Gold from Africa. Questions about purchasing over the counter.
Jinx86
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I have a customer whose friend/family member from Africa has mailed him gold to sell in the US for better prices. Our XRF shows the purity around 22K and weight of about .33 ozt. The gold itself is fine nuggets/power with no traces of toxic elements typically used to process gold over there.
My question is has this gold been brought to the US illegally and if so does selling to me make me an accomplice?
I've told this customer I would need to do some research on the topic and I would get back to him.
Buying scrap gold is profitable and I like doing it, however I don't want to break any laws.
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It is probably not %100 above board, (i think you have to pay some tariffs and be an authorized dealer) but that small amount I wouldn't be too worried about purchasing.
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I know its a small quantity, however once words gets out in the community that I am a buyer of this material it may start pouring in. We have a fairly large African immigrant and refugee population and the word would spread quickly. I just want to be prepared if it does.
Flip it to a refinery.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Then I would pass, it is deffently not legal. You can't export gold from there without declaring it and paying whatever taxes are due, and I also believe that the person selling it has to be a registered dealer. Google "exporting gold from Africa" and there is a plethora of regulations and stories of people getting caught trying to smuggle it out.
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Easier said than done. Retail scrap purchases must be held for quite a number of days by law.
Melt it and pour into a solid piece.... The owners are the one's that may - or may not - have broken any laws.... unless you suspect it may be stolen. That is an entirely different issue...Of course, if it becomes a business, then records will be necessary.... Cheers, RickO
Are you buying it personally or thru your employer?
Through my employer
If those on the other end get in trouble for smuggling it out thats not his problem. As long as it isn't somehow stolen property here . The laws of some 3rd world hellhole could be written for the benefit of some brutal dictator I'd view it as a Robin Hood situation and buy it as fast as it arrives here.
What does he say to do about it or has he deferred that decision to you?
Well he is semi retired and gone for the week and no one else here has ever really given it any thought. So trying to do some research and trying to make sure our end is covered.
Id love to play Robin Hood for these people as I know the hardships many of them faced and their families face over there right now and the challenges they undertake to get the gold out of the ground over there. That and how little they can sell it for overseas is really a crime in itself.
Did anybody here read the thread about the elemetal mint? Or the thread here about how to be an international gold smuggler? Purchasing illegally sourced gold is not only bad for the smuggler, but bad for the purchaser as well. It's one thing if you have no idea where it comes from. That would allow you to probably avoid any criminal charges (if any). But you do know where it is coming from so there goes that. I would stay away.
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The way I look at is, if the gold wasn't obtained legally then how can it be legally sold. Will the local authority's care?, who knows. If all of a sudden he gets a lot of raw gold purchases on the books, will they start asking questions? What do you say to the authority's? The sellers were up front and told you where it came from. I would think if your buying PMs from the public you have to submit your purchases to the local PD so they can check for stolen goods. Can't you just give them a call and ask straight out? That way your covered at least. Keep us posted.
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No don't call the PD and rat yourself out preemptively , yikes
If the employer is skittish then buy the stuff yourself and rebate him a finders fee as a percentage if need be. Maybe you work some hours without getting paid ?
Really? where do you find this information??? I say fake news!
bob
tell your seller that you will be happy to send it to a refiner who will verify its value and that you will charge X% on whatever the refiner pays. Might be best to have the seller accumulate a bit and then send it on his behalf.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I would think it would depend on where you are as to what laws and ordinances are in play.
Ask yourself, is the potential profit worth the potential risk. I see red flags.
As usual, one can see those that want profits at any cost...even if it means going around, or bending, the rules.
I'm with the "red flags"/"beware" folks.
I've been told I tolerate fools poorly...that may explain things if I have a problem with you. Current ebay items - Nothing at the moment
Still working a few things out. Will post back once we make our final decision. Thanks you all for you imput so far.
For $400 worth of gold, and how much of that would be profit for you, I would pass.
it's crackers to slip a rozzer the dropsy in snide
Except that he is anticipating future business.
Well since that day i've had two others walk in with the same material about the same weights. Most places buy scrap gold at 60-90% of melt depending on quantities. Profits are profits, just want them to be clean profits.
I wouldn't pay until my refiner verified material and paid me.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Doesn't pass the smell test. To me, the potential profits don't appear to be worth the risk.
It should be fine don't ask any questions you wouldn't want to hear the answers to..... you could Jinx it , if worse comes to worse just 86 the deal
FWIW, when I was working in a coin shop I once had two gentlemen come in and try to buy more than $10,000 worth of gold for cash without it being reported. My gut instinct was that they were Federal agents trying to entrap us, so I kept repeating chapter and verse on the reporting laws and refused to break the law. In the end one of them purchased about $9,700 worth of Mexican 50 Pesos and peeled the cash off of a larger roll.
