Oh no! I've just been scammed into buying fake silver bullion

So we've all heard about how Craigslist is full of scammers.  People using fake cashier checks and money orders, and the banks holding you the seller responsible after the items are long gone.  Being asked to wire funds via Western Union or MoneyGram have also been popular, because once it’s sent there’s very little you can do to get it back.  Even PayPal is now a common method for con-artists to scam honest folk out of their money and or goods.

Click to see a video of the Fake Bullion

Whenever I tell people that I have used Craigslist to buy stuff.  I often hear them say, “That’s really sketchy”, “That website is just a bunch of scammers and creeps” and “I’d never use it to buy anything valuable”.  Well up until last month, I would have said, “After 3 years of dealings with Craigslist sellers I have never had cause for concern with any of the people I bought from on Craigslist.”  This would include both face to face transactions and those that occurred through the mail.

“Oh no! I've just been scammed”

Friday 1/18/13

I was contacted by an anonymous craigslist email back on January 18^th.  A person in Massachusetts wanted to see if I was interested in buying around 150 ounces of silver bullion.  These were all 1 ounce .999 fine bars (Pan American, Stagecoach, Sunshine Mint).  These were housed in an individual hard plastic case and they all appeared to be in perfect condition.  He didn't leave a name but did leave a phone number I could reach him at.  The email came quite late that Friday but I responded in hopes that I might be the one to get this seemingly wonderful collection of silver bullion.  I didn't hear back from the seller that evening and figured I had missed the sale.

All of these silver bars in this picture are Fake Silver Bars,  Counterfeit Silver  Bullion.  

Saturday 1/19/13

Still no response from the seller.  So around noontime I tried the seller’s phone.  He picked up and we began to talk about the silver he was selling and pricing.  Now I’m by no means a major dealer, I try to offer a fair price for silver.  He responded very positively to my offer and said all other offers had been much lower than mine and that he would like to meet me today if possible.  We agreed to a time and place in Boston and that was it, I was off to meet this person to buy some silver bullion.  I brought the money and a digital scale. 

About an hour later I arrived at the meeting spot and found that he was not there yet.  So I texted him and saw a man get out of a red Lexus carrying a suitcase.  I figured it was him, and I was correct.  We chatted for a little and I learned that he had gone to school in the area and that he was going through some tough times.  He said he had bought these silver bars back when silver was around $13 an ounce, and needed the cash to help pay for things.  The bars were beautiful each in a hard plastic capsule and they were broken up into units of 42 and presented in vacuum sealed food storage plastic bags (that said made in Korea on the bag, as shown in the picture to the right).  

They were all lying flat so it looked very nice.  Each bar was hallmarked and the company stamps (stagecoach, Pan American, Sunshine Mint) all looked authentic.  So I decided not to break them out of the vacuum sealed bags let alone their individual capsules.  The amount turned out to be slightly less than 150 ounces and he reduced the asking price.  When I started to comment about this he immediately gave me a new lower price.  This at the time didn't strike me as odd or out of place.  He mentioned he had some other silver that he’d be interested in selling, some Morgan’s and peace dollars, and even a trade dollar. I asked if the trade dollar had any counter stamps on it.  And he said he didn't think so.  When he asked why I wanted to know this, I mentioned that these are a popular coin to make counterfeits of and that includes counterfeiting the graded slabs they are stored in.  The seller didn't really react to this, but we didn't do any other transactions that day and we went our separate ways.

Beautiful looking Counterfeit Silver Bullion Bars

Later that day

I now had just shy of 150 ounces of beautiful looking bullion to sell.  I started to go about contacting all the people that I knew would be interested in these bars.  And sales started to happen.  Pretty soon I was going to have confirmed the sale of all of these bars.  That’s when everything started to go wrong.  First I was called by a friend who wanted me to check and confirm the bars weren't magnetic.  That the description I was giving sounded a lot like other counterfeit silver bars being sold today.  I opened the bag and took out a couple of the bars.  Opened them out of their capsules and first weighed them.  The weights were all very close to 31.1g (~ 1 troy ounce); none were more than .5 grams under and more than .9 grams over.  After the weights seemed to be okay, I went on to see how these bars did with a magnet next to them.  The magnet wouldn't stick on the front or back of the bars.  But there was a faint attraction when I pulled the bar away from the magnet.

A close up look at the hard plastic capsules. 

I found that these bars showed the strongest attraction on the sides.  In some cases like with the Stagecoach and Pan American bars it was very, very weak, and the bars barely pulled my small magnet across a glass surface.  But in other cases like with the Sunshine Mint bars, the bar could actually pick the magnet up off the ground.

At this point my stomach was somewhere around my ankles and I was feeling like I wanted to pass out.  I had just become the victim of a scam through craigslist.  No longer was this just something I read about.  I was out a lot of money and I had no idea what I needed to do.  First thing I had to do was contact every person I've called over the afternoon and issue a refund and tell them the deal was off.  Most buyers were okay with this when I told them what had just happened to me.  Some weren't and went so far as to say they would not trust my services for future sales.  Which sucks but all I could do at that point was inform these would be buyers the truth and hope they would understand given the circumstances.

Close-up of a Counterfeit StageCoach Silver Bar

Sunday – Tuesday

I spent the next 3 days trying to get in touch with the person that sold me these counterfeit bars of silver.  All I had to go on was an anonymous email through craigslist, a first name and a cell phone number.  Luckily we were going to meet up the following week for the Morgan’s and trade dollar.  So I tried texting him about meeting that week, at which time I would get his license plate and forward it to the police.  Unfortunately he wasn't going to be able to meet me.  We exchanged numerous texts during this time period but each one ended with us not establishing a time and place to meet.

