The Latest Gold Fraud Bombshell: Canada's Only Bullion Bank Gold Vault Is Practically Empty

Tyler Durden's picture

Continuing on the trail of exposing what is rapidly becoming one of the largest frauds in commodity markets history is the most recent interview by Eric King with GATA's Adrian Douglas, Harvey Orgen (who recently testified before the CFTC hearing) and his son, Lenny, in which the two discuss their visit to the only bullion bank vault in Canada, that of ScotiaMocatta, located at 40 King Street West in Toronto, and find the vault is practically empty. This is a relevant segue to a class action lawsuit filed against Morgan Stanley, which was settled out of court, in which it was alleged that Morgan Stanley told clients it was selling
them precious metals that they would own in full and that the company
would store, yet even despite charging storage fees was not in actual possession of the bullion. It appears that this kind of lack of physical holdings by all who claim to have gold in storage, is pervasive as the actual gold globally is held primarily in paper or electronic form. Lenny Organ who was the person to enter the vault of ScotiaMocatta, says "What shocked me was how little gold and silver they actually had." Lenny describes exactly how much (or little as the case may be) silver was available - roughly 60,000 ounces. As for gold - 210 400 oz bars, 4,000 maples, 500 eagles, 10 kilo bars, 10 one kilogram pieces of gold nugget form, which Adrian Douglas calculates as being $100 million worth, which is just one tenth of what the Royal Mint of Canada sold in 2008, or over $1 billion worth of gold. As Orgen concludes: "The game ends when the people who own all these paper obligations say enough and take physical delivery, and that's when the mess will occur."

Also note the interesting detour into what Stephan Spicer of the Central Fund Of Canada, said regarding his friend at a major bank, who wanted access to his 15,000 oz of silver, and had to wait 6-8 weeks for its to be flown in from Hong Kong.

It is funny that central bankers thought they could take the ponzi mentality of infinite dilution of all assets coupled with infinite debt issuance, as they have done to fiat money, and apply it to gold, in essence piling leverage upon leverage. They underestimated gold holders' willingness to be diluted into perpetuity - when the realization that gold owned is just 1% of what is physically deliverable, you will see the biggest bank run in history.

Link to full Eric King interview.

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BorisTheBlade's picture

http://www.youtube.com/watch?v=eV6Wh-KX3bY

Notice starting @ 0:24:

"- I was the first bubble artist in America to get a government grant to research, create and perform a soap bubble show.

- Paid by the government?

- That is correct.

- These are your tax dollars at work. You know, considering some things your tax dollars are spent on, soap bubble blowing seems like an efficient expenditure."

That's ironic, because by far the most skillful bubble artist, Ben Bernanke is also sitting on the government payroll.

jeff montanye's picture

give me soap bubbles (even bathtub bubbles) over the financial, war, foreign and national security policies of the bush/obama administration.

The Disappointed's picture

BorisTheBlade!

I blame those godd(ess)less Chinese too!

They also invented paper money, three times, all of which ended in hyperinflation.

And each time wound up back on the silver standard....

 

SWCroaker's picture

******-> The article refernces a visit to "Scotia Mocatta", the only and only bullion bank?, which is part of the Bank of Nova Scotia.  Central Fund of Canada's annual report clearly states:

".... Central Fund’s bullion is stored on an allocated and fully segregated basis in the
underground vaults of the Canadian Imperial Bank of Commerce (the “Bank”), one of
the major Canadian Banks, which insures its safekeeping.'.

 

Unless Scotia Bank and CIBC are one and the same (don't think so), the jump to a conclusion that CEF is lying about its holdings is very short on credebility.  The quote above was taken from CEF's 48th *annual* report; this bullion fund has been in business almost as long as I've been alive.  It is going to take more than bad jouranlism to shake my faith in CEF.

<-*********

Jesse's picture

 

I thought the headline was exceptionally sensationalistic based on what the article revealed.

Stuart's picture

the meat is in the linked Eric King interview.

IBelieveInMagic's picture

The interview sounds completely phony -- touches of The Sting to me!

merehuman's picture

Nadler reads totally phony to me. HI

GetZeeGold's picture

Knuckles is planning his counteroffensive as we speak.

 

$600 gold by June 1st. That's his story and he's sticking to it.

BobPaulson's picture

I have my mortgage and chequing account with Scotia. When I tried to buy physical gold coins from them it became a bureaucratic labyrinth very quickly. I couldn't figure out why the only gold vending/holding bank would make it so hard for a customer to just buy some %&$*ing coins on a monthly basis. Now I know.

 

It's easier to buy it over the internet and have it FedEx'ed. And yeah, I'd recommend buying in small quantities regularly.

