Mormons Become Victims in $50 Million Scam to Sell Gold Bullion
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By James Sterngold
Sept. 1 (Bloomberg) -- Henry Jones delivered the good news in a conference call with Tri Energy Inc.’s investors: The gold deal the company had been working on for years was about to pay off.
Jones, 55, a record producer in Marina del Rey, California, and his two partners had raised more than $50 million from 735 investors, which they said they were using to broker the sale to Arab buyers of 20,000 tons of gold owned by a group of Israelis. They promised to triple investors’ money -- if only Tri Energy could overcome some last-minute glitches.
All the company needed to close the deal, Jones said on the Dec. 20, 2004, conference call, taped by one of the participants, was a “safe-passage letter” that would cost $450,000. A few days later, on another call, he said Tri Energy had to come up with $100,000 to open a “commission account.” Then, on Jan. 15, 2005, a new request: The bank handling the deal wanted $125,000 to conduct an audit.
Like those caught up in other get-rich scams -- from Bernard Madoff’s $65 billion Ponzi scheme, which initially snared wealthy Jews, to an alleged $4.4 million fraud aimed at deaf people -- Tri Energy’s investors had something in common. Many were Mormons and born-again Christians who shared dreams and prayers on nightly conference calls. They vowed to use the profits for charitable works and kept raising funds, at times taking out second mortgages, draining retirement accounts and recruiting relatives.
Wow! Lets look how many things don't add up for any "investor" who has been smart enough to save four nickels.
1) gold bullion is sold with a slight premium from boker to buyer or slight discount from seller to broker. The larger the order the smaller the premium above spot, or the smaller the spread below gold spot bid.
2) Why on God's green earth would Arabs want or need to buy "Israeli gold"? Especially considering that gold bullion is bought and sold everywhere with no special consideration on price as to whether it Isreali, or bangladeshi or whatever, and more so to have some rubes from Utah be the go betweens? That part is so comical that I wonder how the promoters can even say it out loud without busting out in laughter?
3) A "safe passage letter"? Whatever that is, and why does it cost $450,000? Is the letter made of solid gold itself, weighing some 40 troy pounds? The "last minute glitches" smack of the Nigerian scams. The scam is cut out of the same cloth.
4)$100,000 cost for a commission account? Does that come with a month's worth of high priced hookers thrown in or something?
5) An audit for $125,000? An audit of gold bullion would take about one or two hours at most, and that is probably with the auditors breaking for coffee, doughnuts, two smoke breaks and some lunch. Our financial audit just cost us about $12k and the auditors have been here off and on for two months as we bend over and allow their financial probing into our rectal cavities for anything suspicious.
It is a classic scam on greed. You promise the high returns, get the "deal" right to the finish line, then throw in the last minute glitches. The marks, or rather, the investors are sooo close they can just taste the high returns and will agree to almost any additional cost to get the deal done and them their free money.
Dumb asses.
I wonder, in all that prayin' to Jesus, why didn't he reveal to them that the whole thing was a scam?