer, Price said, nor were there any accounting ledgers 'in the generally accepted sense.'

IGBE attorney Tom Tew said the firm would file for reorganization under Chapter 11 of federal bankruptcy laws. Under Chapter 11, the company promises to submit for court approval a plan for repaying creditors.

The filing will cover the three IGBE offices in Fort Lauderdale, Los Angeles and Dallas, he said. It will not cover 38 IGBE affiliates.

In Dallas, a state court judge Monday placed the company in temporary receivership at the request of the Texas attorney general and the state Securities Board.

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