# a CASH FOR GOLD scam that was scamming the gold buyer.



## user 12009 (Jun 11, 2012)

Last saturday one of my last yardsale stops was a trailer park community wide yardsale. All vendors were setup in one place. One of the vendors was a CASH FOR GOLD type buyer, she also lived in the park. I played it dumb and started talking to her. It only took a minute to tell she was VERY new to the game. But, she had a big professionally made banner and several bottles of testing acids and a powerful loupe. 

I didn't have the heart to tell her she was being scammed but I hinted. She is a new member of http://www.thegoldrefinery.com and she paid her $300 to get there. They gave her a sign, business cards, the loupe, the acids and some training. She hosts gold parties too. She told me if someone brings in too much gold and she does not have enough cash "thegoldrefinery" send a runner with the needed money. She also said they keep pushing her to "recruit" new buyers because she will make money on what they buy. RED FLAG TIME!!! I asked if this was multi-level-marketing and she said yes. So I had to be nosey and ask how much they paid her. She was proud that she gets 10% of all buys. 

I told her about 14K never being 14K and she had never heard that before, also electronic testers which they didn't tell about either. (I wonder if the acids are properly marked to read low?)


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## Anonymous (Jun 11, 2012)

Lol.....
Very nice Dan.Hopefully you can set her straight and she will start working for you now.


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## eeTHr (Jun 11, 2012)

cyberdan---

I've heard that in California, you must have a pawnbroker's license in order to legally buy gold jewelry from the public, and that this license requires a $100,000.00 bond. How does she get around that? I would assume that her "company" holds the license---If so, is she considered an employee of that company, or can she buy the jewelry under their license, as an independent contractor for them?


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## NobleMetalWorks (Jun 11, 2012)

eeTHr said:


> cyberdan---
> 
> I've heard that in California, you must have a pawnbroker's license in order to legally buy gold jewelry from the public, and that this license requires a $100,000.00 bond. How does she get around that? I would assume that her "company" holds the license---If so, is she considered an employee of that company, or can she buy the jewelry under their license, as an independent contractor for them?



It's called a second hand dealers license, essentially what you called it a pawnbroker's license. And yes, in California you must have this or you are buying gold illegally. I am not sure of the legalities for buying gold off eBay, but it seems to somehow circumvent it. In California, there are sting operations going on constantly because theft and sales of stolen gold items is so prevalent in the state.

You also have to be a weigh master and use a scale that has been calibrated and is in a location where it is stable, level and is not moved otherwise it needs to be calibrated again. It must be tested and certified by the California Department of Food and Agricultureʼs County Office of Weights and Measures, and the person operating it must be, and I know this is a goofy name, a weigh master. This just really means you know about your scale and how to operate it correctly.

You also have to take some form of state or federal ID when buying gold.

You have to hold onto the items you purchase for 30 days, and send a copy of the description to your local law enforcement agency, and if the description matches something they have a report on as being stolen, they will want to come to your place of business, and may confiscate it which you will not be compensated for. You have to be very careful with this in the State of California, they do not suffer people buying stolen goods lightly here.

It also looks like, in the fairly near future, second hand dealers will have to report to a state wide computer network what they have purchased. 


> The State Senate Committee on Public Safety has unanimously passed AB 391, a bill authored by Dr. Richard Pan (D-Sacramento) that would create a statewide partnership to build an online reporting system allowing law enforcement, pawnbrokers and secondhand dealers to work together more effectively to track potentially stolen items.



And you are correct on the bond as well Dan

The only way I can see that she would be able to do what she is doing, legally, is if she is working under their second hand license, which might very well be the case. Even if that is so, she would have to be a weigh master, have a stationary scale, scrutinize a State or Fed Government ID, report it to her local law enforcement agency, and retain all the items she purchased for 30 days to give law enforcement ample time to ensure the items they purchased were not stolen. etc etc etc.

It doesn't seem to me that this company is working within the state or local laws of California, just looks like a quickly thrown together MLM in an attempt to grab as much gold material as possible.

Scott


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## samuel-a (Jun 13, 2012)

Is it her money that she use to buy gold or theirs?

I will gladly take a 10% commision out of any gold boying deal if it's not my money at risk.
Be it the other way around, it is indeed a scam and they played her good...


