Plague Of Fake Gold In Melbourne, Australia

Fake-jewelry scammers are starting to get sophisticated. According to the man who got scammed in Melbourne, the fake gold looks like it's coming from China.

National Council of Jewellery Valuers (NCJV) Melbourne president Rikki McAndrew, who operates a gold trading business, discovered the ‘fake’ gold pieces when his customers unwittingly tried to sell them to him.

“Most of them were blocks of tungsten and silver coated quite thickly in gold. Just last Friday someone came in with a chain that was stamped 14ct gold but turned out to be copper nickel,” McAndrew said.

“I believe someone is making gold bracelets and watch chains that are in actual fact gold on copper. I’ve came across a lot of them that are stamped 9ct gold but just feel wrong,” he added....

“I would guess China because of the style – the clasp is a very Chinese clasp,” he said.

McAndrew said it would be near impossible for retailers and consumers to ascertain if pieces they bought were fake or real. One of the pieces he had discovered was slightly rough but had the right weight.

“That piece was particularly convincing and probably the best [fake] I have ever seen,” he said.

McAndrew believes that fake jewelry is being sold on eBay. Word to the wise.


Fake gold bars in Vietnam- partially filled with tungsten - seem to have come from Hong Kong. Although it isn't confined to the Chinese area, two cases make for a pattern. Caveat emptor.

Fake Gold Creating Concern In Vietnam Gold Market

Recently, some goldsmith shops in Vietnam got a solicitation to buy bars coming from Hong Kong. Instead of being pure gold, they were about 60-75% gold with the remainder being a fine powder that examiners suspect is wolframite (tungsten.)

The information has immediate caused big worries among Vietnamese people, who have the habit of keeping gold as their assets in the context of high inflation, but they do not know for sure if the gold in their coffers are real gold or imitation gold. The problem is that the imitation gold cannot be discovered with modern machines....

The information about imitation gold has immediately made the domestic bullion gold market “fall into a crisis” as said by Nguyen Minh Chau, General Director of Bao Tin Minh Chau Gold, Silver and Gemstone Company.

“The bullion gold trade turnover of goldsmith companies has decreased by 50 percent. Especially, many companies have seen the turnover drop by 60-70 percent and they are at the risk of having shut down business,” Chau said.

He went on to say that the gold business has fallen into crisis because of the people’s psychology.

Oddly, the news story that reports on this disturbing development tries to put a happy face on the discovery and subsequent buying strike by saying it will help bring down inflation! The author, or a government censor, holds the unusual idea that a rise in gold causes inflation rather than revealing inflation. It's as if they believed that a rise in the mercury in a thermometer caused the weather to get hotter.

Regarding the tungsten: the crooks behind that scam are dangerously sophisticated. A normal con artist would plate gold over tungsten in order to maximize the theft, short-term. That kind of fraud can be detected with a touchstone.

Unfortunately, hollowing out only the centre and stuffing tungsten inside is much harder to detect. With that kind of sophisticated scam, the only recourses might be either sawing the bar open and/or melting it. Tungsten's melting point is much higher than gold's.

As a result of such scams, assaying costs to confirm good delivery on bars might well shoot up. Fortunately, there are other techniques available - looking for: soldered bars, bars that are mocked up to look like standard bars but aren't, bars with irregularities that indicate being sawed open and remelted. Sad to say, if the tungsten scam spreads it'll be harder to sell non-standard bars.


The remedy might be buying legal-tender bullion coins instead of high-weight bars. They're hard to counterfeit, and government mints may co-operate by making them even harder to fake. Bar smelters could help out too, by lining their bars with hard-to-duplicate riffings along the edges - something like the ribbing on coins. If such comes to pass, sad to say, the newer bars will go for a premium relative to older and less secure bars.

Gold Investment Scams Proliferating

As gold investing becomes more popular, fraud artists are moving in with new scams. One example was American Precious Metals, which didn't buy the gold and silver after taking clients' money. The principals of that company have been in trouble with the law before.

Last year, Brian Gurl spent some time reading about the state of the U.S. economy.

He kept hearing about the gargantuan size of the federal debt and the threat of inflation on TV. Gurl is approaching retirement age, so he and his wife needed safe investments. The couple decided on gold.

