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Gold Counterfeiting Goes Viral: 10 Tungsten-Filled Gold Bars Are Discovered In Manhattan
A few days ago, our report on the discovery of a single 10 oz Tungsten-filled gold bar in Manhattan's jewelry district promptly went viral, as it meant that a tungsten-based, gold-counterfeiting operation, previously isolated solely to the UK and Europe, had crossed the Atlantic. The good news was that the counterfeiting case was isolated to just one 10 oz bar. This morning, the NYPost reports that as had been expected, in the aftermath of the realization that the sanctity of the gold inventory on 47th Street just off Fifth Avenue has been polluted, and dealers promptly check the purity of their gold, at least ten more fake 10-ounce "gold bars" filled with Tungsten has been discovered.
The Post has learned as many as 10 fake gold bars — made up mostly of relatively worthless tungsten — were sold recently to unsuspecting dealers in Manhattan’s Midtown Diamond District.
The 10-oz. gold bars are hugely popular with Main Street investors, and it is not known how many of the fake gold bars were sold to dealers — or if any fake bars were purchased by the public.
As is to be expected, the Post story is weak on details: after all, any dealer who admits to having allowed Tungsten to enter his or her inventory can kiss their retail business goodbye, as customers will avoid said Tungsten outlet like the plague, for the simple reason that suddenly counterparty risk has migrated from Wall Street to the Diamond District. The one named dealer is the same one who already made an appearance in the previous story on Tungsten in gold's clothing.
One gold dealer discovered that four of the 3-inch-by-1-inch gold bars he bought — worth about $72,000 retail — were counterfeit.
“It has the entire street on edge,” said Ibrahim Fadl, 62, who has been the owner of Express Metal Refining, a Midtown gold-refinery business, for the last 11 years. “I and the others on the street work off of trust; now that trust is strained.”
Fadl, a Columbia University graduate with a master’s degree in chemical engineering, and who has more than 40 years in the industry, purchased the four fake bars from a well-known Russian salesman with whom he has done business.
Ah yes, those pesky Russians: always happy to do the Fed's bidding, because who really gains from the loss of confidence in physical gold?
Fadl became suspicious when he offered the salesman a deep discount for the investment-grade gold bars and he quickly accepted it, a source tells The Post.
Fadl said he did his due diligence “by X-raying the bars to ascertain the purity of the gold and weighing the bars, and the Swiss markings were perfect.”
Tungsten is an industrial metal that weighs nearly the same as gold but costs a little over $1 an ounce. Gold closed Friday at $1,774.80 an ounce.
We wish Fadl all the best in his liquidation sale. Others, for logical reasons, are far less willing to step forward:
A second 47th Street refiner, who wished to remain anonymous, said he was burned recently when he bought six gold bars that turned out to be mostly tungsten, with just a gold veneer. He would not comment, though, on who sold him the bogus bars.
The counterfeiting so far appears to have impacted solely PAMP (Produits Artistiques Métaux Précieux ) gold bars, madeby MTB, whose CEO can hardly be too happy that some "Russian" has made it a life mission to destroy the credibility of any gold stamped with the PAMP stamp.
Raymond Nassim, CEO of Manfra, Tordell & Brookes, the American arm of the Swiss firm that created the original gold bars — with their serial number and purity rating stamped clearly into them — said he reported the situation to the US Secret Service, whose jurisdiction covers the counterfeiting of gold bars.
He said his company “is supporting and cooperating with authorities any way we can.”
Nassim thought the culprit must be a professionally trained jeweler to have pulled off the caper.
“The forger had to slice the original bar along the side, hollow out the gold and insert the tungsten ingot, and then reseal and polish the bar, Nassim said.
The case of gold counterfeiting has already taken NYC by storm:
At an industry dinner Thursday night hosted by Comex, the New York-based metals exchange, the room was abuzz with talk about the bogus gold bars, according to Fadl.
Which was also to be expected. What is also to be expected is that as more and more stories of Tungsten making it into broader gold circulation, that retail sales of physical gold will certainly be impaired as end consumers become far more cautious about what they buy.
