Gold Scammer Sentenced to 10 Years in Prison

(Mike Maharrey, Money Metals News Service) They threw the book at him. I hope it hurt.

A Maryland circuit court judge sentenced Ravinklejeet Mathon, 26, to 10 years in prison for his part in an elaborate gold scam. Five years of the sentence was suspended, but he will still likely serve about five years behind bars.

The sentence was unusually harsh based on sentencing guidelines. Typically, the penalty for this kind of crime would range between probation and one year in jail. But State’s Attorney John McCarthy said that sentencing guidelines for non-violent white-collar crimes are “typically low” and “not designed to deal with crimes of this magnitude and complexity.”

“The gold bar scams are unique due to the level of international, organized crime involved. In addition, there was special vulnerability in this case due to the victim’s advanced age of 94.”

I have to admit, I don’t feel sorry for Mathon. Not a bit. In fact, a person who would stoop so low as to scam a 94-year-old out of his life savings deserves that punishment and more. I’m not going to say flogging might be in order, but…

The Scam

The scam started with a phone call.

Mathon contacted the 94-year-old victim, posing as a federal agent. He managed to convince the victim that his identity had been stolen, putting his savings in jeopardy. Mathon told the victim he needed to buy three gold bars valued at about $230,000 and then transfer them to a “federal agent” who would hold them for safekeeping while the government issued the victim a new Social Security number.

The old fella bought the gold bars, but fortunately, the first handoff fell through. The victim apparently became suspicious and contacted police. Authorities then set up a sting operation.

Here’s how MoCo360 described the bust:

“Detectives then helped set up a sting operation to catch the scammer by placing metal hand tools in the cardboard box in which the gold bars had arrived ‘to give it weight and the feeling of gold,’ charging documents said. Then, a detective posed as the man at his home and handed off the box to a courier in a Toyota Prius.

“‘The vehicle then quickly drove away from the residence and was stopped a short time later by [county] detectives on Briggs Chaney Road,’ the charging documents said. The driver of the Prius, later identified as Mathon, was taken into custody and interviewed by detectives.”

This kind of scam is more common than you might think. In October, a Montgomery County court sentenced a California man in a similar scheme involving $800,000 in gold bars.

Police in Montgomery County, Maryland, say they have identified seven cases involving residents who lost more than a total of $6.3 million in gold bar schemes.

I have to admit, being a skeptical person, I have a hard time understanding how these scams work. I mean, there is no way I’m handing gold bars to some dude in a Prius. My advice to you is don’t do that.

But from the scammer’s perspective, gold is the way to go. Once he has possession of the gold bars, they are virtually impossible to track and can easily be converted to any currency. It’s also an easy way to hide and transport large amounts of money. And while most scammers probably aren’t thinking in these terms, stealing gold instead of cash protects their ill-gotten gains from the relentless decrease in purchasing power due to inflation.

Sophisticated scammers can be convincing, but there are ways to avoid getting sucked in.

First, never click on a link you don’t recognize. If somebody texts you a link that appears to be from a legitimate company, ignore the link and go directly to that company’s website.

And if somebody calls claiming to be from this or that government agency, hang up and call the agency directly.

Simply put, don’t trust anybody who contacts you out of the blue.

And when it comes to buying gold and silver, only use trusted dealers such as Money Metals Exchange. This should go without saying, but never buy gold from some guy hawking it out of his trunk in a gas station parking lot. (Yes, this is a thing.)

Finally, if it sounds too good to be true – well – it probably is.

Mike Maharrey is a journalist and market analyst for MoneyMetals.com with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.