Wednesday

Close-up of a Counterfeit StageCoach Silver Bar

Now I’m really starting to get anxious.  But we have some luck when I say I’m going to the police unless you refund my money for these bars.  After I made that comment he agreed to meet me the following day and take all the Counterfeit bars back.

Thursday

I get a call just before we the arranged meeting time.  He tells me that his small credit union was going to close before he could get there to withdraw the money.  So we decide to push the meeting date to the following day.

Friday

Friday came around and I got a string of text messages from the seller telling me that his attorney has advised him not to meet with me, and that I would need to prove to them that the bars were his and that they weren’t real.  Well at this point I started asking for the name of his attorney and received no further information.  I felt I had exhausted all of my options and filed a police report.

Saturday – Monday

I thought I was stressed out over this matter a week ago.  Now I’m no closer to getting my money and it’s starting to sound like it’s never going to come back.  Let me tell you this is truly a horrible position to be in.

Tuesday

I was told to call the police department three days after the police report had been filed.  This was how long it took for the report to be issued to a detective.  So on Tuesday, this very friendly detective told me to forward him everything I had and he would take it from there.

Luckily I had not sat on my hands during the last 11 days.  Here is what I found on my own:

1. Searching Google for this person’s phone number.  I got a hit, someone else had criticized him for a bad transaction of some goods.  That hit provided me with a full name, the same phone number and a real email address.

2. I then searched the full name and found that person’s LinkedIn profile.  This hit confirmed the school, career and current town the seller lived in. He had told me all of this during our conversation we had had at the time of the sale.

3. 1-800-free-411 gave me this person’s street address and a home phone number (a different number from the one I had been texting over the last 2 weeks).

4. I forwarded the Car and model

5. Copied and forwarded all of the text message conversations

Within an hour of providing this information to the detective, he called me back telling me he had found this seller and wanted to see if I could meet at the station tomorrow to return the fake silver for my money.  I said yes and confirmed the meeting for Wednesday.

Wednesday (1/30/13) 12 days later

I am driving to the station, I’m about a half and hour ahead of the scheduled meet time, when the detective calls.  He informs me that the seller isn't going to show up.  On top of this the seller is telling the detective that I didn't pay or buy as much as I’m claiming.  Luckily the detective seemed to think this seller wasn't being honest.  I didn't have a bill of sales or other receipt for the transaction to prove my claims.

Another close-up of counterfeit silver bullion bars being sold in New England

I get to the station and for the next 2 hours I sit and wait as the detective and seller’s attorney have phone calls and eventually the attorney does show up.  He asks me to show him why I feel these bars were fakes.  I show him that they are all magnetic and with that the attorney pulls a large envelope from his inside jacket pocket which contains all of the money I had paid for these bars.  He takes the bars and I walk away with the money I had thought I was never coming back for the past 2 weeks.

---------------------------------------------------------------

Some disturbing points I later learned about this seller:

He has a criminal defense lawyer on payroll.

In 2012 this person successfully used fake bank checks at a local coin shop to buy coins, and also robbed that store of some merchandise at the same time.

That he had been arrested for these crimes and was released on bail.

I learned that a day after he returned the money back to me, he had posted another ad on Craigslist.  This time using a different name, email address and telephone he posted over $25,000 dollars worth of silver for sale.

A friend of a friend met with this new seller who also happened to be driving a red Lexus.  He saw the bullion and said he needed to verify the silver was real.  He cut into a bar and found it wasn't silver on the inside and also did an acid test which also proved the bars weren't solid silver.  The seller played it off very calmly like this was a big surprise to him as well.  Again remember this was just 1 day after he had returned me my money for attempting to sell the same counterfeit silver.

There are 2 scary issues about this situation.  First thing is that he is not being charged with a crime.  He returns the money for any transaction that the buyer realizes the silver is fake.  The second issue is that in 2 days I learned that he had sold upwards of $11,000 in counterfeit bullion which may or may not have gone undetected by the people buying from him.  He listed his ads in Connecticut, Massachusetts and New Hampshire and perhaps other states as well.  So it’s going to be very hard for these people to get their money back, and many may never even learn the bars are fakes.

Counterfeit Bullion, Fake Silver Bullion

Beware of Counterfeit Silver Bullion

If anyone bought silver bullion in Massachusetts, Connecticut, New Hampshire, and they feel the bullion is fake or counterfeit you must report this to the police.  I spoke with the FBI about this problem and the contact deferred this back down to the local authorities.  I also contacted the Massachusetts fraud division and they also didn't want to touch this type of case.  I was more than a little frustrated to learn that both agencies were not willing to get involved in obvious cases of fraud.  There are state and federal laws in place to prevent the sale of counterfeit bullion.

Counterfeit Pan American, Sunshine Mint, Stagecoach Bars

Bottom line: Save all the information you have and file a police report as soon as you can.  And if you’re going to buy silver on Craigslist bring a scale, magnet and even something to use as a reference for what you’re buying.  And always try to pay with a check or credit card or something that can be cancelled or tracked.  I was lucky that the counterfeit bars were magnetic.  NOT ALL COUNTERFEIT BULLION IS MAGNETIC.

I welcome any comments about this post.

Thanks,

~ JobIII

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