The Dictionary of Financial Scam Terms: The truth vs. the scam


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Precious metals should never be purchased from or sold to anyone other than a precious metals broker  or seller of good repute.  Good repute can only be established by independent research performed by the buyer or seller before getting involved in any transaction.

There are many sites on the Internet that provide an excellent education about various precious metals such as gold and platinum, and one should never consider getting into the precious metals market without a thorough understanding of every aspect of the metal of interest, including its mining history, differences in value, history of values, market routes, all uses, best known dealers, political impact on the value, pitfalls, risks, what is possible and what is not possible, and much more.

Buying and selling gold can be as simple a transaction as working with a local coin dealer or jeweler for small amounts such as heirloom jewelry or a few coins.  When the amounts are significant, transactions are much, much more complicated and should not be handled without experienced and specialized advice, again - from a reputable precious metals expert.


Gold scams are among the most popular of the precious metals scams.  Gold scams have been a traditional scams among the Nigerian fraudster families for generations. 

Gold scams come in many forms, from buying phony gold mines to buying non-existent gold bullion.  Many gold scam deals involve gold supposedly stashed in the Philippines, in Swiss vaults; left over from the Marcos regime, from World War II Nazis, straight from mines located in Nigeria or other African nations; in 99.9 gold bars, powder, refined, unrefined, and on and on.  

Scam artists often want the victim to show up at some bank with a suitcase full of money.  The money isn't going into the bank, the suitcase is merely being "exchanged for pure gold".  Whatever the means of money exchange, it is always "in advance" of the release of [fake] documents or the non-existent gold or coated ingots.  That is why these scams are generically known as Advance Fee Fraud.

Sometimes the scams are simple, sometimes complex involving securities, BLOCKED FUNDS, insurances, special transportation arrangements, PARALLEL ACCOUNTS, banks in several countries, the Federal Reserve, HISTORICAL GOLD BONDS, and whatever combination needs to be assembled to part the unwary from their money.  Some of the more popular scenarios involve Arab princes or emirs (usually princes) and royal family names are bandied about with abandon.  Regardless of the claimed title or affiliation, it is always a name or title that is meant to inspire a feeling of privilege in the target: Rubbing elbows with the rich and famous.

All documents are fake.  Some were the genuine article once upon a time, but those shown to buyers or sellers caught up in these scams have been greatly altered to fit the occasion.  This includes documents of authenticity, assayers' reports, customs documents, insurance documents, shipping documents, sales documents, provenance reports, ownership transfer documents, bank documents, storage documents, mine reports, etc., etc.

One must also watch for attempts at incriminating the targeted victim by way of persuading the target to lie about the source of the gold, supposedly in order to slip the shipment past local or international restrictions.  This gives the fraudster leverage over the target to use at a later date to manipulate the target into obtaining more funds.  The leverage is entirely fake, but the target doesn't know this and believes he or she has broken the law and may rot away in a foreign jail for the rest of his life.




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