Sunday, February 28, 2016

All That Glisters Is Not Gold - African Gold Scams

All That Glisters Is Not Gold - African Gold Scams

Have you ever received an email, text, instant message, fax or other communication offering you "Alluvial Gold", "Gold Dust" or "Gold Bars" from Africa? Are the prices given "too good to be true"? Then read on to discover why "All That Glisters Is Not Gold".

The Proposal
"My aim of contacting you is to make a Gold transaction proposals to you. I am Ghanaian citizen and it happened that my family had a Gold concession, though we are into small scale mining, But we want to sell (440kg) of Gold that we have in stock in order to purchase mining equipment."
- Kwarteng Yeboah
The above is a typical opening missive to one of the types of Advance Fee Fraud known as the African Gold Scam. To certain types of individuals the offer of acquiring a quantity of Gold may seem like the dream ticket, especially when it appears to be relatively inexpensive, as with the next text.
"How would you find making money for yourself just by being a middleman between a seller and a buyer? ... Commodity: AU Alluvial Gold Dust; Carat: 22 Carat; Quantity: 250 kg; Price: $12,500; Purity: 92.9%; Origin: Ghana"
- Williams Kofi
Other types of proposals include more technical details, as well as having sourced Gold from many parts of West Africa. This one from Cote D'Ivoire (Ivory Coast).
"...we are with the head of a Company of Transit and Consignment based in Ivory Coast West Africa. Our Company represents and helps a group of village Gold mining washers to sell their natural noble metals; mainly A/U Gold. We have at present for export 600Kilogrammes of Gold dust whose characteristics are as follows: *Origin: Ghana, Bokinafaso and cote d' ivoire in West Africa*Quality: 22 Karats+*Nature:Gold Dust*Rate of purity:93%* Impurity; composition:7% (primarily iron Oxide)"
- Anthony Uti
If that was not enough, how about dealing with someone who has allegedly stolen sacks of Gold Dust from a mine in Burkina Faso, with pictures too!
"I work in gold field in Burkina-faso. I got some 5sack of Gold Dust secretly from our company, wort 25kg per sack. Wort Millions of Euro... Note, I attache my picture at work in Miner, where i put on Africa native dress."
- EL-Haji Bin Hassan Oumar

The Sting, and Worse

Despite the theme of the communications revolving around precious metals, the underlying scheme is exactly the same as any other type of Advance Fee Fraud. You will be asked at some point to provide an amount of money prior to getting your hands on any Gold. You may have had to fill out various forms, provide your personal or even banking information, but always there will be some sort of fee to be paid. The requested fee of course is the main sting, because the Gold simply does not exist in the first place. That's the 'Fraud' part of the 'Advance Fee'.

Alarmingly, this type of scam also tends to go a stage further than most types of Advance Fee Fraud, and actually suggests/requests that you travel to West Africa to conduct business.
"We can send to you 65kg of 21-24 karat through Airway bill while i come over to meet you or if you wish to come to Ghana to see things for yourself and hereafter both of us will travel to your country with as many golds we can carry through Air way cargo for sales."
- Marth Ann Kuhns
"We have an agent who can go to anywhere in the world with 100KGS for any buyer who dont want to come down here in Ghana."
- Ernest Kojo
"If you are Interested you should come down to Accra/Ghana and have round table talk with the elders of Ashanti Kingdom."
- Clement Tokangaa
Should anyone actually travel as suggested, then what awaits them is not going to be pleasant. Robbery would be the first thing, especially if you happen to be carrying a large amount of cash. Next would likely to be kidnapping, and being held for ransom. If you pay a fee then figure out it is a con, you may be tempted to go out to West Africa to find your money; A bad idea that one!
(News: article)

In another twist to the obvious sting, here is an account taken from RipOffReport, which makes for very interesting reading. It shows another reason for the suggestion that you (the victim) should travel to West Africa. As you will read, even people who know what they are doing still get caught out.

Name: Irfan - Submitted: 8/18/2008 3:59:54 PM

I live in the UK and was pursuing gold dust exports from several countried including Ghana.

No doubt, anyone reading this message has already researched gold (dust in particular) purchase and resale. On the face of it - Ghana offers real opportunity, you can pretty much buy significant quantities - at prices that can make a very healthy return.

That's exactly what i though and did as much homework as i could, which is how i found the Lou Dayo company: -

I'm sure this is where many of you are right now!

Its headed by an African-American lady called Annette Smith - picture of her on her Website (with shades!). I phoned, discussed everything regarding my business and subsequently visited Ghana on a fact-finding mission. What made this feel so real was that Annette was American, spoke the language, was confident and knew the gold business well - however this is all part of the scam - to entice you in.

I met Annette whilst i was in Ghana and was introduced to a large Ghanaian called 'Mr. Ocean' (at a Chinese restaurant in Achimota). Apparently he was a mine owner, and a village chief. His 'company' held the appropriate export license to allow private buyers to export gold dust.

Now here's the thing....

