Hard asset investors must beware: counterfeit gold bars have surfaced in New York. Fox News has the story linked below…
…but investors need to know that the best way to avoid the risk of counterfeiting in hard asset investing is to buy gold in the form of PCGS– and NGC-certified gold coins. These two respected grading services guarantee the authenticity of the coins that they certify and encapsulate in sonically sealed “slabs,” thus removing the risk of counterfeiting for individual investors…
Fool’s gold: Counterfeit bars turn up in New York
A jeweler in Manhattan’s Diamond District learned the hard way that all that glitters is not gold.
Ibrahim Fadl, a chemical engineer who owns a business near 47th Street and Fifth Avenue, bought four 10-ounce gold bars and decided to check them out further since he heard counterfeits were making the rounds, MyFoxNY.com reports.
Fadl, who paid $100,000 for the merchandise, drilled into several of the bars and found gray tungsten, which has nearly the same density as gold, making it difficult to detect. The same thing reportedly happened in Great Britain earlier this year, and finance blog ZeroHedge.com reported that in 2010 German refiner W.C. Heraeus claimed to have received a 500-gram bar from an unnamed bank that proved to be filled with tungsten.
The scheme purportedly involves a genuine gold bar that is purchased with serial numbers and authentic documents and is then hollowed out to be replaced with tungsten. The bar is then closed up to finalize the sophisticated operation, the website reports.
Manfra, Tordell & Brookes, the Swiss manufacturer of the gold bars, warned customers to only buy from reputable dealers. Raymond Nessim, the company’s CEO, said he has reported the incident to the FBI and the Secret Service.
Secret Service officials, meanwhile, told FoxNews.com an investigation is ongoing, declining further comment.
Fadl, who could not be reached for comment, told NY1.com that the shell of the gold was sold to him by a customer at his gold refinery business and peeled off like foil on a candy bar.
“It’s got to be somebody really, really professional,” Fadl told the website. “When I analyzed them, it showed they were tungsten.”
Fadl said a colleague tipped him off to the scam, prompting him to further inspect the gold bars.
“Sick to my stomach, but thank God we didn’t sell this to somebody,” he said when asked how he felt. “People are selling their homes to buy gold, it’s a big issue.”