And while we await more information, especially from the Secret Service, who is "on top" of this case, which we assume implies that gold is after all money, we leave readers with our conclusion from Tuesday: "with false flags rampant these days, we would not be surprised if this is merely yet another attempt to discredit gold, this time physical, as an undilutable medium of warehousing wealth. So buyer beware: in a time when everyone is broke, triple check before exchanging one store of wealth for another."
For those curious what a fake 10oz bar looks like, here it is again:
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Tuesday is options expiry on the October Gold/Silver contracts. Also end of 3rd quarter.
They have to keep you out of the next price downdraft which more than likely starts tomorrow
Diversify! Invest in Platinum, Silver, Gold AND GUNS and BULLETS.
It must be one hell of a drill but to drill tungsten. I'm calling BS.
A standard coated-carbide bit obtained at LOWE's will drill Tungsten. Works best on a slow speed. Just sayin'.
Do you drill tungsten often, I think you are the first person that I have ever heard mention it?
Just askin....
tungsten is not tungsten carbide.
When a news story comes out that sounds a little bit suspect, do the following:
Why are they telling me this?
Who is telling me this?
They are telling me this because they want me to question the person I buy gold from. This tungsten gold story is to scare both buyers and sellers. The buyers want to be sure that they are getting the real deal (dealers). When it's not possible to be there for the testing, the next best thing will be to require documentation/proof of purchase. All of a sudden we will need a lot more paperwork when buying and selling gold. A lot more identification, transaction history etc.
It is most likely .gov telling us this, they want us to want to have more documentation when buying/selling gold. They want to know who is buying gold and who is selling gold. They want to be able to track where it is going (i.e. to China?).
Now watch us, the sheep, demand to give paperwork and receive paperwork for gold, and willingly provide it to .gov. The reason gold works so well is there is not much tracking. I can swap paper for gold. Now I will have to swap paper with documents for gold with documents.
So next time a suspect 'news' story appears, just ask the questions. Why and who is telling me this...
Real eyes realize real lies.
Who cares about paper trails?
General Electric, Philips, Oxford instruments just found new markets for their kit. The financial sector!
Damn I better go check out who makes what.
So you don't care who knows that you have gold?
When laws are put in place again to give up your gold, enjoy.
Yeah, they confiscated all gold buillon in the 1930's.
By the time it's over, they will call that the "lesser depression".
Top quality gold bars, mined, smelted, weighed and marketed courtesy of J.P. Morgan....
Bank of Dimon/Madoff bitchez...
Bank demons have made off with your bitchiz.
1/10 Oz. Gold American eagles will be hard to tamper with. These filthy heathens behind these heinous crimes must be found and killed however. There are benefits to the smaller minted coins. The tube of 50 1/10 coins is a very compact way to carry 5 Oz. of beautiful gold. The coin tube from the mint measures 3 1/8" x 7/8". The sharp edges of the bottom and top of the tube can be rounded and smoothed making the tube of coins comfortable when secreted in my rectum. I have a few different forms of gold and silver, but these small coins from the mint are my favorite.
IN YOUR RECTUM????? How you going to keep the gold IN your ass??? Hahahahahahahahahahahaha....
It's a very astute question. I had the same concerns. I ran some drills to determine whether the tube would remain in my ass under pressure. I set up an imaginary checkpoint on the back forty and practiced running from the checkpoint in a serpentine pattern while shooting blindly over my shoulder back toward the imaginary checkpoint. in trials where i flailed my arms and jumped up and down while evading the checkpoint thugs, almost every time the 5 Oz. tube of beautiful gold dislodged itself from my ass. I will now tuck my slacks into my cowboy boots to prevent the loss of my gold while being pursued.
Possibly the funniest post this year.
Gold being loaned out probably close to 100X the actual physical amount would put it at over $170,000 an ounce! The truth is always stranger than fiction.
This story provides a much needed reaity check.
Once again technology empowers the people by providing a cost effective solution. As mentioned earlier on this thread $150 For a UTG seems like a no brainer.
The free market in PMs will skip around this obstacle and emerge much stronger for the experience in very short order.
