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If It Sounds Too Good To Be True…

IMG Auteur
From the Archives : Originally published January 23rd, 2012
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FOLLOW : Ghana, Kenya, Swiss

 

 

 

 

Following on from Wednesday’s post on Gold Scams, Kid Dynamite drew my attention to the story of one-time NBA star Dikembe Mutombo’s involvement in a “proposed deal to extract more than a thousand pounds of gold from his native Democratic Republic of the Congo, amidst the core of the conflict mineral trade, and sell the haul for more than $10 million.”

Forbes reports that the “money generated was to be split between him, Nigerian-born Houston energy mogul Kase Lawal and Third World mineral trader Carlos St. Mary.

The deal ultimately went haywire, with the gold ending up in Congolese custody, $4 million in the hands of Eddy Michel Malonga, the supposed real owner of the stash, and another $6.6 million of Lawal’s money in cash in the pockets of General Bosco Ntaganda, a local warlord under indictment from the International Criminal Court, whose militia controls mining operations in parts of eastern Congo.”

For those interested in the soap opera-style story, see the article at the
Houston Chronicle’s website. They report that as the deal progressed, there was a request for “40 percent up front” – always a classic sign of a scam – upon which “Lawal reluctantly turned over almost $4 million in cash, [bad move] but only after getting a certificate of ownership [issued by whom and proving what?] and having the gold placed in a secure customs warehouse in Nairobi, the capital of Kenya. A week later, Malonga — and the gold — disappeared. The purported customs facility was a sham.”

All of these scams use the hook of “discounted gold” to tempt people by appealing to their greed. None seem to ask why would anyone sell gold below spot price. This was part of a scam last year as reported by
Emirates 24|7 where “several tons of gold imported into the UAE by traders and investors turned out to be fake on closer inspection…” and quoting the Managing Director of Emirates Gold as saying “The traders got greedy. They thought they were getting gold at a discounted rate.”

The article goes on to describe the typical scam:

African gold merchants claim to be in possession of large quantities of gold dust or gold bars, which they offer to sell at below market prices. The would-be buyer is made to send money for travel of the seller, for insurance, for shipping and for refinery assays before they would receive anything of any value. Investors are shown samples, which may be original gold. But when the consignment reaches the port, it will be only mud or sand. … The seller can walk away at any point with virtually no risk of being caught as all contacts are via anonymous free webmail accounts accessed from Internet cafes and via prepaid mobile phones.”

You may think who would fall for these scams, but The Perth Mint receives these sorts of requests with unfortunate regularity. The scammers never contact us directly (they know we know too much about the gold market to fall for the scam) but rather contact another person who then contacts us to buy or sell gold (at a discount, of course).

We have had these requests come from all types of people, often suburban accountants or lawyers, with greed in their eyes that they are going to receive 1% of a $100 million deal just for facilitating a deal. A few don’t respond well when we tell them it is a scam and suggest that they ask themselves why would a legitimate buyer with $100 million need to pay a suburban accountant $1 million to act as an intermediary when the buyer could just come to us directly.

To give you an idea of what these scams look like, below are three example emails we have received. The first demonstrates five classic signs of a gold scam – anonymous email (no corporate website we can check up on), overly formal language, ridiculously large amounts, representing someone else (never the actual buyer themselves) and mentions of letters of credit.
Calling us the Australian Mint doesn’t help.


-----------------------------------------------------

-----Original Message-----
From: xxx [mailto:xxx@hotmail.com]
Sent: Friday, 10 February 2006 1:02 AM
To: yyy

Subject: Purchase of gold,silver, platinum coins and bars

Good day Mr. yyy:

I obtained your contact information from the Royal Australian Mint website.

I represent an international firm that is interested in purchasing bullions, bars and coins. Specifically, we are interested in purchasing:

1. $ 1, 000, 000, 000.00 (1 billion) in gold;
2. $ 1, 000, 000, 000.00 (1 billion) in silver ; and
3. $ 1, 000, 000, 000.00 (1 billion) platinum.


