You are here

More fake gold scandalizes New York dealers

Section: Daily Dispatches

Fake Gold Hits NYC

Diamond District Finds 10 Tungsten-Filled Bars

By Michal Gray
New York Post
Sunday, September 23, 2012

http://www.nypost.com/p/news/business/fake_gold_hits_nyc_ECXVP5WQOvYwMVT...

Federal agents are investigating the peddling of bogus gold bars in Midtown.

The Post has learned as many as 10 fake gold bars -- made up mostly of relatively worthless tungsten -- were sold recently to unsuspecting dealers in Manhattan's Midtown Diamond District.

The price of gold has risen more than 600 percent since January 2000, while the S&P 500 index is down 0.6 percent over the same period.

The 10-ounce gold bars are hugely popular with Main Street investors, and it is not known how many of the fake gold bars were sold to dealers -- or if any fake bars were purchased by the public.

... Dispatch continues below ...



ADVERTISEMENT

Fred Goldstein and Tim Murphy open All Pro Gold

Longtime GATA supporters Fred Goldstein and Tim Murphy have brought their many years of experience in the precious metals and numismatic coins to All Pro Gold as metals brokers who specialize in the delivery of gold and silver bullion bars and coins as well as numismatic gold and silver coins. Fred and Tim follow these markets closely and are assisted by a team of consultants in monitoring market trends. All Pro Gold offers GATA supporters competitive pricing on all bullion products and welcomes inquiries. Tim can be reached at 602-299-2585 and Tim@allprogold.com, Fred at 602-799-8378 and Fred@allprogold.com. Ask about their ratio strategy and the relationship of generic $20 dollar gold pieces to 1-ounce gold bullion coins. Visit their Internet site at http://www.allprogold.com/.



One gold dealer discovered that four of the 3-inch-by-1-inch gold bars he bought, worth about $72,000 retail, were counterfeit.

"It has the entire street on edge," said Ibrahim Fadl, 62, who has been the owner of Express Metal Refining, a Midtown gold-refinery business, for the last 11 years. "I and the others on the street work off of trust. Now that trust is strained."

Fadl, a Columbia University graduate with a master's degree in chemical engineering who has more than 40 years in the industry, purchased the four fake bars from a well-known Russian salesman with whom he has done business.

A second 47th Street refiner who wished to remain anonymous said he was burned recently when he bought six gold bars that turned out to be mostly tungsten, with just a gold veneer. He would not comment, though, on who sold him the bogus bars.

Fadl became suspicious when he offered the salesman a deep discount for the investment-grade gold bars and he quickly accepted it, a source tells The Post.

Fadl said he did his due diligence "by X-raying the bars to ascertain the purity of the gold and weighing the bars, and the Swiss markings were perfect."

Tungsten is an industrial metal that weighs nearly the same as gold but costs a little over $1 an ounce. Gold closed Friday at $1,774.80 an ounce.

To quell his suspicion, Fadl then drilled into the bar and discovered the tungsten -- whose silver color is distinctive from gold's bright yellow hue.

Raymond Nassim, CEO of Manfra, Tordell & Brookes, the American arm of the Swiss firm that created the original gold bars -- with their serial number and purity rating stamped clearly into them -- said he reported the situation to the U.S. Secret Service, whose jurisdiction covers the counterfeiting of gold bars.

He said his company "is supporting and cooperating with authorities any way we can."

Nassim thought the culprit must be a professionally trained jeweler to have pulled off the caper.

The forger had to slice the original bar along the side, hollow out the gold and insert the tungsten ingot, and then reseal and polish the bar, Nassim said.

At an industry dinner Thursday night hosted by Comex, the New York-based metals exchange, the room was abuzz with talk about the bogus gold bars, according to Fadl.

Numerous calls to the Secret Service were not returned.

* * *

Join GATA here:

Toronto Resource Investment Conference
Thursday-Friday, September 27-28, 2012
Toronto Sheraton Centre Hotel
Toronto, Ontario, Canada
http://www.cambridgehouse.com/event/toronto-resource-investment-conference

New Orleans Investment Conference
Wednesday-Saturday, October 24-27, 2012
Hilton New Orleans Riverside Hotel
New Orleans, Louisiana
http://www.neworleansconference.com/

* * *

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16