The next day the other gentleman came in alone to buy gold. I asked him if this transaction was in any way connected with his friend's transaction the previous day, because if it was then both transactions would be reported. He swore up and down that it was not related, spent about $4K and left. I don't know if they were Feds or if the first guy just sent his friend back the next day to spend more money or what. All I knew for sure was that we were protected.
I do not know if the deal offered to you is legal or not, and if not whether the sellers are legit or not or government agents. All I am saying is that if you have legitimate concerns about doing the deal, weigh the potential profit against the potential costs to defend yourself in court.
And some times people are not Feds but just crooked schmucks. During the Y2K madness people were buying all sorts of gold products that were normally hard to move, just because there was a general shortage of product. After the World did not end this low demand product drifted back into the marketplace.
In that after market we once bought in a large quantity (150-200?) of (IIRC) Australian 1/4 ounce gold nuggets. It was something that had never been popular and was hard to sell, and so we bought them for a few percent back of melt and planned to scrap them. Before we did, a fairly regular customer came in asking if we had any gold deals. Bob showed him the deal and offered it to him at melt. Good price, right? Came to about $12K. The guy says great, I'll take them, and whips out a roll of cash. We knew the guy and would have taken his check.
Bob says he can't do over $10K in cash. The guy grumbles, but end up buying what he can and stay under $10K.
The next day a woman comes in and asks if we have any Australian 1/4 ounce gold nuggets. Bob happened to wait on her, and being a little suspicious he offers her one piece at about $4 over melt, still a fairly good retail price. Gold had not changed overnight.
She blurts out "I thought they were $xxx," the exact price the guy had paid the day before. He had sent his secretary in with the cash to buy the rest of the deal. Bob told her to tell her boss that this was now a linked transaction, and any additional cash sales would be reported.
Not an issue as I have smelting equipment on site and an XRF analyzer.
With the new requirements aren't we supposed to report even suspicious and suspected structuring. I don't fill out much for 1099 paperwork, most is online now.
Yes, but this was some 15 years ago.
Far fetched but could be a sting operation ??
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IIRC at the retail level the limit is $10K in cash purchases per customer year. Correct?
Theoretically there can be a number of random purchases which happen to exceed $10K in a 12-month period (not necessarily a calendar year) that need not be reported. However, if somebody tells you "I am going to be buying $2500 worth a month and pay in cash" those are linked transactions.
Then what is the issue it was scrap jewelry brought in 2 months ago.
If someone said they were going to buy $2500 a month they were probably linked but how would you know the guy's name to write up the report? I have never been asked my name when I pay for bullion with cash. I think technically there is supposed to be sales tax on bullion where I live , but I have never been charged it .
A potential scam to watch out for would be if they sold you one or two batches that assayed out Ok and then, after you started buying batches without waiting for test results, they hit you with several batches of fake gold.
There are lots of con men and women out there. Several years ago there were reports of two guys who would come into a coin shop with a very heavy and genuine 14kt bracelet or necklace, present it to the shop for testing and an offer, and then after getting an offer one of them would say "No, that's not enough" and put it in his pocket. The other guy would say "Come on, man, we need the money" and the first guy would say "OK" and pull a fake gold duplicate of the same item back out of the same pocket just a few seconds after it went in. If the dealer did not retest it he got screwed.
You are then required to demand identification, and if it is not provided refuse to make the transaction.
A customer is under no legal obligation to provide a SSN or name when filling out a form 8300.
https://jmbullion.com/reportable-bullion-transactions-infographic/
A few years back I purchased some gold with cash from a local dealer. He told me that I had x amount of dollars remaining in my cash balance with him for the next year or the remainder of that year and anything over that would have to be a check.
If I buy $3500 of gold eagles from you and 3 months later I buy $4500 in gold maple leafs [both for cash], would you consider those to be "related" transactions?
No, unless you bring it up, such as by saying "Hey, remember I bought that other gold from you, how about giving me a better price" or some such. Separate, discrete purchases are not related.
Forgot about this thread!
I ended up buying gold from 3 individuals. All small amounts. .2ozt to .35ozt agw. I melted down their fine powder into a bead and x-ray analyzed for purity. Neither of them know if they might be getting more, they all said(separately) that it would be unlikely.
So I feel good about it, they were happy with the payout. Held for the time required by law. Sold. Happy ending.
What matters is the IRS considers them "related." because they are two large cash transactions from the same buyer. And the reason is that while they don't meet the $10K requirement, a third transaction just might.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
So how did it test out?
What is the fuel cost of melting each lot down into a bead?
Cost to melt is minimal as the crucible for the induction furnace was already hot. Just weighed it dumped it in and weighed it after I pour it to determine melt loss. I knew it would be high carat when I started, 23K once melted.
You could do the same with a torch if you wanted to. I've had bad luck using them on powders. Lost a few grams from my computer scrap recycling days. POOF, all profits gone. Wouldn't want to do that to a customer.