The growing trend of gold bar scams raises questions, such as “What’s in it for the crook?” And “How does it work?”
Such scams have tricked more than a dozen people in Montgomery County, Maryland, alone, leading to losses topping $1 million in some cases. The scheme involves tricking victims into converting their savings into gold bars and handing them over to the criminals.
“Gold is very expensive and it’s very lucrative. It’s easy to transport. You could fit in the palm of your hand, put it in your pocket, and no one would know you have it,” said detective Sean Petty of the Montgomery County Police Department’s financial crimes division.
Many people don’t know how easy it is to purchase gold bars and coins, said Petty. The value of gold coins is primarily tied to the weight and purity of the precious metal, rather than its face value.
“With the click of a button, you can get it from an online retailer,” he said. “Or, you can go to some businesses to buy it — gold shops or pawnshops.”
This week, Montgomery County police made an arrest in the case of a 74-year-old Bethesda man who was scammed out of more than $1 million after converting money into gold bars and unwittingly handing them over to fraudsters.
Montgomery County State’s Attorney John McCarthy told WTOP earlier this month there have been at least 17 victims of these types of scams in the county who have lost millions of dollars in total.
Many of the victims are elderly.
“A lot of these elderly individuals, this is their retirement fund, this is their nest egg. They’ve had this money saved up and invested it for years,” Petty said. “So, they do have a lot of money to end up losing.”
While elderly victims may have more money to lose, Petty said people of all ages have fallen victim to gold bar scams.
“If you believe what the scammer is telling you, and they can be convincing, they can con you into just about anything,” he said.
Scammers often prey on people worried about the economy and who think the U.S. dollar is “going downhill,” Petty said.
“The scammer is telling the victims, ‘We need you to transfer your assets into gold for safekeeping,'” Petty said. “‘We’re going to put it into the Department of Treasury vault somewhere and you’ll get your gold back in a month-or-two time frame, and it’ll be worth more at that point.'”
However, the victim never sees the gold again.
Often, a potential victim has no idea where they might purchase gold, Petty said. A scammer will provide an address — the address for a local coin shop or a website to purchase gold bars.
According to Petty, gold bars are also difficult for police to track.
“Once you have the gold, if you end up melting it and turning it into different pieces of jewelry, we would never the know the difference if it was person A’s gold versus person B’s,” Petty said.
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