"We approached several companies. But it was American Precious Metals who were the most aggressive," said Gurl, who invested about $100,000 with the company last Fall. "They just sounded very expert."

In the span of a few months, the couple lost about $60,000, Gurl said.

What makes this a bit of a tricky area is the fact that some investigations are politically motivated. Real fraud artists know it, and are quick to compare themselves to a company or individual that's been leaned on for political purposes.

The best guide is asking yourself, "is this too good to be true?" Scam artists have a pattern of claiming that the mark won't - or can't - lose any money. The fact is, losing money in gold is quite possible. A legitimate investment firm will acknowledge this fact without being prompted to do so.

High Price Of Gold Linked To Increase In Home Invasions

As reported by CTV News, gold reaching a recent record is one of the motovators for home invasions increasing in the city of Toronto.

Det. Eric Goldsmith, an officer in Scarborough's 42 Division, says 2011 has been the worst year for break-ins that he has ever seen.

As of May 12 there were 233 break-and-enters throughout 42 Division, up from 124 at the same time last year -- a 92 per cent increase.

"Largely we attribute that to the record price of gold," Goldsmith said on Wednesday.

"Very often they'll go along a street that backs onto a park or a ravine and they'll just go over fences into the backyard and into a house and the next and the next and the next," Goldsmith said.

Forewarned is forearmed. This disturbing trend may be confined to Toronto, but it's more likely that Toronto's ahead of the curve. Or, increases in burglaries have taken place in other cities without much media notice yet. If you own some gold, 'tis best to take precautions. This Website has a few tips.

Nigerian 409 Scams Have Moved Into Gold

This warning may not be that needed, given the many others that have been made about such E-mail scams, but a woman had been victimized to the tune of $15,000 by one.

A 57-year-old Lambton County woman [in Ontario, Canada, near Sarnia] has lost about $15,000 in an Internet gold trading scam.

She received an e-mail from an alleged gold trader in Africa. The trader promised to send her gold and convinced the victim to send money to Africa through Western Union. Various excuses were used by the suspect to convince the Lambton Shores woman to continue to send money. The victim finally called police after sending money and not getting any gold.

Sadly, one of the unintended consequences of gold's bull market is a rise in gold-related crime and scams. More than ever, it's "holder beware."

Major Mafia Figure Had Gold Bars Stashed In Basement

Joseph Massino, a major organized-crime figure who's turned state's evidence, had an unusual savings plan. At his height, he had $7 million in cash stashed in the attic of his home and hundreds of gold bars in his basement.

Naturally, the cash was in his attic and the gold bars were in the basement—that's where everyone keeps theirs, right? Massino revealed that he agreed to become the first crime boss to testify for the government so his wife would be financially secure: According to the Daily News, Massino turned over the cash and gold, but his wife Josephine "and his mother got to keep the homes they lived in, as well as five homes in Howard Beach and one in Brighton Beach that produced rental income."

I don't think he had much fear of the gold being stolen from his basement. [True fact: a neighbourhood where Mafia bosses reside can be spotted by its suspiciously low crime rate.]

Drug Cartels Stealing Gold From Mexican Mines

It's part of life in a failed state. Attracted to the concentrated wealth that gold mines produce, Mexican drug cartels are getting behind thefts of gold from Mexican mines.

[A]s international metals prices surge, gunmen are attacking workers to steal valuable ores and equipment at often-remote mining sites that have fallen under the gaze of drug gangs extending their reach into new criminal rackets.

Companies are being forced to hire more guards or change the way they transport goods, with some shipping valuable metals by air instead of on dangerous highways.

"We spent 20 per cent more on security last year," said Armando Ortega, vice-president for Latin America at Vancouver-based New Gold Inc, which owns the Cerro San Pedro gold mine in San Luis Potosi state. "There are miners that have suffered robberies of gold-silver dore bars or concentrates. The high prices make gold an attractive target for organized crime....

A few mining companies have already suffered major thefts of dore bars. Although the cartels may not be directly involved, they've helped create a climate of lawlessness in which such thefts thrive.


As I indicated, this isn't the first time a mine's been jacked. Some time ago, I wrote a short story whose plot revolved around a fictional theft in Canada. It seems only a matter of time before those crimes spread northward...

