GOLD SCAMMERS- Three people have been charged with conspiracy to commit a felony. The three are accused of stealing over Ksh.300 million from Asianic Limited by falsely pretending that they were in a position to sell gold to the company.
According to the charge sheet, Frank David Kateti, Alain Mwandia Nvita Lukusa and Daniel Otieno Ogot are alleged to have committed the offence on diverse dates between February 5 and June 13, 2024 at Nairobi County. They are charged with others who were not before court.
The matter was coming up for consolidation today where they were charged. An application to have Kateti’s passport released was however dismissed.
They were all granted a cash bail of Ksh.500,000 each. The case will be mentioned on October 7, this year to conform compliance to court directions.
How to Identify and Avoid Gold Investment Scams
Gold has always been seen as a safe haven investment, especially in times of economic uncertainty. While this may be true, not all gold investments are safe.
Scammers are constantly on the lookout for unsuspecting investors to exploit. To protect your investments, it is essential to understand how these scams work and learn to identify the telltale signs of fraud.
With knowledge and a healthy dose of skepticism, you can navigate the gold market safely. This guide will provide you with the essential tools to ensure your gold investments remain secure and profitable.
What Are Gold Investment Scams?
Gold investment scams encompass a range of fraudulent schemes designed to deceive investors. These scams can take different forms, from outright fraud to misleading sales tactics.
Some are easy to spot, while others are sophisticated. Knowing what to look for is the first step in avoiding these scams.
Common Types of Investment Scams
Let’s take a closer look at the most prevalent gold scams:
1. Fake Gold Coins and Bars
Scammers sell counterfeit gold coins and bars that look real but are worthless. This fake physical gold is often made with an impressive amount of detail, making them hard to distinguish from genuine gold. To avoid this, consider having your purchases authenticated by an expert and only buy from reputable dealers.
2. Overpriced Gold Investments
Some scammers sell gold or other precious metals at prices much higher than market value. They might use high-pressure sales tactics to convince you that these inflated prices are justified. Victims of this scam end up paying far more than the gold is worth, losing significant amounts of money.
3. Non-Existent Gold
In some gold scams, the gold doesn’t exist at all. The scammer promises to store your gold in a secure vault, providing false documents to back up their claims. Investors believe their gold is safely stored, but in reality, their money has been stolen.
4. Ponzi Schemes
Ponzi schemes use new investors’ money to pay returns to earlier investors. The scheme relies on a constant influx of new investors to keep it going. Eventually, these schemes collapse when there aren’t enough new investors, leaving most participants with nothing and the organizers disappearing with the funds.
Warning Signs of Gold Investment Scams
Recognizing the signs of a potential scam is crucial in protecting your investment:
- Unrealistic Returns: Be wary of promises of unusually high returns with little or no risk. If it sounds too good to be true, it probably is.
- Pressure Tactics: Scammers often use high-pressure sales tactics to rush investors into making hasty decisions. Legitimate investments allow you time to research and consider your options.
- Lack of Transparency: Avoid deals where important details such as pricing, fees, or delivery terms are unclear or withheld.
- Unsolicited Offers: Be cautious of unsolicited offers, especially those received via cold calls, emails, or social media messages.
How To Identify Legitimate Investment Opportunities
To find a trustworthy gold dealer, it’s important to follow a few key steps.
Start by checking their credentials to ensure they’re registered with relevant regulatory bodies. Moreover, you should investigate any complaints or legal issues against them.
Reading customer reviews and testimonials is crucial too; positive and verified feedback from satisfied clients is a good sign.
Lastly, always verify the authenticity and purity of the product. Use reputable dealers and request certificates of authenticity or independent appraisals whenever possible. This verification process ensures you’re getting genuine, high-quality gold bullion.
Other Ways To Protect Yourself from Gold Investment Scams
Besides finding a reputable dealer, there are additional steps you can take to ensure you don’t fall victim to a gold investment scam.
Understanding the pricing structure and associated fees of your investment is critical. Compare prices from multiple sources to ensure you are getting a fair deal.
Additionally, seek independent advice from financial advisors or experts who can provide unbiased guidance on gold investments. They can help you assess the legitimacy of investment opportunities and steer you away from potential scams.
Most importantly, trust your instincts. If something feels off or too good to be true, proceed with caution. Don’t let urgency or the fear of missing out cloud your judgment.
What to Do If You Suspect a Scam
If you suspect you have encountered a gold investment scam, the first thing to do is to stop all communication with the individual or company involved. Scammers often use persuasive tactics to keep you engaged, so cutting off contact is crucial.
