Of course this would never happen with gold -- or no one would ever dare to ask

Metals Trading Has a Paper Fraud Problem

By Mark Burton
Bloomberg News
Monday, July 3, 2017

For all the high-tech wizardry of modern financial markets, there’s one corner of the commodity world that still depends almost entirely on printed paper -- making it an easy target for crooks.

Buyers and sellers of base metals like copper, aluminum, and nickel use documents known as warehouse receipts to prove every pound involved in a transaction actually exists and who owns it. The receipts, from a long list of issuers who often stamp them with holograms and secret codes, have become the linchpin of bank loans backed by the metal as collateral.

But like most pieces of paper, warehouse receipts can be faked, and there are signs that more lenders are being ripped off by crooks exploiting weaknesses in what commodity businesses refer to as trade financing. For the second time since 2014, some banks are facing multimillion-dollar losses after being tricked into making loans secured by goods that didn't exist. ...

... For the remainder of the report:

https://www.bloomberg.com/news/articles/2017-07-03/paper-trail-on-metal-...