  1. I visited his mining operation - details of this i can supply, and whilst small - is full operational
  2. I checked his mining permit and export license via the PMMC in Accra
  3. I 'road-tested' all his paperwork by purchasing a small quantity of alluvial concentrate (gold dust) worth $2000, and took this to Dubai. Here i tested privately - confirming the authenticity of the product befor selling it.
  4. On my route to Dubai, i went to see Customs at Accra airport and made them check the paperwork supplied by Mr. Ocean and Annette - it was generally speaking ok.
  5. I returned to the UK and planned a more substantial visit back to Ghana to procure a much larger transaction...of 2Kgs of Gold dust - which was being sold to me for $20,000 a kilo.

I was still hesitant and cautious in my dealings, taking only some of my money with me. With Annette's and Mr.Ocean's help i established a personal account with Standard Chartered Bank in Accra Central (their largest branch). There assistance with this gave me assurance that i was dealing with genuine business people (alas my optimism was unfounded!). There is more detail around setting up the bank account - but i'll leave that for now - suffice to say i set-up the account and managed to get my money across. Note that i used S.C because this is who they bank with.

Once i had my money - i withdrew $40,000 dollars, went to Mr.Ocean's house in Achimota - an area within Accra. Behind the green steel doors and barbed wire fencing this nondescript house is where Mr.Ocean & co conduct their fraud. I was fully on my guard - but by this stage i had been to this house several times - and felt reasonably comfortable.

The Scam!
  1. The gold they sell is genuine! - this is what makes the scam professional! i tested using acid - which is fairly common. You can also test via the Government owned Ministry, this is mandatory to get the export papers. The point here is that - the goods were absolutely genuine
  2. All the paperwork produced was genuine - this includes the fully legit copies of the Export form (A2 form), Certificate of Origin and Seller invoice.
  3. Once i had the gold and paperwork - i gave the money, exchanged niceties and left. At this stage i was being shuttled by Mr. Ocean's own driver (to and from the hotel). I genuinely believed this was the safest option. After all, i was now convinced that these people were genuine and were looking for a long term partnership
  4. On the way back to the hotel, the driver is going slow - on the lookout for something.....and i'm sure he deviates from his usual route.
  5. I hear a brief siren, and get stopped by a fully armed police car. Two cops step out (with guns). Some rubbish about a random drug check is given. I know instantly whats about to heart sinks.
  6. A childish act follows whereby the drivers paperwork is checked, and silly questions asked. They then eye my rucksack, and ask me to open it. I know where this is going....and in all fairness i feel that its not worth doing anything that could risk my life.
  7. They grab the sealed contents and demand to see the paperwork. They take the paperwork (i.e. all the proof) and instantly the random drug search is over. They tell us to come to 'a fictitious' police station and scarper.
  8. The driver, clearly in on the whole charade, comes out with some jibberish about not to worry and telling Mr. Ocean etc etc etc.
  9. I get to the hotel and absolutely lay in to the driver - causing a big scene outside the hotel...
  10. I decide not to tell the authorities as i have lost all confidence in everything around me.....i was held up by absolutely genuine police offers - but obviously paid off! who can i trust now!
  11. Mr. Ocean rings 1 hour later.....denying all culpability! - i take none of it - but know theres little i can do. I also believe he was trying to sting me for more money to try and 'pay off' the already paid off cops!!
  12. I leave Ghana the next day and vow never to return.
People......these guys are professionals. Thats how i was done in. Their scam is elaborate and well executed. They have a number of people paid off to allow them to do what they do.

I can supply further details to anyone interested - but please - you will know instantly who i am talking about if you've seen their website - or met them already. They will set you up with smaller deals and then hit you hard.

My parting words with Mr. Ocean & Co...was simply that i would tell the World about their fraud and cause them the only suffering they care about - loss of revenue!

As a parting note - the PMMC - whom i met did warn me not to deal with anyone privately and not to buy dust, however their own prices were so high, i felt i had to try.

In all i lost $40,000, a huge amount of confidence and trust in my fellow man!!

Any questions - please get back to me - or post your own details.


Always Be careful.

United Kingdom
(RipOffReport : article)
Some Truth Behind The Lies

The vast majority of the West African Gold Scams revolve around one particular country, namely Ghana, so let's concentrate on that country to reveal some truths.