Next, consider reporting the scam to relevant authorities such as the Federal Trade Commission (FTC), Securities and Exchange Commission (SEC), or local law enforcement. Doing this can help prevent others from falling victim to the same scam.
If necessary, seek legal advice to explore your options for recourse or recovery. A legal professional can help you understand your rights and potentially recover lost funds.
Invest Wisely in Gold
Investing in gold can be a valuable addition to your portfolio. However, navigating the gold market requires awareness and caution to avoid falling victim to scams. By educating yourself about common pitfalls, staying vigilant, and seeking reputable advice, you can protect your investments and achieve your financial goals with confidence.
At Bullion Standard, our mission is to provide you with the knowledge and tools to secure your financial future. We strive to revolutionize the bullion industry with transparent pricing and outstanding customer service.
How NOT to be a victim of gold scams
I have seen a lot of posts made by people who claim to be representatives of small gold mining operations, or a group of miners or mandates of someone selling gold. When I come across these posts I try to expose them for what they are, obvious attempts to scam people.
Sadly, gold fever causes people to set aside all reason, specially when the potential profits are in the millions of dollars. Brokers who are trying to operate large transactions on the dream that they will be worth millions often get caught up in these offers, and then propagate them themselves.
What I will attempt to do here is educate those who wish to buy gold and too often fall for these types of scams.
A few things first. In the precious metals industry, it is very difficult to make any profit, let alone any profit that comes anywhere close to millions or 100s of thousands or even 10s of thousands of dollars. It’s a very tough business, and most people who buy and sell don’t make it. It’s not a get-rich-quick business to be in. Even miners who hit the motherload spend sometimes millions and barely make a profit. It’s a rough, tough business with extremely small profit margins in which you have to work extremely hard to make any profit at all.
For example, Stillwater Mines, which operates in the United States and is the only large Platinum/Palladium mining effort in the US reported the 4th quarter of 2015 a 23 million dollar profit. And that is the only real mining operation of any size in the United States that mines Platinum Group metals. You are not going to make millions buying and selling gold when the actual mines are not making that much themselves.
First, I want to clarify the entire broker issue. Prior to starting my own refining company, I was involved in international trade. I owned a US based company in where I bought and sold different products and commodities. I made a decent living doing so, but it’s difficult. I came into contact with many brokers, who often were offering unbelievable deals on everything from cell phones and gaming systems, to oil and gold products. It’s sad, but many brokers will put in 16 hours a day just so they can be awake and working at the times other people halfway across the world are awake and doing business. I would say that 99% of the time these brokers are making very little if anything, yet they work hard and try so hard. For those who are trying to broker deals internationally, I have a lot of respect for your work ethic and networking skills but honestly you would probably be better off starting a company and buying/selling products yourself. If you are not doing this, you are most likely going to be spinning your wheels and never make a living at this.
Brokers are probably the most common victim, and the least noticed, of gold scams. Being offered a broker fee of sometimes as much as 5% of the sale elicits dreams of fast sports cars and a rich life. The fact is that anyone who is offering any commission on the sale of gold even 1% is most likely if not always not real.
In any of the countries where gold is mined, there are refineries which will pay many times up to 99% of London Fixed Pricing or Spot Prices, on assay against the gold percentage in the Dore’ they are brought. There is no reason for anyone to have any need to sell gold at any discount, let alone discounts like the offers seen on LinkedIn and other sites. Someone who has real, physical gold has no need to use brokers as they can readily sell the gold immediately to a reputable refinery anywhere in the world and make far more. So brokers, although I respect your work ethic, you are never going to broker any deal on gold because frankly, you are not needed. It would make no practical or business sense to use a broker to sell gold.
Many times, scam artists will use excuses for why they need a broker to sell their gold. It might be that they are not being treated fairly by refineries in their country, or it might be that they are afraid of being ripped off or treated unfairly or that someone is corrupt. These are just lies used to build confidence in why they need a mandate or representative to sell their gold. Anytime anyone uses the word mandate, it almost always with few exceptions means it’s not real. 10 years in the international trade business and never, not even once, did I ever conduct a transaction with a seller or buyer mandate, never. Not even when brokering a transaction. Large multi-million dollar companies have no need to use any brokers as they have those people already hired, they are called sales representatives.
