"This Could Be Huge": Gold Bar Certified By Royal Canadian Mint Exposed As Fake

The last time there was a widespread physical gold counterfeiting scare was in the summer of 2012 when as we reported the discovery of a single 10 oz Tungsten-filled gold bar in Manhattan's jewelry district led to a panic among the dealer community, which then resulted in local jewelry outlets discovering at least ten more fake 10-ounce "gold bars" filled with Tungsten. Fast forward to today when a similar instance of gold counterfeiting has been discovered, this time in Canada, and where the fake bar in question had been "certified" by the highest possible authority.

According to CBC, the Royal Canadian Mint is investigating how a sealed, "pure gold" wafer with proper mint stampings has emerged as a fake. According to the Canadian press, the one-ounce gold piece, which was supposed to be 99.99% pure, was purchased by an Ottawa jeweller on Oct. 18 at a Royal Bank of Canada branch. The problem emerged when tests of the bar showed it may contain no gold at all. And, when neither the mint nor RBC would take the bar back, jeweler Samuel Tang contacted CBC news.


Joy Creations owner Samuel Tang contacted CBC News when neither RBC nor the

mint would take back the one-ounce gold piece he'd purchased

"Who is going to make sure those [gold wafers] are real?" asked Tang. "I am worried there are more of those [gold wafers] out there, and no one knows."

Following the news, RBC felt an obligation to pick up the bar and returned it to the mint for testing, refunding Tang the $1,680 purchase price.

The Royal Canadian Mint said in a statement to CBC it is in process of testing the bar, "although the appearance of the wafer and its packaging already suggests that it is not a genuine Royal Canadian Mint product." 


Samuel Tang purchased what he thought was a one-ounce bar of 99.9999%

pure, Royal Canadian Mint gold from a Royal Bank branch

Questions about the fake bar's origins aside, a more immediate concerns is that, just like in 2012, if there is one fake bar, there are likely many more. William Rentz, a professor at the University of Ottawa's Telfer School of Management and an expert on investments and equity, says the discovery is "troubling."

"A currency counterfeiter doesn't make just one fake $50 bill," he said. "They make a whole lot of them. So I would suspect this might just be the tip of the iceberg."

While the RCMP said they are aware of the incident, no formal complaint has yet been made.

* * *

As CBC details, the mystery of the fake gold began on Oct. 18, when Tang purchased what he thought was a 99.99% pure gold wafer from an RBC branch just across the road from his Glebe-area boutique, Joy Creations.

He carried the business-card-sized bar, still sealed in its Royal Canadian Mint blister-pack, back to his shop. 

 

His goldsmith, Dennis Barnard, said he cut open the plastic mint packing and placed the one-ounce wafer in a hand-cranked jeweller's tableting mill.

 

"I thought my age was catching up with me — because it was so hard to roll," said Barnard

Once doubts emerged about the integrity of the gold bar, Barnard tried bending the wafer, as pure gold is usually pliable and can be bent easily. Instead, the goldsmith said the wafer snapped, leaving a jagged line.


Goldsmith Dennis Barnard subjected the bar to an acid test after he found

he wasn't strong enough to roll the metal flat in his jewellers' mill

"That's when I started realizing something is amiss," said Barnard, who then proceeded to test the gold himself, using an acid testing kit. In an acid test, the jeweller rubs a streak of the metal across an abrasive test stone. Then, a drop of pre-mixed acid is added to the center of the streak.

If the metal streak changes colour or disappears, then the metal is less than the karat of the test acid. Gold of 99% purity is considered to be equal to 24-karat gold. But the bar from RBC failed a test that gold of 18-karat or higher purity would pass.


A metal streak from a counterfeit gold bar, right, dissolved in acid, failing a test of purity

That's when Tang contacted RBC.

"This could be huge. There could be quite a few people out there who've been rolled over," said Barnard.

The news turned from bad to worse when CBC took the same bar to Ernest Marbar, owner of the Gold Lobby, an Ottawa buyer of precious metals. Marbar also found the bar failed an acid test for 14-karat gold. His conclusion: "The bar that came from that package is a piece of junk" the gold expert said, adding that the "million-dollar question" is "how it ended up in that plastic case."


Ernest Marbar, owner of the Gold Lobby, an Ottawa buyer of precious metals,
dismissed the wafer as 'a piece of junk

Back at Joy Creations, goldsmith Barnard said his concern wasn't with goldsmiths being duped, it's with end buyers of the product who assume the purity and quality of the mint-endorsed purchases are sacrosanct: he and Tang are worried the bogus gold could be widely distributed and difficult to find, since most buyers are investors and leave the metal in the mint's blister-packed cases.