EDIT in the mean time it looks as if its the good old monday morning smack down time, sale will be starting again soon.
(What nice timing this story exhibited, being on a sunday after an intermediate top and all)
Just coincidence I guess....
Got to do a smackdown...sheeple might get restless.
Got to do a smackdown...sheeple might get restless.
Thoughts: It is not a "Fed" conspiracy to create a "loss of confidence" in gold. Moronic. With gold at $1700+ an ounce, the profit incentive for fraud is high (probably 15k per 10 oz bar). Currency notes are counterfeited for the exact same reason. No conspiracy needed to explain it.
As a gold buyer, this is precisely why I have stayed away from anything other than 1 oz or smaller coins. The only downside to coins are the slightly higher premiums per oz. With coins you get a reeded edge, making hollowing out the center much more difficult and time consuming (10 times the work for the same gain as a 10 oz bar). With coins you get greater divisibity, and the coins are every bit as compact for storage purposes. Eagles, Maple leafs, K-rands, Philharmonics, kangaroos...all coined by sovereign goverments in smaller units much more difficult to counterfeit.
This development will probably make gold bars much more difficult to sell (probably impossible on Ebay) and gold coins much more desireable.
We're saying this not because there's no incentive for fraud -- it's because the incentive for fraud is so high, and has been for so long, that the dealer would have to be beyond incompetent to not be testing his bars at purchase. So the story makes no sense. The fact that the story has been picked up by major media outlets is also a bit of a flag.
As I ponder this, I'm inclined to not think it's a big conspiracy -- instead, I think it's more likely it's a small one -- a scam that the dealer himself might be in on. One possibility is he's insured for such things, another is that he's selling the bogus bars himself to unsuspecting gold buyers, might have been caught by one that tested after the fact, and then "sounds the alarm" on his bogus stock.
The story just doesn't pass the smell test -- either the dealer is incomprehensibly incompetent, some critical details or missing, or he's a fraud himself.
Obvious false flag to keep the sheeple away from the gold/silver market.
Like I've said b4, the clusterfuck will ratchet up when some entity checks their tier one collateral gold and finds it mostly bogus, thus nullifying all the contracts built upon that collateral. The degree of chaos will ratchet up a couple of magnitudes. The whole system is built upon false bottoms and flimflamery.
Trust no one. Stick with 10 oz silver bars and 1oz rounds, in your possesion of course. which is basically telling TPTB oligarchy to "Fuck Off"...!
I disagree with "Nassim, CEO of Manfra, Tordell & Brookes" - who says these are bars that have been hollowed out - i.e. that these are modified bars.
My background is as a design engineer (the hands-on kind, not the Powerpoint kind) - also with a background in jewelry manufacturing, including gold and silver. Manufacturing processes are my cup of tea.
To me this looks like the result of a professional manufacturing operation. i.e. that someone has invested in stamping dies and/or molds. Also that they may be using a technique called "mold-in-place" - where an insert, tungsten in this case, is placed in the mold, and the gold is poured around it.
Beyond a certain production volume, making new counterfeit bars that are of high quality (hate to use that word to describe counterfeits, but anyway) is easier than modifying existing bars.
Consider the hollowed out shell of a genuine gold bar, machined to facilitate the placement of a tungsten insert. In order to machine something, it has to be held TIGHT in a vise. It's not possible to hold a hollowed out gold bar tightly in a vise.
My guess is, somebody has made the investment in equipment and is recoup-ing a gross profit of about 9 ounces of gold ($16,000+) on each 10 ounce bar, minus a per-unit fabrication cost of about $1000. I don't think they would go to that trouble unless they were making hundreds of bars.
This is just not the kind of manufacturing operation that lends itself to a "onesy-twosy" (low-volume) operation.
You might crush the hollow gold bar if you clamp it directly in a vise, but if you first glued it to a block of steel with JB Weld, or auto body putty, one could conceivably mill out the front of one bar, and the back of another, to form one finished unit. Heat could remove the adhesives, but if pure, oxidation would not present any telltale evidence.
I wonder if they tig welded the seams?
Kerrching! You are spelling out the fraud in plain words. Well said.