One of the most famous scams and one that has been reported on many times is the story about Congo Born, Dikembe Mutombo, an all-star NBA defender, who was involved in a fake gold deal. Evidently, he and Houston based oil executive Kase Lawal were beguiled into believing that they could purchase around $30 million worth of the precious metal at a hugely discounted price compared to the spot price, from dealers in the African country of Kenya. You can read about it here:
Even intelligent people who are successful end up falling for these types of scams. Even worse, is conflict gold but that’s another story, and something I might post about at some later date. Point is, the scam artists who promote these scams are so good at what they do, they often are able to scam even people who are intelligent and successful.
So if you are offered an unbelievable price, it’s almost always with very few exceptions not real. And if it is real, it’s most likely conflict gold, or illegal in some way.
If the gold is being offered by a broker, or a seller’s mandate, it’s not real.
Often, these deals come with all kinds of convoluted requirements that make the transaction seem extremely difficult. These offers are also not real. There is no need for an FCO, that is a broker’s term meaning “Full Corporate Offer”. There is no need for POP another broker’s term meaning “Proof of Product” as the assay will prove the product, and nothing else. There is no need for an LOC or “Letter of Credit” as the gold is paid for upon assay by an electronic transfer. No need for blocked funds, no need for exotic financial instruments, no need for escrow or any of the other many different requirements these scams request.
Also, the buyer pays nothing until a proper assay is done but a reputable refinery in the presence of the buyer. Always, without exception, the buyer should be knowledgeable and present, or hire a someone who does know to represent their purchase. I have previously posted how to represent your material, the same holds true for buying gold. If you wish to know how to accomplish this without being ripped off, please refer to my previous post here:
Often, scam artists will show documents that seem real. They will produce any number of documents if asked. Sometimes they will even produce real documents that are fake that some disreputable government official has been bribed to produce for the scammers. Documents mean absolutely nothing if you are following the correct procedures in regards to purchasing gold. The only documents you need to concern yourself with are the assay documents that are produced at the time of assay, while you or your representative are present, from a reputable refinery or assayer that you and the seller both agree upon. You need to make sure that each step of the melt is properly witnessed, and that all the gold is melted and assayed.
A very common trick employed by scammers is to assay a very small amount which is real gold, and then to insist the rest of the gold doesn’t need to be assayed because it’s all the same. Or, if you are not present, to send you an assay that might be real, but not of the same material you will be sent. Without exception, ever, all the gold must be melted in the presence of the buyer, or the buyer’s representative and only at a refinery or assayer that both parties agree upon, and only a reputable refinery or assayer. After payment, the gold should never leave the buyer or buyer’s representative’s sight. If shipping, the buyer should arrange for proper shipping, with proper documents for shipping. Never, not ever, should the buyer allow the seller to arrange for shipping. The cargo could easily be swapped or stolen.
Personally, I would make sure the gold was sent to a refinery or assayer close to where you are doing business, in this way the concerns about shipping will be resolved and the sale can be transacted directly after assay, at the refinery without issue.
Logically thinking, there is no reason why a buyer should incur any costs prior to a proper assay. Scam artists will claim that they need money for shipping, or they need travel expenses. They will argue how it is not fair to ask them to ship the gold, yet they will also ask for money upfront to secure the transaction, many times up to 5%. If someone is selling gold, they have no need for the buyer to pay for shipping as they should have more than enough to do so themselves. And anything short of full payment is no guarantee at all. 5% doesn’t offer any security to the seller. If you are asked to pay any upfront fees, you can be assured it’s a scam. You should never pay for security, or vault storage, or shipping/travelling expenses. In short, you should never pay anything until after assay, and even then only for the percentage of gold present in the dore’ or dust or nuggets or whatever other form the gold may be in.
Scam artists will often send pictures along with their procedures. For someone who is not familiar with gold these pictures may look real. If you know what to look for however, you can easily tell that whatever is in the pictures is not really gold. I will show a few examples below.
In this example, the metal looks gold but the texture is wrong. This is of a harder metal such as brass, and painted to look like gold.
Gold is very soft, ductile, it tends to look soft specially when the purity is above 90%
This is what the text of real gold, freshly poured in bars should look like
You can see the softer more buttery look. You can also see what is called the “pipe”, right down the center of the bar. Gold, when it is poured, is so heavy yet cools so fast that as it seeks the lowest point, and seeks to be to itself actually pulls together and forms a depression down the center of the bar. This is the Pipe. Here is a better example of a pipe.
You can see the depression that runs the length of the bar clearly.
Here are so more examples of fake gold.
These bars are all different colors, and the metal is very dimpled, rough. Too much so to be gold. Remember, gold has a soft texture. Gold also does not oxidize and show be the same color for each bar if poured during the same melt.
