# What to look out for in buying non-hallmarked bullion / dust



## Anonymous (Oct 4, 2007)

Hey guys - I'm new to this by any account. My background is in commercial finance and I am trying to get in the wholesale commodity game. Gold has interested me for some time and I have been studying the market for a few years.

I guess I am looking for some advice from guys who know. 

I have a partner who is very liquid with well over 4 million in cash to invest. I am pursuing a particular contract to purchase 250 kg / mo. for 12 months of non-hallmarked bullion with purity of 99% or greater purity. The plan is to have this gold bullion delivered to a refiner where it can be assayed after which time, as long as it checks out, payment is due 48 hours later. 

The refiner is warranting that they will pay a flat 94% of market value upon completion of the refining 3-5 days later. 

What should I look out for here?

Any help you can give a newbie like me is much apprecieted.

Chris


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## goldsilverpro (Oct 5, 2007)

Chris,

*If everything is legit*, I would shop around. Someone large like Hereaus should buy your gold for 99+%. We used to sell around 200 tr.oz./month to Hereaus for about 99.3% of spot, for material that ran only 50% gold. For the quantity you're talking about ($6M/month), 94% is a very poor return. Find a respected independent assayer to assay the gold before you do either side of the deal. Sounds like your greatest danger lies in your initial purchase of the material. Get all your ducks in a row. Know what you have before you buy it or sell it. Before you deal, you maybe should lock in the same price with both seller and buyer. Don't trust anybody. Maybe hire a trusted expert rep. to be involved in both ends of the transactions. Try to think of all the possible ways you can get screwed and plug those holes. I could go into much greater detail but, these are a few of the basics.

The question I always ask in these deals is why the person you're buying from doesn't sell it to somebody like Hereaus, to start with, for 99.3%? If they are big enough generators to have $6M worth of gold per month, they absolutely know that they can sell it for top dollar. Why are you, the middle man, needed? If you are truly what you are representing, I would see all of this as a *Huge Red Flag*. It sure sounds squirrelly to me. If I had $1 for every one of the very similar deals, with similar numbers, that I've heard of over the years, I would go to Jim's Steak House tomorrow night and order a rare, 24 oz, 2 1/2" thick filet. 

Chris


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## Anonymous (Oct 5, 2007)

Chris - thank you for your advice and insight. The red flag you refer to, ie. why is a middle man needed?, is a question that I have considered. I can think of a few reasons that such a middle-man could be required. I am not an importer perse, but it seems to me that this importer might also need an MT760 or bank guaranty or stand-by letter of credit to have the gold imported himself. I have examined his home residence on Google Earth and done some due diligence and I can tell you he has been an importer in Florida for over 30 years. His house is valued at $329,000.00. This does not seem like a guy who has 3.5 million, or 36 million as the contract may require for delivery. In fact, such verifications and guarantees are hard to get (it seems to me so far) if you do not actually have the money. Also, this is not risk free in that a twelve month commitment is required at a certain purchase price that could result in loss if gold prices were to decline sharply. If I am correct in these thinkings then it is a more pressing danger, I think, that he will possibly use my bank guaranty to get the gold bullion shipped into the US and he will then take it and direct it as he sees fit. The contractual obligation however should be sure to prohibit this and being that he is contracting with an entity with millions of dollars for potential litigation it does not seem that he would go that way. In your experience, am I reading this situation wrong?


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## catfish (Oct 5, 2007)

Hi Cris:

I am very amused about your business proposal on handling the imported gold and reselling of such. 

First, my good friend Cris has given you some very good advice. You may want to rethink your proposed deal. I personally am retired from the corporate business world and like Cris have seen many good deals go up in smoke. I have learned that if a deal sounds too good to be true then it most likely is not true.

I can see several pit falls in your proposal. First when you get involved with imported gold bullion, this comes under the new Federal money laundering laws and can get very complicated and not to mention being scrutinized by the feds very closely. Question, are you ready to expose your self, all your family and friends to this. The Feds can be ruthless. Secondly, as Cris sez, if this was a real deal, why would this individual need a middle man? Thirdly, if you have any gold in quantities for sale of good quality, you can get between 99.5 to 103% of spot for it from reputable buyers. This is just a few of the possible pitfalls.