So, what motivated the NYC shysters to admit their problem and whine about it, given that more than a few of them have been stung, and they know it. Are they trying to minimise the damage, claim to be victims, retain their ill gained profits...and pass off the loss to others?
Your expose of the moulding process which requires a relatively small outlay for maximum profit does fit well with these pictures on ZH, and the common sense interpretation.
The words 'insider trading' and double dealing come to mind...
Also, dealing in stolen goods may be the common practise of these NYC shysters. After all, a criminal always chooses their 'mark'.
You cannot cheat an honest man, but you can conspire with a crook, especially the import/export crowd.
Sounds like a new form of "Jewish lightening." Not only is the gold gone, but insurers will have to pony up $$$ to cover the fraud.
After reading this story I pulled out my wallet and began cutting my $20, $10 and $1 dollar bills open. Guess what I found inside... PAPER! Now what are we going to do? We're fucked!
What, no RFID taggs?
I cover my physical gold with tungsten, and then again with gold leaf, so that when the fed confiscates all gold I can claim that I got ripped off.
It's a great way to offset capital gains to boot.
Ginsengbull,
It's easier to buy a boat, and have an unfortunate accident - that's ZH tradition ;-)
Ta for the update, Tylers. You stick to your advice for genuine buyers to check 3 times, quite right, and I stick to my comment on the first story: 'People who want something for cheap...do cheat.'
I have no sympathy for this crook shyster who now squirms with words that he offered ' a deep discount'. His seller is traceable. I hope they both go to jail (unlikely).
The consensus on ZH seems to be that the complainers are lying, for one reason or another, and got took by those they hope to take. Boo hoo. Or this is a crude attempt to frighten people off buying gold.
Your good Dr. commenter put it succinctly:
'These dealers have probably bought the bars at a deep discount from people they knew to be shady, with the expectation that the bars were hot. And they got burnt.
Look at the last time this scam was attempted large scale: The counterfeiters claimed the bars were part of a bank robbery when they tried to sell them at a deep discount to gold traders.'
Bingo! They guy was fencing for less than face and deserves what he got.
+1
And if I may add, it is telling how a person discovered to sells one fake gold bar instantly goes out of business while the Wall Street thieves miraculously thrive thanks to their crime.
Which money is honest money?
Things that make me go hmmmm...
If it is true that gold is gradually being re-introduced to the world monetary system (see the BIS upgrading it to Tier 1 recently, eg), then it's vital to ensure the integrity of gold.
Job number one: get rid of the scammers and thieves; flush them out.
Just wondering. And how ironic that paper counterfeiters might use other forms of counterfeit to restore some honesty to gold as part of the new global monetary system to come, if that is the case.
Crikey! Goldfinger lives! 007 and .999 :-)
These tungsten bars probably came from Fort Knox. Just saying.
No, those have a coppery lustre.
W...
These tungsten bars come from a crime syndicate, and China produces tungsten coated in gold. See the links above.
Tungsten is a VERY hard metal and difficult to drill. Which makes me suspicious of the photos showing the drill making quite a dent in the tungsten.
Aside from that, if I was going to test some bars, I would't use a huge drill bit like they have. Just use a very small one. Gold is very soft and it will be obvious very quickly if you've suddenly hit tungsten. It would also limit the amount of gold you've shaved off the bar.
A 1mm drill hole drilled right through a bar is going to reduce the weight of the bar by a LOT LESS than a 5mm hole, and 1mm is all you need to test for tungsten.
All their tungsten are belong to you.
TheFourthStooge-ing Vote up!6
Vote down! 0
zoggl said:
From the page above: "Here we declare: Please do not use our gold-plated tungsten alloy bar and tungsten alloy golden bar for any illegal purpose."
...and from the above page: "Chinatungsten Online (Xiamen) Manu.&Sales Corp. is a very professional and serious company, specializing in manufacturing and selling tungsten related products for more than two decades. Our gold-plated tungsten alloy products are only for souvenir and decoration purpose."