Burglars Know More About Gold Bull Than Some Homeowners

Over at the Telegraph, Ian Cowie has penned a warning for gold owners: if you have gold jewelry, you should update the value of your theft insurance. Unless you've done so, you're likely under-insured. Needless to say, burglars know about how much gold has risen.

LV, formerly known as Liverpool Victoria, which insures more than 1m homes, says 90pc of theft claims now include stolen jewellery. A spokesman said: “We want householders to consider whether they have adequate cover before it is too late. This could mean something as simple as updating the valuable items part of your household policy.

“The sharp increase in the gold price has had an effect on criminal activity and some members of the community who tend to keep more gold at home than others may be more at risk. The increase in companies offering to buy gold jewellery by post could also have made it easier for criminals to sell this type of stolen property.

“Jewellery is certainly much more valuable now. For example, an 18 carat gold claim that would have cost £3,000 in 2001 would cost £14,000 now.”

Granted that this article may come across as an insurance plug, but it does point out that gold is a favourite target for burglars. As an alternative to insurance, or to more insurance, security precautions can be implemented or increased.

Sadly, some thefts are "inside jobs." Gold's bull market has made an easy steal more tempting, even for relatives in some cases.

As Gold And Silver Climb, Scams Running Rampant

Gold's and silver's long-term bull markets, complete with the recent press both have gotten, have resulted in easier sells for gold-related investments. Sadly but inevitably, scam artists have gotten in to the act too. Erin E. Arvedlund, in an article discussing a recently-exploded Ponzi scheme, provides some tips to avoid getting scammed:

Here are some telltale signs of commodities fraud:

Predictions or guarantees of large profits.

Promises of little or no financial risk. Be suspicious if the firm or individual says there is little risk or tells you that a written risk-disclosure statement is only a routine formality.

Unsolicited telephone calls about investing. Be skeptical if someone you don't know calls you about investment opportunities.

Someone asking you to send cash immediately.

Although she doesn't mention it, a Google search on a the name of all the principals of an exciting scheme will reveal eye-opening information if one of them is an experienced scam-monger.


Scams are even infecting the numismatic coin market. A Minnesota company calling itself Reputable Rare Coins (of all things) has been cold-calling gold coin holders for a trading scheme in which a representative offers to trade old gold coins for ones of different denominations - e.g., two $10 coins for one $20 coin. Once the victims sent in their coins, they never got anything back.

[A search-warrant affidavit filed by the police] said Roseville police have received 14 complaints from coin collectors around the United States about Reputable Rare Coins, alleging losses of gold coins totaling more than $500,000.

The affidavit also said a former employee of Reputable Rare Coins told police Hughes would arrange for his victims to ship their coins to the company through the U.S. mail or Federal Express with no intention of shipping back the agreed-upon coins.

The employee told police that Hughes uses the proceeds from sales of coins sent to Reputable Rare Coins to buy narcotics and to gamble at Minnesota casinos, the affidavit said....

Again, dealing with a stranger over the phone led to grief.

Gold Thefts Prompt Meridian, Idaho Police To Pursue Licensing Gold Sellers

It's a shame that such a measure is seen to be needed, as more financial privacy would go out the window, but the police chief of Meridian, Idaho says that the increase in thefts of gold call for licensing of pawnshops, jewlers and bullion shops. They would be required to gather detailed information on any gold seller.

“With gold prices and silver prices and things going up, we’re starting to see a lot more theft in that area, and people visiting these dealers,” said Meridian Police Deputy Chief Tracy Basterrechea.

Meridian Police say economic hard times have driven up thefts, especially when it comes to precious metal, which is selling at a good price, and they say, easy to conceal as stolen.

“Now, you start to see a trend of things that can be melted down and altered so that once they’re melted down obviously you can’t track them down or trace them,” Basterrechea said.

The new proposed city ordinance would require anyone who deals with gold, silver, or platinum items to be licensed. Also, those who sell personal property would have to give information like their name, address, photo ID, physical description, and thumb print.

Additionally, dealers would have to hold items for ten days before reselling or melting down the metal, and they'd be required to take detailed records of what they buy....