To give you an ideal on how my gold buyer works. When he buys my karat gold at 98% daily spot, he books it with his buyer at the exact time for the 99.5% to 99.99% pure refined gold at 100 to 102% of spot. (Depending upon the pureness of the gold.) He has to guarantee the delivery with in five days.

You can beat the sale price of the gold. The deal that you have outlined appears to be very risky and has the potential for huge liabilities to you and your partner. I strongly recommend that if you are seriously contemplating going into this deal, that you hire a consultant or professional in this field to give you guidance in this matter.

I hope my good friend Alfa will weigh into this for he has a lot of experience and a very sound business knowledge in this sort of activity.

Lots of luck

Catfish


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## goldsilverpro (Oct 5, 2007)

cjnohl,

Do these alleged gold bars come from Africa?

Just like in the mortgage broker industry, it's difficult for the layman to pinpoint exactly where the scam is, unless you're looking at the picture from the scammer's viewpoint. Maybe you're right. Maybe the contract is where it's at. Maybe no bars exist. Maybe the bars are brass. Maybe they plan on a switch. Lots of very bad possibilities. The scams can exist only because of greed on the victim's part. The easiest people to scam are the scammers. If I were you, I would walk away. It just smells too fishy to me.


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## Anonymous (Oct 5, 2007)

Thank you all very much for your input. In the nature of my business, debt obligation origination, it is key to know what you are doing or to get help from somebody who does know lest you end up being interrogated and/or arrested by the FBI. In fact many things the majority of people in real estate believe to be legal are actually explicitly illegal. 

Because I am not experienced in gold-industry types of matters I have come to you all trusting that the experience among you will steer me right. You have given me very good advice and ultimately it is advice that will save my ass in one way or another. Fort this I am very grateful.

I am here however by virtue of my own skepticism. I believe the bullion would be coming from Brazil as all of the other deals I have verified from this importer also originated from suppliers in Brazil (such as used rails, concrete, scrap, iron ore, etc.). I have seen the SUPER-FISHY (no offense fishy lol) and famed Africa "deals." What attracted me to this one in particular was that it felt authentic and was posted by a US citizen in the US. Payment was not necessary until 48 hours after confirmed assay of choice. 

I am willing to believe that this is a scam of some sort but I do not understand how it could be if I am choosing the delivery point and assayer with the verified gold in my possession prior to payment UNLESS there was some problem with chain of title. 

1.) You guys suggested we hire an expert to navigate thru the money laundering or illicit risks. Do you have anyone you would suggest?

2.) In your experience or knowledge has any deal like this ever taken place successfully? Ie. one where gold bullion or sponge is bought for less than 65% of market value?

3.) If one were to go physically to impoverished mining regions of the world would it be possible to negotiate purchases along these prices directly from the mines or miners? Hvae you heard of anyone other than Theodore Rhodes doing this?

Thank you again -

Chris


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## aflacglobal (Oct 6, 2007)

Yes Catfish I have been watching. Fed rate ( Chris ) p.m. me the mans name and any info you have on the deal. I got a trick or two up my sleeve. :wink: 


I live for the hunt. It's been awhile since i had a good old southern coon hunt. :shock: 

Sounds scammy to me. I'll show you the work arounds to get your gold here. Legally without all that crazy chasing your tail.


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## goldsilverpro (Oct 6, 2007)

> 1.) You guys suggested we hire an expert to navigate thru the money laundering or illicit risks. Do you have anyone you would suggest?



The most qualified are the old established assayers-representatives-umpires (google these keywords). They are very expensive but very reliable. Whether they would do the type work you need, or not, I don't know. It would be worth a call. If you could find someone to talk to you about your problem, they could at least steer you in the right direction. Probably the best known is:

http://www.ledoux.com/

Many years ago, the companies I worked for always used Ledoux. Here's a quote from their website. Sounds like what you need. If you pay them enough, they will probably travel anywhere. After 128 years, they surely know all the tricks and scams. Your particular type deal is quite common and I'm sure they've dealt with it 100's of times. 

"Ledoux and Company is an independent commercial metallurgical chemical laboratory which has been family owned and operated continuously since 1880. *The company acts as representative for importers and exporters,* providing analytical services for many ores and concentrates. We provide facilities for the composition analysis of a wide range of materials. *Samples are submitted by major refiners and traders for exchange quality results; and for more rigorous umpire type.*Virtually all elements can be measured but particular expertise is available in the determination of precious metals, base metals and trace impurities."