Some more selected comedy:
"Detecting a high-quality tungsten fake gold bar would be extremely difficult. It would likely require significant and material alterations to the bar being tested and this would negatively affect the marketability if its hallmark veracity were vindicated. Some applications require the tungsten to be fake gold. The main reasons for tungsten fake gold bar are to protect the wire from corrosion or to solder it to other metals."
"Also tungsten fake gold saves the energy and poses no pollution threat to the environment and thus to achieve a sustainable development."
(both from http://www.tungsten-alloy.com/tungsten-alloy-fake-gold-bar.html )
"Owning to its excellent properties of tungsten such as high density with small volume, high melting point, excellent hardness, superior wearing resistance, high ultimate tensile strength, high ductility, tungsten fake gold product always be used such as darts, golf club, fishing weight, ballast in yacht, racing car, and aircraft; Also because of its properties like high temperature resistance, low vapor pressure, nuisance free, non-toxic and environmental friendly, good corrosion resistance, wonderful shock resistance, tungsten fake gold products can also used as heat sinks, crankshaft, counterweight in oil drill, mine exploitation and so on."
(from http://www.tungsten-alloy.com/tungsten-alloy-fake-gold.html )
Got to love the information at those links.
How to Make Gold-plated Tungsten Alloy Bar?
Start with a tungsten alloy about 1/8-inch smaller in each dimension than the tungsten alloy golden bar you want, then cast a 1/16-inch layer of real pure gold all around it. This product would feel right in the hand, and tungsten alloy golden bar would have a dead ring when knocked as gold should. Gold-plated tungsten alloy bar would test right chemically, weigh exactly the right amount, and also pass an x-ray fluorescence scan, the 1/16" layer of pure gold being enough to stop the x-rays from reaching any tungsten.
We can offer tungsten alloy golden bar and gold-plated tungsten bar according to the different requirement, and also we can engrave as per your fond, such as your company logo, your name, some words, letters, etc.
Psy-ops, period.
Note: some quick eyed people on the net noticed that there were more than 1 bars effected from the 1st news article. They looked at the final serial number digit and they are different. Assuming the first untested version 039388 is fake as well.
2nd torn open bar is: 038892
Everyone should check their shit: Ag, Au, Platinum....
Do NOT underestimate the creativity of criminals concerning PM fraudulation in any quantity or shape!
Same as the banks.
Only difference is the Banksters back up their frauds with guns and badges.
IMPENDING CORRECTION:
Due to recent central bank intervention and short covering spikes, these daily charts are extremely overextended and significant correction expected very soon:
SPX, DOW, NASDAQ, NZDUSD, GBPUSD, AUDUSD, COPPER, CRUDE, GOLD, SILVER. [USD strength will return]
http://www.zerohedge.com/news/2012-12-24/market-analysis
http://trader618.com
The quality of the counterfeit bars are just too good. The attributed and anonymous reports indicate that the quantity of counterfeit bars being found is quickly growing. I predict that the discovery of counterfeit coins is next.
The latest reports only serve to strengthen the conclusion I stated when the article about the first counterfeit bar was reported on ZeroHedge.
This is undoubtedly a massive state sponsored counterfeiting operation. I can only make an informed guess regarding which nation state might be behind this operation. It has probably been in high-volume counterfeit production for at least a year. Their production line's entire throughput is probably devoted to producing counterfeits of all of the world's major mints, including their own country to deflect suspicion. A state-owned commercial printer devotied to printing counterfeit paperwork and packaging must also be involved.
Some mints can produce 100's of tonnes of finished gold bars and coins per year! This may be alarmist and discounted as the ravings of a lunatic. But how many reading this can afford to own even one counterfeit 10-troy ounce gold bar? Or one counterfeit Canadian Maple Leaf, Kruger Rand or American Double Eagle?
There is no way that I would hold any paper in a precious metals ETF - whether silver or gold or platinum or palladium, etc. This may be a gold-only operation. But why take the chance? The implication of even one gold ETF participating in this operation would cause a massive loss of confidence in all precious metals ETFs and provoke a massive rush for the exit. I would expect a concurrent massive spike in precious metal coin prices.
I would be surprised if there were not at least one gold ETF intimately involved in this operation. Where else are they getting so much gold?
