If you get a telephone call from someone wanting to sell you 100 tons of gold ore for $5,000, hang up quick. Better yet, pump the caller for information to turn over to the police.
The president of an association representing state securities regulators warned the other day that the selling of "dirt pile" gold mines has become a favorite scam of con artists since the stock market crashed a year ago. More people with money to invest these days are looking for something solid, like gold.Scripps Howard News Service reports that the swindle works something like this: A high-pressure salesman persuades someone to put up money, usually $5,000, for 100 tons of "aggregate ore," guaranteeing that the dirt contains at least 20 ounces of gold. Once the ore is processed, the proceeds are to be passed on to the investor.
On the face of it, that sounds like a good way to nearly double your money: The gold costs the investor $250 an ounce but it's worth about $430 an ounce on the market.
The catch is that the dirt at the supposed mine sites contains no economically recoverable gold. But by the time the investor finds this out, many long months after he has turned over his $5,000, the swindler has moved on to another city to set up another bunch of suckers.
Authorities figure that Americans will lose $250 million this year in what they call the "fool's gold rush of 1988." Don't be one of them.