July 26, 2011

As the U.S. dollar and Euro seem to be collapsing, precious minerals and especially gold continues to rally to hedge inflation, and the falling value of paper money. Physical assets are in, and with real estate prices also hurting, gold is fastly becoming the new standard, once again. Gold has served as the answer to the global market, as investors see limited options on the table, and a terrible amount of uncertainty. Socialist and Anti-American policies by Barack Hussein Obama have led to excessive government spending and unsustainable debt levels at a time when America can least afford it. The repercussions of the fall of the United States under the Obama administration are global, and a possibility of a third-world style default in the new Obama America has even more investors seeking shelter in Gold. China and Russia and many others are bailing ship, and seeking financial reserves in gold as the United States show littler promise. And, with the rise of gold, everyone has been trying to get in on the action. Ghana, West Africa, is the third largest producer of gold on the planet, and it also happens to be a major center for scams and fraud. With the rise in gold prices, Ghana private investigators say scams are booming!

Gold deals and investment are taking place around the world. There are gold investors, mining and exploration, wholesale, retail, hedge funds, bars, dust, coins, gold suppliers, gold shippers, and jewelry companies and many other ways to get in the industry or invest in the market. With all the international investment and procurement of gold, it’s no wonder that scams are rising, as criminals try to profit from the surge as well. Ghana criminals mainly operate from West Africa and significantly raise the risk for investors looking for mining or suppliers for gold in West Africa. However, it’s important to know that Ghana scammers also have accomplices and networks around the world, including China, Spain, the U.K and the United States. Therefore, experts say, a Ghana scammer doesn’t necessarily need to be in Ghana. The scam and fraud is now global.

While gold is being marketed as the safe haven by financial advisors, hedge funds companies and investments consultants as a source of stability in such volatile markets and times, criminals are taking advantage of this. Online scammers are using this perceived trust and stability to convince their victims that they too are safe, and that the investment is real. The scammers will even provide a list of references, speak knowledgeable about gold, and provide government issued documents confirming they are real? Why not invest in the Ghana gold mining operation, China gold sellers, or international gold supplier? Many investors are learning the hard way that Ghana background checks and international due diligence is key to avoiding the high risk.

When you invest in a gold exchange-traded fund, you do not become the sole owner the precious mineral. For an ETF represented to be backed by gold, the fund managers will contract with a custodian to hold the gold in a vault. The custodian is usually a large, international bank, serving as a custodian for numerous customers. In Ghana, for example, one of the biggest gold sellers, the PMMC (Precious Minerals Marketing Commission) is the one holding the gold, receiving the money into an account and paying the local agent. Once the payment has been verified and accepted, a person from the PMMC will deliver the gold, usually sold as powder rather than bars as it is easier to handle. Most of the time, because the custodian is a multi-national corporation with thousands of accounts, when the precious mineral is bought or sold, the metal never physically moves. A title to the bars of gold is simply transferred from the seller to the buyer as a book entry in a computer network. Scammers know how this system works, and exploit it.

But in this world of greed and internet access, nothing is completely secure anymore. Stephen Garcia, Vice President of Private Investigations at Wymoo® International says it has become really common for fake companies with partners in China and Ghana to try to scam investors in the U.S. “What we’re seeing is some very savvy criminals posing as legitimate shippers, mining companies and representatives at the PMMC,” says Garcia. “The forgeries are very well done, and scam operations can be quite convincing. In many cases, it’s just not possible to know who you’re dealing with, especially via the internet.” By claiming they hold accounts in the PMMC, they also claim to have legal representatives in the U.S. and they show companies legal paper and most of the investors find out once they have paid, that the whole transaction was a fraud.

While the gold rush is on, law enforcement and  international private investigators say the risk should remain high for scams and fraud, and due diligence is advised.

All the best,

S. Birch
© 2011 S. Birch

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