As for silver: Eric Sprott has stated, between his own operations and the operations of seven highly trusted competitors with whom he is closely associated, that there is no significant supply source for the "other" silver ETFs to obtain silver.
I have to admit that I admire audacity and professionalism of the counterfeiting operation. I especially the beauty it offers for money laundering.
The people investing in PM ETFs have a completely different mindset than the physical buyer. They are not interested in taking delivery and never will be. If there is ever a "run" on Gold/Silver ETFs.. they will be settled in cash via a government bailout.
As a practical matter the safest and most practical PM investment is likely to be simple bag silver. These are older, no collector value US silver coins, composed of 90% silver, sold solely by weight.
The randomness of date issue, physical appearance, low value per unit etc. make counterfeiting difficult and not worth the hassle. At the same time the coins are universally recognized as US issue and come in sufficiently low denominations that in case of TEOTWAWKI can easily be used in transactions......unlike gold coins (and certainly bars) whose value would dwarf most practical transaction size requirements. Silver has been trading for sometime at a floor around $27-28 then spiking up through market manipulation into the $30's only to fall back to the floor. Numerous "bag silver" sellers will lock in a price at the time of order although in nearly every case you wind up waiting 60-90 days for delivery regardless of what they say about 30 day delivery.
Looking at pricing trends over the years on sights like Kitco's you can identify the dips and buy at the low end, ride it up and wait for the next dip. The silver market is full on manipulated to the benefit of the largest traders like any other asset trading arena, but you can avoid getting smurfed by following the oz. pricing and buying not at perfect bottom but close enough to benefit riding the coat tails of the largest market makers.
As a practical matter the safest and most practical PM investment is likely to be simple bag silver. These are older, no collector value US silver coins, composed of 90% silver, sold solely by weight.
The randomness of date issue, physical appearance, low value per unit etc. make counterfeiting difficult and not worth the hassle. At the same time the coins are universally recognized as US issue and come in sufficiently low denominations that in case of TEOTWAWKI can easily be used in transactions......unlike gold coins (and certainly bars) whose value would dwarf most practical transaction size requirements. Silver has been trading for sometime at a floor around $27-28 then spiking up through market manipulation into the $30's only to fall back to the floor. Numerous "bag silver" sellers will lock in a price at the time of order although in nearly every case you wind up waiting 60-90 days for delivery regardless of what they say about 30 day delivery.
Looking at pricing trends over the years on sights like Kitco's you can identify the dips and buy at the low end, ride it up and wait for the next dip. The silver market is full on manipulated to the benefit of the largest traders like any other asset trading arena, but you can avoid getting smurfed by following the oz. pricing and buying not at perfect bottom but close enough to benefit riding the coat tails of the largest market makers.
Who benefits? Seems to me that UTG manufacturers certainly will, for one.
So the the Columbia University graduate with a master’s degree in chemical engineering, and who has more than 40 years in the industry thought it was suspicous but purchased four or five 10 oz bars of gold anyway.
Come on!!!! Who's buying this?
If anyone here thought something fishy was up with bars they are about to purchase, they would run away as fast as they can but this CU graduate with a masters degree in chemical engineering who has been dealing in PMs for 40 years bought the fishy gold bars anyway.
This stuff is written for 12 years olds.
I just called Gainesville Coins and they evidently drill and melt down 100 gram, 10oz, and 1 kilo gold bars. They only offer 95% of melt value.
They're still offering spot for 1 oz gold bars though. They're only $26.99 over spot to buy - http://bit.ly/SqgH5N. Guess its not worth it to put a Tungsten plug in a 1 oz bar.
They used to buy 100 gram and 10 oz bars for spot and 98% for the 1 kilo gold bars.
Why am I not surprised that it was a Russian seller.
Why am I not surprised that it was a Russian seller.
My $ is on it was Chinese.U can buy the coins online now.
Why the Feds would allow shit like this to even be sold here, is insane.( WE all know how big a thieves and copcats bstds the Chinese are, on everything.)
The story of the "hollowing out" does not match with the pictures of what is a very thin gold-veneer.