Last Tuesday, the FIOD made three arrests in an investigation into investment fraud, money laundering and fraud. This involves an investigation into a number of individuals involved in offering the opportunity to buy gold from gold mines in Africa at a steep discount through Forward Gold Sales since 2015.

Criminal investigation

The FIOD investigation was launched after a report was filed by the Financial Markets Authority. This investigation is under the direction of the Office of the Public Prosecutor. During the FIOD investigation, homes and business premises and a caravan in Huizen were investigated. This involved the seizure of administration, a dozen cars, premises, bank accounts, gold, silver, watches and jewelry. Weapons were also found during the searches.

Buying gold at a discount

During 2015, as much as 50 million euros was received by the suspects from investors who bought gold at a discount. These were so-called Forward Gold Sales where, after a long waiting period, gold would be delivered at a price 10% lower than the actual gold price.
Only a small part of the deposited funds were allegedly actually invested in a gold mine in Africa while the rest of these 50 million euros were presumably consumed and spent differently. According to FIOD spokeswoman Wietske Visser, this is probably investment fraud. ‘The suspicion is that money from new investors is being used to pay previous investors (Ponzi fraud).’

How does this gold fraud work?

Investors who buy gold in this way are led to believe that the amount deposited will be used to buy future gold production from a gold mine in Africa. It often takes up to 10 months or more before investors actually get access to physical gold, at a discount to the then prevailing gold price. At that point, it is also very interesting to sell the gold again at the then prevailing gold price to make an immediate return.
In reality, the money is used for very different purposes. Since most investors do not opt for physical delivery, new deposits can be used to finance previous transactions. This is a typical example of a ponzi scheme, and an offer where gold can be bought with a 10% discount compared to the global gold price is also too good to be true.

Buy gold at a 10% discount or with 100% certainty

If you want to buy physical gold, always opt for 100% security and don't be tempted by offers with unrealistically low prices. In the gold market, the norm is to receive gold physically immediately and not to wait months for it.
Victims of this possible investment fraud can report to the FIOD via: fiod.fraudemelden@belastingdienst.nl