Resources

Schemes, Scams, Frauds.

Home Up

www.crimes-of-persuasion.com Site Directory


Investment Scams Using Precious Metals and Oil & Gas Exploration


The Gold and Y2K Bugs  Gold coins

You are phoned and are offered an opportunity to buy unregistered stock in Selket Precious Metals, Inc. They say that they are seeking to raise $1,375,000, to finance equipment necessary to bring the Herculean Mine into commercial operation. They require a $10,000 minimum stock purchase per investor.

They tout investments in Selket by claiming that the opportunity offers low risk and high returns in a short time. They base this claim, in part, on the anticipated increase in demand for tangible assets resulting from fears about the impending disaster and financial collapse that the Y2K computer bug would allegedly cause on January 1, 2000.

Illustrative of the their claims about the profitability and low risk of an investment in their mining ventures and gold certificates are the following written and oral claims:

(a) "Gold and Silver is being bought in record amounts. The reason is the worrisome subject of the 'Y2K computer bug.' It matters little whether it is going to be catastrophic or comparatively mild, the price of gold and silver is going to climb at an exponential rate as we approach the year 2000 because of peoples' fear of a calamity!"

(b) "We have made a conservative evaluation of the precious metals content of the ore reserves available to us and have determined that the total amount to be gained, before taxes, is $200,000,000. This is the amount on which our company stock evaluation is made."

(c) "The gold is there and processing equipment is available and it would take only about two months to start pouring out gold. . . and you can't beat that."

(d) "Our weekly production schedule should yield about 334 Troy ounces of gold. At $300 per ounce this is about $100,000 per week or $400,000 per month. Part of this will be expenses but the net should be quite impressive."

The promoters also sell "gold certificates" ( redeemable for gold obtained from the Herculean Mine ) to people across the country over the Internet, via a web site, and through written promotional materials and telephone sales presentations.

"WARNING Read the enclosed file concerning the millennium bug. The only defense you have is to have something that is spendable like gold, silver, gold certificates, tradable merchandise or human labor. There will be a tremendous rise in armed robbery, looting, food raids and many other types of 'survival crimes'. When people get hungry, ethics, morality and sportsmanship go out the window."

"These certificates are just like money . . . they cannot be stolen or confiscated as gold could be. If this happens we will cancel the ones which were stolen or confiscated and they become worthless. They can be redeemed for real gold at your discretion. These certificates are in effect REAL MONEY."

"NOW FOR THE GOOD PART! . . .We will give as a bonus an amount of gold equal to the amount of your original purchase!! That is a 100% gain! That is exactly what every broker and venture capitalist that I approached wanted! I would much rather give it to you, my friends and customers than I would to them!"

In fact, it turns out that an investment in Selket or its gold certificates is not likely to yield a substantial short term return with minimal risk as the Herculean mine will not be fully operational within a few months and is unlikely to profitably produce at least 300 troy ounces of gold per week at any foreseeable time in the future, if ever.


Hints that you might be dealing with a boiler room scammer is if they state:

blue bullet point "A lot of oil and gas has been found in an adjacent field and a tip from a reputable geologist has given us a unique opportunity to make this venture a success."
blue bullet point "We've hit oil or gas on every other well previously drilled and a large reputable oil company is planning to operate near our leased property."
blue bullet point "A decision must be made immediately to invest in order to assure the purchase of one of the few interests remaining to be sold. "
blue bullet point "The deal is only available to a few lucky and specially chosen investors because there is very little risk involved."
blue bullet point "I'm so sure that this oil well "can't miss" that I've personally invested in the venture myself."

Home ] [ Up]

 

Order a book

Crimes of Persuasionon

Home Page / Model Scams Index / © 2000-2017 /Disclaimer / Privacy Statement