On Tuesday, June 7, 2011, Revenu Québec raided their offices, saying they engaged in tax evasion, false invoicing, and false tax returns.
When the tax authorities say there is reasonable grounds to believe that 125 companies are involved in major tax fraud, and you are one of just 2 companies mentioned, that's bad. Maybe they are not guilty of tax fraud. But they are definitely guilty of lying! Let's take a look at the timeline on Tuesday (all local time).
8:30AM - This is the time that Kitco offices open. Presumably, Kitco employees arrived at work to find it swarming by tax authorities (175 agents were involved), who arrived before the opening of the business to ensure that evidence couldn't be tampered with.
By 8:49AM - The Kitco website states "Due to a major power outage, Kitco`s offices are currently close [sic]. We are currently working on the issue and anticipate resolution shortly. We apologize for the inconvenience." They could have gone with "openness", "transparency", and "honesty" and told the truth. Or gone with a simple truthful approach of "due to unforeseen circumstances". No, it appears that they thought about the most believable lie they could tell, made up specifically to prevent their customers from finding out out that their offices were raided for major tax fraud. Referring to it as a major power outage leaves no iota of truth (not even a 'we flicked the light switch causing the power to go out' that a lawyer might accept as true). At least there was a clue that something was wrong, as power outages don't get "resolved", they get fixed.
11:29AM - As Kitco customers start doubting the made-up power failure story, the Kitco website changes the story from a power outage to technical difficulties, proving that they lied. It now states "Due to technical difficulties the Kitco office will be closed today.We apologize for any inconvenience this may cause. The Kitco team." They are now trying to cover up their lie!
12:06PM - SuperMod, the official Kitco forums spokesperson, stated "We're working around the clock to resolve any technical issues, we will update with more info as it becomes available." According to one definition of "technical difficulties" (broadcasting equipment failure), this is a lie. However, in Kitco's defense, it can be true by loosely using the other definition -- "An excuse to cut a program off the air because somebody said something wrong." It sounds like their lawyers picked those words!
3:55PM - SuperMod, the official Kitco forums spokesperson, stated "The Kitco offices are now resuming business as usual, all technical difficulties have been solved." Note that they are now referring to multiple techical difficulties, again proving the power failure story was a lie.
From what we can tell, Kitco management arrived to work, saw that a raid was in progress with search warrants in hand, realized they could not conduct business, and decided that since the Kitco promise means that their standards must be the "highest in the business", they would lie to their customers and tell them that there was a major power outage.
I see no reason to believe that Kitco has a policy of lying to their customers, or that they frequently lie to their customers. However, if I were to consider ordering from Kitco, I would wonder every time they said "Yes, that item is in stock" or "Don't worry, we will ship it today" or "Kitco does not regularly report our sales transactions to the IRS, or any other government agency." or even "We did not commit fraud."
In 2008, Bart Kitner, Kitco's President and founder, wrote Jason Hommel and gave him the opportunity to retract something he wrote or get sued (apparently, Bart backed down). You may want to save a copy of this page, in case Kitco threatens to take it down.
Also, be sure to see our page about how Kitco chooses to let misinformation spread in their forums, while censoring the truth.