Spitzer's picture

Yeah they are hard to deal with. they would not sell to me unless I disclosed by social security number and they charge $25 an oz commission and then a 5% sales tax.

Eally Ucked's picture

I don't have any idea where they store gold but the article states that Canada's "only bullion vault" is empty which implies that even CIBC should keep their gold under administration at that vault.

I wonder about Canadian Mint vault, is it existing or it just nice name for part of the floor at Scotia Mocatta?

ZerOhead's picture

Yes it does in fact exist... unfortunately the only gold in it is a couple of atoms thick and is only on the foil in which the chocolate mints are wrapped!

Cognitive Dissonance's picture

LOL

Absolutely brilliant!

Which means we must pray for a once in a 1000 year Canadian heat wave to overwhelm the vault air conditioning to expose the Gold fraud. Add some caramel and peanuts and we'll have a party.

Mmmm, looks like Gold, tastes like chocolate. Two great experiences in one. Wasn't this how Resse's peanut butter cup was created?

http://www.youtube.com/watch?v=DJLDF6qZUX0

hamurobby's picture

Chocolate too? no wonder their currency is doing so well... not to mention all the oil they have... should we invade since they are holding out? <sarcoff>

The Disappointed's picture

Chocolate and gold foil?

April Fools!

Double down's picture

PHYS is stored there according to Sprott.

lucky 81's picture

I'm only guesstimating but i see the 'central' reference as a mistake in need of some clarification. The scotia macotta is the canadian member of the LBMA and is nothing to do with the CEF. The central fund of the LBMA however....

Jessica6's picture

You are correct - they are different banks. And the Royal Canadian Mint is yet again a separate entity - http://www.mint.ca/store/mint/customer-service/faq-1100010#bullion1.

I don't know the motives of those claiming 'fraud' in every instance that involves gold apart from the mining companies (if you knew mining companies you'd LOL) but they're suspect to say the least.

Attila's picture

SW Croaker;

If one reads the transcript of the interview, It is clear that the man from the CEF is referring to another person who found Scotia-Mocatta short of inventory. There is no suggestion that CEF is short of inventory.

 

ATH

Carl Marks's picture

I spoke to an investor services rep with CEF this afternoon. He confirmed that CEF stores its gold and silver in allocated accounts at Canadian Imperial Bank which is not affiliated with the Bank of Nova Scotia. 

Spitzer's picture

Round of applause, we finally have a serious response about a serious story. Too bad I had to read a page of complete bullshit before getting to it.

CookieMonster's picture

NICE people still trust them, maybe 40% of the country. But their numbers are dwindling fast.....

DaddyWarbucks's picture

+1. Trust. After information it is the most valuable commodity in the world. Gold, PMs, paper, seashells, whatever the tokens may be it is trust that makes them valuable as a medium of exchange and hence as a store of value.
Want to know how valuable it is? just ask any confidence man. It shouldn't be hard, take a walk through New York or Washington D.C. and you'll find many con men. Their stock in trade is trust.
It is rapidly disappearing and so it will become even dearer.
Properly deserved trust is what really makes an economy run.

DaveyJones's picture

the economy and everything else. Excellent comment

LeBalance's picture

+1+1 Spot on comment and Spot on Avatar / Screen name. Well done.

hamurobby's picture

BUT, if they are out of tulip bulbs.. their days are numbered....as you mentioned, CONfidence is the key to all forms of trade.

Al Gorerhythm's picture

Yes, and the only way to confirm your trust is to go and try to redeem your gold and silver certificates. They are similar to the ones that the US treasury used to distribute. Try redeeming your FRN's for anything other than another FRN and see how far you get with that. The last trusting tight-fisted holder of those fallacious and deceptive links to credit, are going to be most disappointed. 

SWRichmond's picture

Properly deserved trust is what really makes an economy run.

!!!!!  Since most of our interactions with most of the other humans on this planet are economic in nature, you are absolutely correct.  My capital will stay in hiding until it is safe for it to come out and play.

Quintus's picture

Whereas, because it is audited regularly and independently, we can be completely sure that Fort Knox is absolutely stuffed with all the stated gold reserves.  Not Tungsten.  Or receipts from JPM for all the gold they have leased and sold.

Yeah sure.

Imagine the surprise on the face of Auric Goldfinger if he were to break into Fort Knox today and only then realised the huge flaw in his plan....

 

samsterns's picture

It was Auric Goldfinger not Erno.  And the Fed and Treasury already fulfilled Goldfinger's plan.  Remember he did not want to steal the gold at Fort Knox, just detonate a radiological device that would render the gold useless for 50 years or so.  Right now that would be the equivalent of the Comex and electronic paper gold.  If we can bust the paper gold exchange/traders and force all future gold trade to be in physical, then our physical gold would experience the same rapid appreciation as Auric had hoped his would have enjoyed had he succeeded.