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## goldenchild (Jun 13, 2012)

eeTHr said:


> cyberdan---
> I've heard that in California, you must have a pawnbroker's license in order to legally buy gold jewelry from the public, and that this license requires a $100,000.00 bond. How does she get around that? I would assume that her "company" holds the license---If so, is she considered an employee of that company, or can she buy the jewelry under their license, as an independent contractor for them?





SBrown said:


> It's called a second hand dealer’s license, essentially what you called it a pawnbroker's license. And yes, in California you must have this or you are buying gold illegally. I am not sure of the legalities for buying gold off eBay, but it seems to somehow circumvent it. In California, there are sting operations going on constantly because theft and sales of stolen gold items is so prevalent in the state.



Yes. It's called a second hand precious metals and gem dealer's license. I'm currently working on getting mine and it's a pain in the you know what. A lot of legwork and money. At least in NY. It's brand new in my county and I will be literally the first one to get one. Enforcement is very lax... well nonexistent in my county as it’s a brand new initiative. This is all for my business I will be opening soon. Steppin’ up my game.



SBrown said:


> You also have to be a weigh master and use a scale that has been calibrated and is in a location where it is stable, level and is not moved otherwise it needs to be calibrated again. It must be tested and certified by the California Department of Food and Agricultureʼs County Office of Weights and Measures, and the person operating it must be, and I know this is a goofy name, a weigh master. This just really means you know about your scale and how to operate it correctly.



These scales are called "legal for trade" scales and are certified by NTEP. They are expensive too. The least expensive one I can find is about $300. I haven’t heard about having to become a weigh master. Is there some type of training you have complete in order to become a weigh master or are you speaking of inspectors? In NY there are inspectors that can come around and test and inspect your scale whenever they please. They can also ask you for your papers. Very Gustapo type stuff.



SBrown said:


> You have to hold onto the items you purchase for 30 days, and send a copy of the description to your local law enforcement agency, and if the description matches something they have a report on as being stolen, they will want to come to your place of business, and may confiscate it which you will not be compensated for. You have to be very careful with this in the State of California, they do not suffer people buying stolen goods lightly here.



Here its 15 days before you can dispose of the scrap. You must keep triplicate copies of the transaction recording the person’s driver's license number, description of the jewelry and physical description of the PERSON! One copy goes to the person one is for you and one is for the Sheriff which must be submitted within 48 hours after close of business.



SBrown said:


> And you are correct on the bond as well Dan
> The only way I can see that she would be able to do what she is doing, legally, is if she is working under their second hand license, which might very well be the case.



The $100,000 dollar bond isn’t as bad as it seems. The person will actually only have to pay 1-5% of the $100,000. These bonds are obtained through bond agencies such as Marshall & Sterling. I can see the pyramid sche *cough* I mean company she's working for putting up $1000-$5000 dollars without blinking. Think of how much she could potentially bring in in one day. This, and that she probably has to pay it back if it’s fronted to her by the “company”. Here it's only a $2000 bond and I had to pay on the high end at $100. This is per year by the way. It's all about how much money the state and government can make off of you without having to do anything :evil: They are the biggest scammers and theives of them all.


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## Spike830 (Jun 14, 2012)

Hello, everyone, I am very, very new to what most of you know quite well. I arrived at this forum because I got a link to a video for a system called the Gold Profit Formula, I have been looking for something to get into because I am just so burned out on construction. Well, it seemed like a good idea, but I have learned in the last couple years to really look at a number of different sources of information before jumping into anything. It's obvious that there is a lot to this business of buying and selling scrap gold, can anyone point me in a good starting direction?


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## publius (Jun 15, 2012)

How to make a million dollars refining gold: Start with 2 million dollars.


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## joem (Jun 17, 2012)

Get your tools, check for licenses, know your competition, practice with dry runs on friends and family to get your pitch and procedures correct, offer better than the others but still make a profit, don't gamble on auction sites, build a good reputation, believe in what you and tell everyone in every way what you do, keep when prices are low, sell when prices are high, and always have a back up plan on the go in case it does not work out for you, and lastley don't quit your day job until you reach 3 times your income plus health benefits. Just my thoughts.


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## georgieB (Jul 2, 2012)

Gold has always been seen as a nice safe store of value. During a period of civil instability, gold is a way to protect assets, it is portable, easy to hide, and can give you something to hang on to when everything else is lost. Thus, Gold buying scams still abound. Some look to buy or sell to make some quick cash but many wind up as victims of a scam. Buyers and sellers alike should be checked out beforehand by the consumer.


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