In 2006 a Trade and Investment Framework Agreement (TIFA) Council Meeting was held in Accra Ghana. In one of these speeches a cause for concern was raised, in which Ghana based Advance Fee Fraud and Gold Scams were included.
"Fraud is also a major concern among the business community. Given current trends, we expect to see a five-fold increase in relationship fraud involving US citizens alone over the past year, and a 50% increase in advance fee fraud for business transactions. Credit card fraud, gold scams and other financial crimes are serious problems that Ghanaians must tackle for tourism and international commerce to flourish."
(U.S. Embassy Ghana : article)
There are strict rules in Ghana which govern both the import and export of Gold, diamonds and precious minerals. The U.S. Department of State, Bureau of Consular Affairs writes the following on thier Ghana information page...
"Only agents licensed by the Precious Metals and Mining Commission ... may handle import-export transactions of these natural resources. Any transaction without the commission’s endorsement is illegal and/or fraudulent. All transactions must be completed through the commission at the price set daily by the London exchange. Any transaction that discounts this price, or includes a previously negotiated price, is either illegal or fraudulent. Export of gold dust is rare as it encourages dangerous and environmentally destructive practices, and transactions involving the export of gold dust are probably fraudulent. Attempts to evade regulations are punishable by imprisonment. It is advisable to contact the Embassy of Ghana in Washington, DC, or one of the Ghanaian consulates in the United States, for specific information regarding customs requirements."
(U.S. Department of State, Bureau of Consular Affairs : article)
Let us pull out the points made in the paragraph above, just to make sure they get read:-
  1. Agents must be licensed by the Precious Metals and Mining Commission.
  2. Transactions without the endorsement of the Commission are illegal and/or fraudulent.
  3. Transactions must be completed through the Commission at the price set daily by the London exchange.
  4. Transaction that discounts the London exchange price are illegal and/or fraudulent.
  5. Transactions involving the export of gold dust are probably fraudulent.
  6. Attempts to evade regulations are punishable by imprisonment.

Principle Ministries (Ghana)

In Ghana, where most of the fraudulent Gold schemes appear to reference, there are a number of Ministries for the mining sub-sector.
  • The Minerals Commission (Mining Portal of Ghana : link)
    The Commission is responsible for the regulation and management of the utilization of the mineral resources of Ghana and the co-ordination of the policies in relation to them.
  • The Geological Survey Department (Mining Portal of Ghana : link)
    Responsible for the provision of reliable and up-to-date geological information for national development through geological mappin, research and investigations and also acts as repository of the country's geo-scientific data.
  • The Inspectorate Division of Minerals Commission (Mining Portal of Ghana : link)
    The Inspectorate Division of Minerals Commission is responsible for instituting and enforcing health, safety and environmental standards in the mines. It also ensures that mining companies and all mining related activities comply with Ghana's Mining and Mineral laws and Regulations through effective monitoring.
  • The Precious Minerals Marketing Company Limited (Mining Portal of Ghana : link)
    The PMMC provides official marketing services for small scale gold and diamond miners. It also promotes the development of precious minerals and the jewellery industry in Ghana.

If one were to begin making enquiries regarding an offer of Gold, then the Precious Minerals Marketing Company Limited would be your first port of call. The PMMC serves the small-scale Gold producers in Ghana and have a number of licensed agents who purchase Gold for the company. The PMMC then sells this Gold to an overseas Gold refinery. Overseas buyers may make contact with local Gold buyers, but all offers must be confirmed through the PMMC itself. Overseas buyers of Gold are strictly advised NOT to pay cash to any local suppliers of Gold.
(Mining Portal of Ghana - PMMC Gold Export Procedure link) (*link no longer valid)

Offers Too Good To Be True (added 8th October 2010)

In a report on The Ghana Journal website on October 8th, 2010 (link) we also see an exposure of yet another Gold scam in Ghana. This particular report however, contains some very pertinent information in regards to Gold trade inside Ghana, specifically about alleged suppliers. Here are the keypoints:-
  • The Ghana Chamber of Mines said: "in the sale of gold our members do not seek out individual buyers or users."
  • Gold is one of the major foreign exchange earners of the West African country, formerly known as Gold Coast.
  • The Ghana Chamber of Mines is the main minerals industry association in Ghana, representing the collective interests of companies involved in mineral exploration, production and processing in the country.
  • In Ghana, all gold agents must be licensed and transactions certified by the precious minerals marketing company before businesses are transacted.
  • Gold is normally sold in Ghana in the smelted form, that is bars, and very rarely in the dust form.


Like all types of Advance Fee Fraud the communications between yourself and the fraudster are designed to trick you into giving away your money. The simplistic version simply comes as an unsolicited email, but other types of solicitation can see the con being more effective.

As always, due dilligence is required by the recipient to remove doubts that one is being or is about to be defruaded. It is hoped that this article gives pointers into what to look for, recognize and resolve.

Be careful out there!

References And Further Reading
  • Wikipedia - All That Glisters Is Not Gold [link]
  • U.S. Embassy Ghana - TIFA Council Meeting (July 21, 2006) [link]
  • RipOffReport - Lou Dayo [link]
  • Ghana Journal - Gold Scam Exposed In Ghana [link]
  • U.S. Department of State, Bureau of Consular Affairs : Ghana Information [link]
  • Ghana Web : Tourism, General Information [link]
  • Mining Portal of Ghana - Main Page [link]
  • Mining Portal of Ghana - Minerals Commission [link]
  • Mining Portal of Ghana - Geological Survey Department [link]
  • Mining Portal of Ghana - Inspectorate Division of Mining Commission [link]
  • Mining Portal of Ghana - Precious Minerals Marketing Company Ltd [link]
  • Mining Portal of Ghana - PMMC Gold Export Procedure [link]
  • News: Dramatic rescue for hostage in internet cash con [link]

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