"Who's going to run around and open their packages, which are sealed by the mint?" asked Barnard. It's a concern echoed by professor Rentz: "It's a serious problem. If the trust disappears, it could be seize up the market, at least temporarily."

Ultimately, the onus is on the those who endorsed the fake product - the mint. Rentz said the mint would be motivated to get to the bottom of this case, since the discovery of a counterfeit undermines confidence in their product.

Meanwhile, Tang said last Monday he spoke with the manager of the RBC branch where he purchased the bar. He said the manager was told by a mint dispatcher they were checking security footage, and trying to trace everyone involved in the handling of the bars.

Amusingly, if the swap turns out to be an inside job, it wouldn't be the first time. As we reported at the time, last September, 35-year-old Leston Lawrence was found guilty of smuggling C$180,000 worth of gold pucks, each the size of a small muffin, in his rectum over several months.  Lawrence worked at the mint from July 2008 until March 2015. The punchline: his job included purifying gold...

Comments

Haus-Targaryen tmosley Mon, 10/30/2017 - 14:10 Permalink

I guarantee you the strike is different from the real thing. Counterfeits have improved, but you hold this up next to the real deal and it would be painfully obvious almost instantly. These will pass for people selling them on Craigslist to mouth-breathers for cash -- try bringing that to a bullion shop and you leave in cuffs. 

In reply to by tmosley

38BWD22 BaBaBouy Mon, 10/30/2017 - 14:51 Permalink

  Specifications for the American Gold Eagles are easy to find.  So in the case of Eagles, it is pretty easy for alomost anyone to test if they are genuine.  You need:-- a balance ($20 or so for cheap Chinese)-- either a mint tube (20 Eagles fit right in there) to test outer diameter or calipers-- a quarter (to test to see if coin "rings", tungsten will not.-- a magnifying glass (to look at detail, real Eagles show detailsThat's all you need! 

In reply to by BaBaBouy

wise_owl_says... SafelyGraze Mon, 10/30/2017 - 18:47 Permalink

coincidentally, canadian .gov allows chinese 'investors' buy up huge swaths of real estate in hopes of producing housing bubble driving up outrageous taxes on same.a disgruntled and aware chinese-canadian buisness man receives first year tax bill, realizing he was screwed, has fake alibaba gold bullion selling relative back in mother land make a 'high quality' copy. then returns it to mint. christian cross wearing 'honest' chinese buisnessman gets MSM covereage on same. PLEASE, DONT SELL YOUR GOLD AND SILVER TO JAIME DIMON due to this PSYOP HELL FIRE SALE PRICE. you hold most precious asset on face of earth. do not cast pearls before swine.

In reply to by SafelyGraze

Manthong DeadFred Tue, 10/31/2017 - 05:18 Permalink

  I bought a Gold Eagle from a black guy outside the Metra Station in downtown Chicago… He said it had a $50.00 face value, but  was worth way more, but he would take $45.00 for it… cash only… Great deal. I would have purchased one of the gold Rolex Presidents he had on his sleeve under his coat, with the click sweep seconds hands but I did not have the $75.00 in cash left that he wanted. I think he will be back there next week   Maybe I can get that good deal then.   …God, I love this shit    lololololo   

In reply to by DeadFred

Endgame Napoleon Escrava Isaura Mon, 10/30/2017 - 16:54 Permalink

Those expert goldsmiths saved the day for whoever bought the jewelry made with that fake gold. Maybe, they could hire more humans to test the gold bars to protect investors. Oh no, they won’t do that, and even if they do, they will have to be visa hires with access to welfare and child tax credits for reproduction. They would not want to pay citizens enough to live on. Bad for business.

In reply to by Escrava Isaura

buyingsterling Endgame Napoleon Mon, 10/30/2017 - 17:36 Permalink

I've had one of these fake RCM bars in my possession. Perth mint fakes are even more common. My guess is that they come from China.Why they don't make them from Tungsten is beyond me, as it is the fakes are very easy to spot, they're about 60% thicker than they should be. The web has exact specs on all of these bars, all you have to do is compare them. But the fakes are so prevalent online (at least outside of reputable sellers such as Apmex and Gainesville) that I don't buy them, regardless of price/return options. It's a waste of time. And it's getting worse. If you own Perth or RCM 1 oz bars sealed in plastic they should all be XRF scanned at a reputable refinery, then the good ones should be melted down and sold/traded; the aftermarket for them is damaged, likely beyond repair.

In reply to by Endgame Napoleon