Interestingly, the risks of being stolen from themselves hasn't led to any enthusiasm for the proposal by the regulatees. They not only cite invasion of customer privacy, but also the turnover slowdown the hold period will require.


If such a measure passes, the spread will inevitably widen. Either that, or the shops will relocate out of town.

Gold Panners Murdered In Zimbabwe

Gold panning is strenuous, and the accident-prone can get themselves injured by (say) falling off a steep slope or getting caught by a boulder while trying to move it. But, normally, homicide isn't one of the risks. Sadly, murder is what two Zimbabwean panners got in return for trusting two strangers they hired to help them.

TWO men from Bulawayo were killed while panning for gold near Kwekwe River early this week by people they had hired to help them.

Pevey Geoffrey (65) and Michael [Sutherland] (35) of Morningside in Bulawayo had gone to the Midlands mining town in search of the mineral.

Police chief spokesperson Assistant Commissioner Wayne Bvudzijena confirmed the incident.

He said the incident occurred on Sunday after the pair travelled from Bulawayo and met Farai Lawrence Ndlovu and Wellington Gadzi-ra in Gweru.

The two, it is reported, believed there was some gold near Kwekwe River and took Ndlovu and Gadzira with them in their Nissan Patrol.

Thankfully, police found one of the culprits and arrested him.

If You Flaunt Your Bling...Watch It

That's the message Sacramento police have for people sporting gold jewellry after a spate of grab-and-run robberies. Gold is not only more expensive, but also more noticed because more people know it's going up. That wider reach includes criminals, who are finding it easier to sell or hock the gold they've stolen.

Robbers so far have struck twice this month along the Stockton Boulevard corridor. “It's surprising, because we haven't really seen any sort of violent activity going on around here,” said Mike Chan...

In one incident, the suspect confronted a woman pushing a shopping cart, and grabbed her necklace right off of her throat....

Brenda Twist, who shops along the boulevard, says a woman was recently attacked right in front of her little daughter. “She was robbed and stabbed. She made it, though,” said Twist.

The most recent attacks happened in broad daylight....

Word up.

Alaskan Charged With Stealing Gold from Brother

Alaska has its idiosyncracies, which even show up in crimes committed in the region. According to a report in the Northwestern.com, a 61-year-old Alaskan man has been charged with criminal damage to property and concealing stolen property after he allegedly lifted his brother's gold.

Michael Villwock reported to police that his brother, Robert, had thrown a chainsaw through a window of his garage on the evening of Jan. 24. Fearing for his safety, Michael Villwock fled from his County Trunk Y residence.

When Michael Villwock returned home on Jan. 31, he found a torn-up copy of Robert's will inside his mailbox.

The defendant's brother told police that a safe containing more than $67,700 in gold Kruggerand coins was missing, according to the criminal complaint....

Adding to the twists in the story, Robert Villwock tried to barter six of the Krugerrands for a used skid loader; the owner refused, so he sold six coins instead and bought the loader with cash.


Based upon that story, Robert Villwock is one mean man. His brother said other crimes were committed against him by Robert, but he shut up about them for fear of retaliation.

Sibling rivalry...

Burying The Evidence

That's putting the matter politely. In India, an arrested thief tried to keep a five-gram gold biscuit by swallowing it.

...when officers searched Shaikh's [the thief's] house, they found no trace of the gold. Shaikh, who was in police custody, steadfastly refused to use the bathroom. "Shaikh was uncooperative, but we became suspicious after he refused to go to the toilet for four days at a stretch," said inspector A K Pathare of Bhoiwada station.

When the police took the accused to the hospital for a checkup, a sonography revealed that he had swallowed the stolen gold. "The gold biscuit was in Shaikh's stomach. Doctors have told us not to worry as we will get the gold, eventually. All we can do is wait," said investigating officer Shashikant Gatt.

Given how police behave in India, I'm guessing that the one who''ll have the honour of extracting the gold from the "night soil" is the thief himself. Not the usual pay dirt, that's for sure.

California State Museum In Columbia Robbed Of Gold

As gold rises, it becomes more of a tempting target for thieves. Gold that has been safely in the Columbia State museum for decades was robbed after thieves broke in when the museum was closed.

