Gold Bar Scams Net Millions in Montgomery County: ‘Money to be Had Here.’

The Washington Post / Dan Morse

14:14 JST, August 13, 2024

The elaborate scam is taking place nationwide. Fraudsters pose as federal agents, finding targets online or over the phone. They tell them their bank accounts are no longer safe. And eventually, after a series of communications, the swindlers persuade their targets to buy pricey gold bars and hand them over for safekeeping.

And in Montgomery County, Md. – an area just north of Washington with large pockets of wealth – the scam is hitting hard.

At least seven victims, authorities said Monday, have given up $6.3 million in gold bars over the last year – gold bars that they’ve never seen again. And that is just the cases for which there have been arrests. The number of actual victims, authorities said, is probably much higher.

“The scammers have preyed on peoples’ sensibilities and believing that they are talking to a federal agent,” Montgomery County Police detective Sean Petty said, “and that that federal agent is here to help them, protect them and to save them from being scammed by somebody else – when, in fact, they’re really being scammed by the individuals that they’re talking to.”

Petty and his federal counterparts spoke Monday at a news conference designed to bring more awareness to the swindles – both to potential victims, who so far have ranged from 61 to 94 years old – and their family members.

He said county investigators have been able to halt some of scams after targets became suspicious and called police before handing over more gold. Had they not done so, Petty said, the victims probably would have lost another $3.3 million.

Petty said he would prefer that potential targets not answer calls from unknown numbers. But if they do, he said, he warned them to be on the lookout for anyone holding themselves out to be federal agents who say they should convert assets to gold bars for holding. “It’s a scam,” Petty said. “One hundred percent it’s a scam. You are not going to get that gold back.”

There have been a string of recent arrests in several cases: An 82-year-old woman who handed over gold bars in a Wendy’s parking lot; a 74-year-old in Bethesda with memory loss who was conned out of $1.1 million; a resident of Montgomery’s Leisure World community who has mental health disabilities. Court proceedings are pending against defendants in the cases.

“In general, the victims that we’ve seen have obviously felt devastated, ashamed,” Petty said. “Ashamed is a major component of it. A lot of them have thought that ‘How could I be so stupid?’”

But he noted that all the victims in his cases have retired from highly respectable jobs. Petty and other investigators who’ve probed gold bar and similar scams said they’ve seen intelligent people from all manner of professions hooked by the scammers.

The swindlers prefer their targets buy gold bars because it’s apt to attract less attention than bank withdrawals.

“The scammers are asking for gold because it is a transaction that looks somewhat more normal than an elderly victim walking to a bank and attempting to withdraw $50,000 in cash,” FBI Supervisory Special Agent Keith Custer said Monday. “When looked at from the outside, the purchase of gold bullion is a normal investment activity. Lots of people want to invest in gold. So if a senior wires $50,000 to an online vendor, it looks like a normal transaction.”

The gold bars have arrived to Montgomery County residents via parcel delivery, according to court records. The scammers convince them to turn them over for safekeeping but to do so discreetly so not to attract the attention of purported criminals closing in on them. The gold bar hand off is sometimes accompanied by a code word like “watermelon.”

Montgomery State’s Attorney John McCarthy, the county’s top prosecutor, said the spate of Montgomery cases is probably due, in part, to active fraud investigators at the Montgomery police department. But he also said demographics could be at play, noting that about 230,000 people over the age of 60 live in the county.

“Many have retired from great jobs, and they’ve made a lot of money in their lifetime. There’s money to be had here,” McCarthy said.

The fraudsters often enlist a pre-scam to their scam – fishing for targets by telling them there is something wrong with their computer. This can come in the form of a pop-up on their monitor. The person is then directed to download software, giving the fraudsters access to their bank numbers.

From there, the scammers get a view into their targets finances and can convince them they’ve been hacked and are vulnerable. Then the targets are put in contact with purported law enforcement agents, who convince the mark not only to move their money to gold but that doing so will aide in their investigation of criminal rings.

“They shuffle you around between fake agencies about your bank accounts being compromised. The scammers are very convincing,” said Bill DelBagno, the FBI special agent in charge of the bureau’s Baltimore Field Office.

Over the last 15 months, he said the FBI’s Internet Crime Complaint Center (IC3) has received more than 250 complaints related to gold bar scams, totaling about $84 million.

“And that just reflects those victims who came forth and provided that information to IC3,” DelBagno said.

“People are losing their life savings, their homes, their trust, their security,” he added. “Unfortunately, it’s happening across the United States.”