Same with the bars in this picture, all too rough, not a uniform color and the color is way off. Also in the picture, which you see a lot of, are pellets often called gold nuggets. Gold nuggets do not form perfect circles in nature, nor is gold poured or grained in this fashion. It makes absolutely no sense to pour gold in this way when it is far more labor intensive to do so. Most likely, and this is common, the metal in these pictures is spent brass, or the casing for bullets that have been fired, which there is a lot of in West African nations, unfortunately. The pellets are most likely casting grain made for casting brass, which is plentiful and cheap.
More casting grain, not gold
As I have time, I will post scam offers I see posted on Linked In and explain why the pictures are fake.
Any documents provided by a seller are absolutely meaningless and should be ignored. If proper procedures are being followed, there is no need for any documentation as the assay is proof of gold. Documents are easily forged and often as I stated before can be real documents obtained through illegal means. Ignore documents, gold speaks loud and clear for itself.
Never pay anything until an assay is performed. Do not travel to other countries with cash in hand to purchase gold in large quantities. Small quantities of ounces perhaps, but even then you must be very careful and meet at a refinery or government office. Many people have attempted to purchase gold in what are called “cash and carry” transactions and have been fortunate to have escaped with their lives. Many have not been even that fortunate and often will end up in the hospital, or dead. I cannot stress this enough, never think you can do a cash and carry type of transaction of any sizable amount, you will end up being ripped off or worse.
Remember, the very best scam artists will also seem like the most honest and legitimate people. They work very hard at seeming to be so and will come off as being knowledgeable and honest. If you follow the proper procedures, scam artists will go away. Stick to your guns, don’t allow the seller to dictate procedures, after all you are the buyer, they should be catering to your needs. Scam artists prey on the greedy, or those willing to do things in the wrong way because they believe they can make a fortune on only one transaction.
As time allows, I will post more on this subject. If you have any questions, feel free to message me. I will be more than happy to answer whatever questions you might have. If I do not get back to you right away, I will as time allows.
The Gold Scam – and how to avoid being a victim.
As the precious metal Gold prices are scaling new heights across the world, the global gold scams are also increasing immensely. Most of the scams originate from African countries, and it is crucial that all of you who want to invest in this business should be aware how this works, so that you do not get scammed.
Any gold scam is a fraud that involves criminals posing as legitimate gold traders. They typically target people looking to buy gold from Africa. The scammer will offer to sell gold at an incredibly low price, usually called “discounted prices” and the victims will be tricked into sending money upfront for the transaction. Once the money has been sent, the scammer will disappear and the victims will never receive the gold, or their money. In some cases, the scammer will ask for 10% of the transaction amount for “shipping costs” or “taxes”, and disappear after receiving these funds. As a part of their modus operandi, the scammers will create fake websites or social media profiles to appear legitimate. They may also use a real gold trader’s name and contact information to make their scam appear more believable.
Scammers usually target people who are looking for quick profits, or those who want to convert their untaxed cash into gold, or those who are new to the gold trading market and don’t know how to spot a scam. It is important to be aware of such scams and how they work, so you can protect yourself. Here are some tips on how to spot and avoid the Scam:
• Be wary of any offer that seems too good to be true. Gold that is offered at a discount on global gold prices is a scam.
• Always research the person or company you’re dealing with before entering into a sale/purchase agreement. And, even then, never send money in advance. You will lose it.
• Don’t trust anyone who asks for advance money for “shipping costs” or “taxes”. Most scammers are targeting only the money that they can get out of the victim in these scams. Usually, the scammers will ask for 10% of the transaction value as advance for taxes and the balance as ‘payment on delivery’. However, with Gold prices hovering in the range of US$ 60,000/- per kilo, a 10% advance is a substantial amount of money, especially when the buyer loses it.
• Don’t provide any personal or financial information to anyone you don’t know. A copy of your passport, if shared with the scammer, will be used in future frauds and you will become a person of interest in police investigations.
If you’ve been a victim of a gold scam, you should report it to the authorities immediately. Finally, you should be sure to spread the word to your friends and family so they can protect themselves from this type of scam. We hope this information has been helpful in educating you on the myth of “Gold at discounted prices”.Remember to always be vigilant when dealing with gold transactions and never send money in advance.
For more detailed information on how to transact in the precious metals trade (gold, silver, copper, platinum, etc) with safety and without any financial loss, contact us for advice and services. We offer escrow account services, bank-to-bank gold purchase, and other integral services that are a part of the precious metal trade.
Be vigilant, keep safe and always involve your bank while trading in these commodities.
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