 

Funny how Auric teamed up with the Chinese in the movie to help him take advantage of the chaos that his plan would unleash.  Might not the Chinese have an important role in this version in helping to bust the Comex in our real life scenario?  Fact is stranger than fiction.

Dr. No's picture

Thank you samsterns for the correction.  I will have Goldfinger's people remove you from the list.

clymer's picture

I wouldn't care if that Gold was radioactive! I would slather my self all over it naked until I was hairless and toothless, muttering "precious.. Oh, my precious.."" through bleeding gums.  Once I was sufficiently terminal, I would locate some kind central banker and give him a naked, bleeding bear hug (hoping for cross-contamination of the radioactivity).

 

A person can dream

FEDbuster's picture

Seems that GATA is playing the role of Auric Goldfinger for us gun toting, goldbugs.

hamurobby's picture

80 million gold eagles served (just a number) ....but whos counting? anyone?

The Disappointed's picture

Pussy Galores's Flying Circus!

Where's Oddjobs? Oh yeah, he got electrocuted.

(huffing nerve gas(

KidHorn's picture

CEF says it's gold is stored in a canadian bank. Did CEF have to fly the gold in from Hong Kong? Something doesn't make sense.

Quintus's picture

It makes perfect sense.  Just like the Comex, the LBMA, GLD and SLV - all they have is vaults full of empty racking, with the occasional moth fluttering about in the wide open spaces where the metal used to be.  When someone calls their bluff and demands delivery, all hell breaks loose and they scramble about attempting to acquire metal from whichever central bank will help dig them out of the hole into which they have dug themselves.

hedgeless_horseman's picture

That is because Hong Kong is part of Canada.  No.  Wait a minute.  I think I have that backwards.  It is Vancouver that is part of China. 

Now does it make sense?  No?  Sorry.

Lionhead's picture

Yes, they do, but NOT the Scotia Bank.  Go here & read the 1st Quarter report:

http://www.centralfund.com/quarterlyreports/2010%20Quarterly%20Reports/CFOC%20-%201st%20Quarter%20Report%20-%20Feb%2023%202010.pdf

The bullion is held in the Canadian Imperial Bank of Commerce. The headline of this post in not correct.

43 Steelie's picture

I would have to agree with Lionhead here. I'm failing to see the link here between Scotia and CEF.

Quintus's picture

Lovely document.  Nice layout - lots of comforting words on it.  Does it prove anything?  No.  If you think it does, well I've got some lovely Madoff vintage documents for you demonstrating beyond doubt that 'Ol Bernie's on the level.

Listen to the Interview.  Lenny Organ, through his broker pestered CEF for months to get access to actually see the gold he and Harvey owned.  Eventually they showed him, in the company of his broker, the vault described above.   

You'd have thought that CEF would know which vault Lenny's gold was in.  You must also consider the Hong Kong sourced delivery above.  Why do that if they have 67m ounces to hand in their own vault.

truont's picture

No, the Organs did not pester CEF.

They had their private gold from the COMEX transferred to the only physical metal vault in Canada:  ScotiaMocatta's vault at 40 King Street West in Toronto.

CEF is in the clear for now.  ScotiaMocatta is not.

Crime of the Century's picture

I have some Scotia ozt bars, and it bothered me when I received them that they are not serialized. Oh, the assay card has a number inside the plastic case, but they didn't bother to etch it on the bar itself. Pamp and Heraeus do, so I am concerned that Scotia had Valcambi forgo that step. Why?

http://www.apmex.com/Product/53540/1_oz_Gold_Bars_9999_Fine__from_Scotia...

weinerdog43's picture

I'm also with Lionhead.  CEF is certainly not GLD. 

Lux Fiat's picture

Unlike GLD, CEF has regular audits of its holdings.  However, when the story from Rob Kirby about tungsten bars broke, along with concerns about the Canadian Mint having issues with melting "gold" bars, I ditched my CEF.  They may have all the silver and gold bars as claimed, but unless each one has been assayed to rule out tungsten cores, etc., there is a chance that all that glitters is not solid gold and silver.  It's a chance I wasn't willing to take.

lucky 81's picture

Embry of sprott did a walk through and inventory as a director of cef's bullion a few months ago as required by their officers and he laughed at the question when asked ,'is it all there'. he said yes.

dark pools of soros's picture

no, they just had to dig that deep to keep it away from JPM.. so it is technically closer to  Hong Kong

DosZap's picture

Ah!..................I feel so much better.

Instead of STORING it in a Demoratic/Socialist institution, it's kept in a RED CHINESE Vault?.What's the likelihood of (if the SHTF), of your having a snowballs chance at getting it from Hong Kong?.

ZERO..........

This stinks to high heaven.