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The Old Gold Out of Africa Scam
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(February 15, 2006) Have you ever been contacted, perhaps through an email or fax, about a veritable fortune in gold in the possession of someone in Africa, someone who desperately needs your help to bring it to America? This week, we bring you a story of gold fraud.
I first heard from a gentleman from one of our broad-shouldered Midwestern cities when he phoned me a few months ago. His firm, I was informed, was in the import-export business, and decided to contact me because they were developing an account in Africa. This new account was one that was looking to export gold to the US, and since we were (from the looks of our website) in the gold business, perhaps a mutually beneficial relationship could develop.

Yes, kilograms of gold were to be arriving in the US shortly, and did we have the capacity to refine and pay for such?

My normal skepticism came into play, but the fellow from the Midwest was very smooth, and very confident that in fact the gold would be flowing our way shortly. And not just as a one-time thing, but in increasing streams from the heart of Africa.

We often received such inquiries about gold from Africa. Usually, they are in the form of emails, involving a sob story of gold which needs to flee a politically dangerous place, gold which, if only a bit of cooperation could be obtained stateside, could make its recipients wealthy. The supposed sellers of this gold could provide substantial quantities, with ample commissions and fees allowed for, enough to butter everyone’s buns, so to speak. If only a sympathetic ear in the US could be had, these propositions alleged, so many favors would come.

This is the usual story of gold abroad. The quantities mentioned are seldom chintzy. We once received an (unsolicited) email offering to let us be the middleman in a deal purported to be in excess of ten thousand metric tones, with appropriate discounts available versus the current London fixed price. Never mind that such a quantity is approximately four times all the gold mined in the world in a year.

Often it is the outrageous quantity aspect that makes the scam appealing. People who hear such numbers naturally think, ‘If I could only net a fraction of a percent of this deal, I could retire wealthy!’ The scamster is relying on a few people to be curious enough to ask for more details. And then, of course, the spider will weave its web, entrapping another hapless victim.

But this inquiry was from the US, and one day a couple of ounces of what appeared to be genuine placer gold appeared in the mail. We immediately got a phone call from the fellow, who asked that we assay the lot, and let him know the results as soon as possible.

Somewhat warily, we did so, and in about a week let him know that the lot assayed some 87% gold, very typical of naturally occurring gold in placer form. We send him his few hundred dollars for this little lot, and he assured us that there was much more to come after this ‘test sample.’

Sure enough, a couple of weeks later, another tiny envelope of gold flakes and little rocks appeared from the same source, we did another assay, which yielded much the same results, and we forwarded this modest-sized payout to our new telephone acquaintance.

But this time we told him that we could not run any more of these little samples. The refining business is predicated upon quantity, and submitting assay lots worth only a few hundred dollars does not help keep a refiner in business. Prodigious quantities of gold were on their way, he had told me. But it was time to either fish or cut bait, as they say.

After that, I didn’t hear from him again for a few months. And then, out of the blue this last week, he called again. This time he said that a few kilos of gold were definitely on their way to him, and would be forwarded to us immediately.

And sure enough, this Monday we received a package, and inside was a locked pouch of the kind a business might use for bank deposits, a note, and a couple of business cards from the fellow’s import-export business.

The locked pouch inside the package was a novel touch. Next to it was an envelope, labeled “key and invoice,” and inside, sure enough, was a key and an invoice for some “6.8 Kilograms of gold dust.”

The key fit the lock on the pouch, I opened it, and inside was a plastic bag filled with a yellow gold color metallic mixture of granules, from powder-fine to pieces as large as grape-seed.

The look was good, the color was right, and, at our testing table, with two members of our crew as witnesses, I pulled out a couple of the larger, grape-seed sized pieces, and rubbed them on the slate. They left a nice gold stripe. Had you asked me at that moment, I would have said that this was in fact a bag of placer gold.

However, nothing is gold unless it passes the acid test. Expecting a typical high-karat gold, I applied a drop of 18 karat dilution nitric acid on the stripe. Instantly the stripe disappeared, failing the test. Likewise, when 14 karat acid was applied. Even 10 karat acid faded the stripe in a couple of seconds. The truth was, this bag of material, with the color and texture of placer gold, was a very artfully contrived scam, containing not a gram of genuine gold.

Immediately, I phoned the fellow, and told him the news. For a few seconds, I didn’t hear a word on the other end of the line. Finally, he spoke, and said that this was the bag that the previous two samples had come from. I said that that can’t be so, as those were gold, and this clearly was not. Again, nothing but silence on his end. I told him that I would send the whole package back to him via registered insured mail.

Less than an hour later, he called again. Could I go ahead and run the assay, and give him the report, so that he could take legal action against the African party that had defrauded him? I told him that the package was already wrapped for return to him, and that obtaining an assay asserting a nullity would be of no use.

In truth, I knew that all the legalities in the world weren’t going bring back any of the money he had paid to whomever it was in Africa who had pulled this scam on him.

So, is there a moral to this story? Perhaps it is that the world is flat, as Tom Friedman says, and exotic foreign scams can be brought to you via the Internet with an immediacy that can be frightening. In Nigeria, for instance, there are rooms full of scam artists pumping out emails and faxes, looking for that one in a million person, preferably an American with money and a soft heart or an avaricious nature, to take the bait. In essence, a form of fraud has been outsourced to Nigeria, where the average personal income is less than $400. There, one successful fraud can feed, clothe, and house a family for a year!

That is the reality of this particular flavor of international fraud. And for all the scam emails and faxes that we receive from perpetrators, we also hear from potential victims. There are times that we are contacted by someone in the US, someone who sincerely believes that their new friend in Africa is going to send them some gold.

We now have a form letter for those occasions. This is our response when the person contacting us seems sincerely to believe that their golden dream is about to come true:

“Thank you for your inquiry with Onlygold.com.”

“Nearly every day, we receive messages concerning gold supposedly from other countries. There are untold numbers of financial scams spread by email, telephone, mail, and fax, and often the 'bait' of these scams is some quantity of gold or diamonds, or a bank account, often from Africa, that a person claims that he or she needs help in transferring to the US.”

“Like every other firm in the gold bullion business, we have for years received variations of the same propositions via phone, fax, email, etc., and ignore them all."

"However, your communication was more personal than most, which leads us to believe that perhaps you are about to become the victim of such a scam.”

“We are warning you that these sorts of communications from abroad are very common. These are professional scam artists at work, and they are very good at what they do.”

“We are sorry that we cannot respond personally to you. But you should know that many people have learned a hard and expensive lesson about supposed gold in distant lands – we urge you not to become a victim yourself.”

“-The staff at Onlygold.com”

 

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