"Someone cut a master lock and entered the museum located at Main Street and State Street inside the park, said Ranger Barry Robertson. "When they entered the museum they ended up stealing several items with gold or individual pieces of gold from the museum. Unfortunately at this time we don't have any suspects."

Robertson says the estimated value of the stolen gold is undetermined at this time.

Whoever those thieves were, they weren't very knowledgable about gold. Also stolen was some fool's gold - iron pyrite.

Australian Gang Of Two Charged With Stealing Gold

What make this story unusual is that the two were miners, employees of the mine they stole from. As reported by the news department of the Australian Broadcasting Company,

Two Kalgoorlie-Boulder mining company employees will face court next month for allegedly stealing gold worth up to $1 million.

Police allege the men, aged 29 and 32, stole the gold from the Jundee mine, 50 kms east of Wiluna on Monday and hid it in nearby bushland.

The crime they were charged with was "stealing as a servant."


Truth ain't fiction and fiction ain't truth, but I wrote a short story for this blog whose plot revolved around a more elaborate gold theft - one that smacked more of Mexico than Australia. You'll find it here.

A Different Kind Of Protection From Gold

People who acquire gold for protection normally do so to protect wealth, but there's a case of a man whose gold may have protected his life. He was shot at by his younger brother and the bullet was deflected by his gold tooth.

Walter [Davis, 22] was struck in the upper lip and doctors at Interim Louisiana State University Public Hospital said all they found was a bullet fragment near his left nostril. Paramedics said the victim told them the bullet ricocheted off his gold tooth.

He didn't want to press charges against his brother, but the police nabbed the guy anyway.


And they say gold has no use...

WOW Gold Farmer Gets Robbed Of Bullion

It's unfortunate that her name and game got noticed in the media due to her being robbed, but Kristina Fincham has an unusual career. She's a World of Warcraft gold farmer, who plays the game to accumulate gold and sell it for real money to hungry players. There are lots of gold farmers about, but she's one who took the proceeds and invested them in real gold. Sadly, her hoard has been stolen.

An Australian woman is suing her insurer over the theft of 74 bars of real gold bullion worth $74,549, which she bought using profits made from gold farming in World of Warcraft.

Adelaide Now reports that Kristina Fincham was a (clearly successful) gold farmer in WoW who sold in-game gold to players in return for substantial profits. For reasons unknown, she then decided to convert the profits from the WoW gold into real-world gold bullion.

Reason unknown? Gold to gold has a neatness to it, and the reason can be easily discerned by looking at a ten-year gold chart.

PayPal Thief Caught While Buying Gold

Most scams involving gold involve selling fake gold, but this scam features a thief who cracked open hundeds of PayPal accounts and bought gold with the stolen money:

Richard Kirk, 22, and from the Sherwood area of Nottingham, raided the PayPal accounts of 303 eBay users, transferring the money to accounts under his control. He used the stolen funds to buy a variety of goods, including laptops and bars of gold bullion.

Kirk was caught after one of his victims contacted police, who tracked Kirk down to his Mum's house. The outlaw was arrested after he took delivery of two bars of gold bullion, This is Nottingham reports.

He got three-and-a-half years for his troubling.

Another Fake Gold Scam, This Time In India

As is often the case a supposed bargain on gold proved to be a con. Luckily for the victim, he didn't hand all the cash over at once; instead, he slipped the gang of five a down payment and later went to the police once his supicions were aroused.

A deal was struck between them at the rate of [10,000 rupees, or Rs.] per ten grams, half the prevailing market rate. Narsaiah gave them Rs.1,000 as advance and sought some time for arranging the rest of the money.

'However, Narsaiah grew suspicious and informed the police, after which the five were held with two fake gold bricks and a Santro car on Monday,' said the police officer.

During interrogation, they told the police that one of their associates, Tahid, procured fake gold bricks from a jeweller in Julehada in Rajasthan at the rate of Rs.5,000 per brick.

'Efforts are on to apprehend Tahid and the jeweller,' added the police officer.

When a jeweler starts quoting rates for producing fake gold bars, the con is certainly spreading. I haven't seen any reports from North America yet, but I woudn't be surprised if there were. To reinforce the message: it's prudent to consider spot to be the best bargain obtainable. Well below spot means "avoid." Genuine exceptions are much rarer than scams.