I would suggest not going with bargain basement assayers-reps. Were it me, I would go with the tried and true. It will probably cost several thousand dollars, but that's a trifle when you're talking about the possibility of losing millions. Actually, you probably won't do the deal at all. After talking with Ledoux, you'll likely be convinced that it's a scam. You should realize, however, that Ledoux is in the business of actually doing the rep and assay work. They will probably do what you want, whether this is a scam or the real deal. When you first talk to them, do a little probing and find out what their thoughts are about whether or not it is real.



> 2.) In your experience or knowledge has any deal like this ever taken place successfully? Ie. one where gold bullion or sponge is bought for less than 65% of market value?



I have personally been involved in two of these deals, when I was young, foolish and greedy, but they both just fizzled out. I have never heard of any of these type deals actually happening. I could never figure out the scam. It surely has something to do with paperwork, money up front, sleight of hand, or ??? I do feel that, once they see that you're doing things right, in a way to totally cover your butt, they will just disappear. That's been my experience.



> 3.) If one were to go physically to impoverished mining regions of the world would it be possible to negotiate purchases along these prices directly from the mines or miners? Hvae you heard of anyone other than Theodore Rhodes doing this?



In most of these third world gold producing countries, there are individuals that work the slag piles and dig a bit on their own. In some countries, maybe 10% of the total gold is in the hands of these individuals. You could probably buy cheap (probably more than 65%, though) from them but, getting the gold out of the country might be a big problem. Also, you'll have to pay cash and carrying cash could be very dangerous in gold country. About 30 years ago, a big mining company in Alaska wanted to hire me and helicopter me into mining camps, along with armed guards, to buy gold for cash. I said Thanks but No Thanks. 

In my experience, buying large quantities of good gold anywhere, for anywhere near 65% of spot, is a dream. I know that I come across as pessimistic but, after 40 years in the business, I have learned to always first think of all the negatives and then work backwards. Gold attracts crooks, maybe more than in any other industry that I can think of.

A problem with these deals is, when you get slightly hooked (as you are), it always wastes a lot of time, effort, brainwork, and usually money, just to try and figure out what's going on and, if you decide to go ahead, to try and plan for all of the possible bad things that can happen.


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## Anonymous (Oct 6, 2007)

Thank you all for continuing to educate me. :lol: 

I am young enough (and unmarried enough) to still find the idea of venturing to a foreign country with armed guards slightly appealing. This is not out of the question for me.

On the other hand - I am going to send this 'seller' I have been speaking of a LOI and BG and begin contract negotiations. I will continue to post the events and documents as attachments for all of you to see and comment upon as things progress, so that, at least, you can maybe tap me on the shoulder when you see the scam part coming. :shock: 

Thank you again and I will keep you updated.

Luck! - Chris


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## Noxx (Oct 6, 2007)

[email protected] said:


> I am young enough (and unmarried enough) to still find the idea of venturing to a foreign country with armed guards slightly appealing.



You can't be younger than me lol.


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## Anonymous (Oct 6, 2007)

Thanks again - how old are you Noxx?


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## goldsilverpro (Oct 6, 2007)

Whatever.


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## aflacglobal (Oct 8, 2007)

Ask him why he is not listed here >>> http://www.sunbiz.org/corioff.html
I would think With all that money and resources he would need a corp. shield to protect his assets from personal liability. I notice he has a business license. Hell i can get one of these for $ 100.00. Is that the best he can do ? Moving money in and out of the country ? Does he have a AML program ? If so who is responsible for administering it ? Tell him under your AML program guidelines you will need his fed tax ID #. If he doesn’t have one than he is required to show his personal ID with all pertinent information which must be recorded and logged.

Who does he bank with ? I will need to speak with your commercial account representative from your bank. Who is his accounting firm ? Going to need to know that to send the paperwork to. I assume he doesn't do that end of it to. Does he have an import export license ? It requires a bit more that a business license the last time I checked. Or does he use a third party for imports ? If so who ? 

Shit before I hand you $ 10 mill I’m going to need three forms of ID, pictures of your family ( Including pets ), And your first born child. :shock: :shock: :shock: 

Kitty going to have fun with this. :twisted: :twisted: :twisted:


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## Anonymous (Oct 8, 2007)

And a DNA sample.


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## Irons (Oct 8, 2007)

How about insurance?

After he gets done with you, can I have a whack?


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