Gold dealer gone bad
Published on February 10, 2012
You have to be very careful when choosing who you do business with. You are being shown so much hype and advertising that you don’t really know who you are dealing with anymore.
As a buyer of bullion, you should check out your bullion dealer before you swap your cash for gold because not all bullion dealers are the same – not all are as honest as us here at Bleyer Bullion
There are some scams and horror stories out there – here is one of the worst from New Zealand.
John Frazer had inherited more than NZ$ 340,000 from his grandmother and quite wisely, has invested it with a gold bullion trader. Not us, I hasten to add... Now he’s being told by the companies owner that he won't be getting either the gold or his money back.
How could this happen? A dealer in downtown Auckland has advertised heavily on national television and radio – it even calls itself "New Zealand's trusted name in bullion trading". And the director of the company is blaming a member of staff (that’s Elijah Geldman and his picture is at the top) who has since ‘left the company’ so it’s been reported to the NZ Serious Fraud Office but lets face it, it’s gone. And it gets worse.
A woman from Christchurch, and her children, invested NZ$ 341,700 in leveraged options with the same firm. They thought it was safe so they bought gold and borrowed against that investment to buy more, hoping the profits from its sale would be more than the interest payable. Oops!
Not to be outdone, John Fraser also ordered NZ$ 85,000 worth of physical silver from the same company and is still waiting for it to arrive. You get to a point where you get worried so a few phone calls later, Mr Kairua, the Company Director, assured him that “they would be getting most of their money today and the rest within 72 hours. Then he said to me he'd send me a tracking number on my email for the silver bullion by 10 o'clock morning.” Well that all sounds fine and dandy but by 1 o'clock, when it didn’t show up, he phoned his office and said, “I'm extremely disappointed. I don't believe you're going to send it to me”.
And what was the reply? “I have some bad news for you...”'
Apparently Mr Kairua said that "the money was being held in a vault in Europe and it was backed by Lloyds of London as an insurer and now he's told me that Elijah Geldman has gone and folded all this money somewhere else."
Elijah Geldman resigned last September after Herald revelations that he was wanted for fraud by US federal authorities.
He and another man were accused of "participating in a conspiracy", including forging signatures and falsely identifying themselves as a securities broker and a "comptroller of a legitimate company" to entice investors to give them money.
Mike O'Kane from the New Zealand Mint said “"The golden rule is 'he who holds the gold, holds the value'". He suggests "If you're not taking possession of it, then you need to do some homework on the company you're buying it through."
So when looking at buying gold, make sure that you are taking physical delivery. If your gold is being held in storage then maybe you should do your homework before you part with your hard earned cash because you might just be getting some scraps of paper when in fact, you should be getting the gold.
Call us on 01769 618618 for current prices and availability. Take control of your finances, get out of paper and into the safe havens of Gold and Silver – the only real money out there.
Follow us on Twitter, Facebook and Youtube for up to date analysis and education.
Disclaimer – I am a Bullion Merchant. I do this for a living. To keep in line with the FSA, what is written here is for your education and should not be taken as ‘advice’. If you act then take some responsibility for your actions. All and everything that is written by David Peers and/or published by Bleyer LLP is subject to copyright.
Source - http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10750391