To secure the purchase, we will issue Letters of Credit that are secured by US. Government Treasury securities and by gold.

What are the procedures for entering into a contract with the Australian Mint for the purchase of the above-referenced precious metals?

Thank you for your attention to this matter.

xxx
Agent


This next one has a few more classic signs – use of “au-metal”, “buyer’s mandate” and “swiss procedure” to make it sound more impressive and professional to the average person. Professionals never use those terms, so a dead giveaway there.

-----Original Message-----
From: xxx [mailto:xxx@yahoo.com]
Sent: Friday, 6 October 2000 14:34
To: info@goldcorp.com.au
Subject: PURCHASE OF AU-METAL

06.10.2000

FROM: xxx
Email: xxx@yahoo.com/xxx@hotmail.com

TO: M/S CORPORATION.

KIND ATTN: MR.yyy.

DEAR SIR,

WE WOULD LIKE TO INTRODUCE OURSELVES AS EXPORT-IMPORT MARKETING REPRESENTATIVE FOR AU-METAL.

WE HAVE VISITED YOUR WEB-SITE AND HAVE COME TO KNOW THAT YOU ARE ONE OF BIGGEST PRODUCERS OF AU-METAL IN THE WORLD.

WE ARE NEXT TO BUYER'S MANDATE HOLDERS/BUYERS THROUGH THE WORLD WHO ARE INTERESTED TO PURCHASE AU-METAL OF YOUR AVAILABLE QUANTITY. OUR BUYERS FOLLOW UP SWISS PROCEDURE. IF YOU HAVE YOUR PROCEDURE, PLEASE INFORM US SO THAT WE COULD DISCUSS WITH OUR BUYERS.

ALSO WE WOULD LIKE TO KNOW WHETHER YOU ARE ALSO A SELLER OR ONLY THE PRODUCEER ?

IF YOU ARE ONLY A PRODUCER AND NOT A SELLER, PLEASE INFORM THE SELLERS WHO ARE KNOWN TO YOU.

WE AWAIT YOUR REPLY PLEASE.

THANKS AND BEST REGARDS,

xxx,
CHIEF EXECUTIVE.


This last one was forward to us by the “mark” as proof it was a legitimate deal. I don’t know about you, but I wouldn’t be giving some guy with a yahoo.fr email address my residential address and passport, no matter how much his “prcie is cheaper”!

-----Original Message-----
From: xxx [mailto:xxx@yahoo.fr]
Sent: Monday, 9 June 2008 7:19 PM
To: yyy
Subject: From: Chief xxx.

From: Chief xxx.
Chairman & president of
Xxx Inc,
Abidjan-cote d' Ivoire.
West-Africa.

Attn: The Director,

Sir,

It is my pleasure to contact you for the purchase of my products A/U Gold Dust and uncut diamond which i have accumulated for sales, if you are ready and willing to buy revert back to me immdiately. Indeed,I am the right owner and the head of the above named Company. My Company represents and helps a group of village Gold mining washers to buy locally from the miners and sell their natural noble metals; mainly A/U Gold Dust and 360 carats of uncut Diamond.

I have at present for 300 kg of Gold dust whose characteristics are as follows: * Origin: Bokinafaso,Ghana and Abidjan-cote d'Ivoire in West Africa here, and/or i also have an offices on the above three countries now while the Quality is : 22 Karats + * Nature: Gold Dust * Rate of purity: 93.06%* pure. Bear in mind my prcie is cheaper.

If my proposal meets you in a favourable considerations to purchase, then revert back to me but be informed that if you really want to have my products either you or your representative must come to see it physically because i want to build trust with you as my foreign business partner that can never mess me up because there are so many bad people today claiming what they can not do.Your telephone / fax number including your residential or postal addresses is highly needed including a copy of your passport so that i shall in reurn send to you mine .

Thanks &
Regards,

Chief xxx

 

 

Companies Mentionned : Goldcorp |
Data and Statistics for these countries : Ghana | Kenya | All
Gold and Silver Prices for these countries : Ghana | Kenya | All
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