Precious Metal Trading (London Gold) Scam

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updates

Background

2016.09.12 approached by stranger (pretty lady) called Tina on momo,

   added me as a friend and asked for my wechat account.
   Note, this is one of several investment scheme salesgirls who pry momo and
   wechat for preys. Their modus operandi:
       1) post pics of flashy expensive lifestyles
       2) beautiful/gorgeous
       3) post earnings profit checks
       4) post earnings predictions, and follow-up
   Tina is just one of the more persistent ones, who chatted with me on and off
   over a long period of 5 months, while all the others (3-5) gave up after a
   few weeks of chatting.
   She is also a Hong Konger, so we exchanged a few voice messages, in Cantoneese.
   Everyone of these girls claim to earn fantastic returns trading
       1) gold, 2) oil
   I now understand why these 2 entities; unlike stock,
   gold and oil seems to be UN-regulated by the securities exchanges of
   their home countries (China, Hong Kong)
   Tina is more sophististicated compared to the others, as she has posted
   various gold price predictions, along with the realized gains, and
   occasional loss. I enjoyed the occasional general chats with her (50% investments, 50% casual)


2017.02.13 I told Tina I was in Hong Kong, and she invited me to drop by her office. I ask for her availability, she says she is free only in the afternoons. (I understand why, because her manager works only during office hours)

She said she goes to work at 11am, and takes off at 8pm (wierd hours).

Initially she asked me to give her 1 day notice, which I tried to bypass by asking her for an appointment on the same day of 2017.02.13, she postponed it to the next day claiming that she is busy at night doing US/European trade.

2017.02.14

   16:00   she asked if I was visiting her today,
           said I can be free only after 17:30 and asked if we need to
           reschedule for another day, she said she will wait for me.
   18:30   I reached her office in North Point on Hong Kong Island.
           The office is located in a nice looking modern hires building
           with a US insurer as its anchor tenant. There is a 
           huge bronze bull statue in the lobby.
   18:40   Tina came down to the lobby to fetch me. 
           Lo and behold, this is a different girl from the picture in
           wechat and momo account. Not ugly, but just regular Hong Kong girl.
   19:00  We went up to their offices on 39th floor and the story follows:

The office have rows of bench tables, with group of mostly young men idling, playing with their phones. It could be after office hours, but most of them look very unkempt (more like insurance sales agents).

Tina knocked on the first office, took a peek inside, then she knocked on a second office, and we went in. (Note: this shows that she is just bringing me into any one of the con man offices)

We went into an office to meet with her manager (VP of marketing) who showed me various printed ppts on how the gold prices will go up/down following historical trend.

The VP Rico went through details with me on his investment success with printouts showing profit of HK$3m on HK$1.5m investment. Using some dodgy historical track record that gold prices will rise from Jan-Feb typically, based on past 12 years of trend during this period.

The guy looks unrefined, wears a suit jacket and fake looking watch with many diamonds, but in general has very poor taste

I specifically asked him what is his commission and how he makes money

1) First, he said he does not earn a commission, he only earns a brokerage fee of HK$315 per trade

2) when I grilled him further, he says his customers give him a voluntary cut every 9 days, I ask him how much, he says it depends

3) 10 mins later when I asked him again on how he makes money, then he BS me about how him taking 10% commission

The above self-contradicting points show that he is lying.

During the entire presentation, Tina simply sat next to me saying nothing. Not a word. She only occasionally checks her phone (once every 5-10 mins)

At the end of his presentation, Rico did no pressure me to make any decision, since I have previously told Tina that I do not plan to put in any money at this point, this is just a due diligence trip. However, he did say that I could put in just HK$10k, but he would advise me to put in HK$50K x 2, total HK$100K one for investment one for safeguarding/leveraging (5x-10x)

As Rico mentioned opening an account. I asked to open one since there is no minimum deposit or maintanence fee. They then asked to photocopy my Hong Kong ID card and bank card, which I gave them. This is when Tina's utility as an assistant became apparent, she swiftly made copies of my Hong Kong ID and bank card.

I filled in an account opening form, signed several places. One of the glaring ones is

       I authorized Rico to trade on my behalf.
       This is the killer; It is like giving Rico your money for him to do whatever he sees fit.

There is no regulatory body safeguarding your money and its use.

Rico earns $315 on every trade he makes on my behalf. If he loses money for me he does not need to be responsible, if he earns profit for me, there is no incentives for him.

When I asked about "Tina", Rico said she does not do trade, she is just a girl and thus have a small risk appetite. I said 2-3 times, so Tina is just marketing and sales, to which Rico did not object to. This is completely different from what Tina told me on and off. Tina on wechat is a successful upper-class lady who trade for her clients.

Typically, he or she just needs to make hundreds of useless trades and he or she gets to keep all the commissions.

After I filled in the form, Rico said someone will call me to confirm the details, citing some regulatory requirements (which may be BS). They did handed me a yellow booklet titled "Terms and Conditions: Precious Metals Account Terms and Conditions". I bidded good bye to Rico and left. Tina saw me off to the building lobby.

2017.02.15 Someone called me and specifically asked me to acknowledge that I understand the risk associated with the trading account as detailed in the booklet. I said yes I did. The person confirmed the details of my email, home address, phone in Singapore.

Now what remains from me is a proof of my address, which I don't intend to send them. Because I have found out that this is a scam. See conclusion below.

They also asked for my Hong Kong passport, which I did not bring.

Conclusion

Once you sign off legally for them to trade on your behalf, you are dead they just need to perform N trades, and earn HK$315 for each trade, and your account is dead. In fact they will specifically lose money for you and then call you up to put in more money (just like gambling), so that you can made up the losses. The more money you put in, the more you lose.

It is a black hole.

DO NOT PUT IN any money!!!!!

Reference:

  1. Detail description of scams
  2. Hong Kong Golden Forum has a discussion thread on scams like these, if you can read Chinese:
  3. London Gold Scam is a 20+ year old Scam that is operating in various guise:
  4. Glory Sky International Holdings Group (Macau) scammed HK$110m from 5 victims:
  5. "Two former agents of Glory Sky Precious Metals Ltd were fined $2,200 and $1,500 for unlicensed dealings in leveraged foreign exchange trading." This links Glory Sky Hong Kong to Glory Sky Macau
  6. Link to hardwarezone.com.sg
  7. Small claims against Glory Sky Precious Metals Limited Ex-Employees
  8. Wechat scammers modus operandi in Chinese with feedback
  9. Type of qualifications for people the scam companies hire
  10. HK Apple Daily 2013 Report on wechat female investment scammers (in Chinese)