In 2010, former Houston Rocket and 8-time NBA All-Star Dikembe Mutombo had a golden vision.
Mutombo thought he could use his contacts in Africa to buy large quantities of gold directly from a source in D.R. Congo at a huge discount.
So he convinced a businessman to buy up to 475 kg of gold over time, where Mutombo would share in the expected profit of at least $10 million.
Soon after the first payment of $4.8 million was made, Mutombo’s contact disappeared.
When it was all said and done, his investor had lost a total of $30 million as a result of the whole ordeal, which included transport fees, fines, bribes and payments made on the gold purchase.
Mutombo was not complicit in the scam, but he was certainly guilty of a being extremely naïve.
And while these types of scams make good headlines, they are not the most common. The following scams are the ones you’ll want to look out for…
1) The Bait and Switch
There are many gold bullion dealers who advertise exceptional rates on their American Eagle coins or gold bars, but when you call them up you’re told that they are sold out. The next thing you’ll hear from the dealer is about an “incredible deal” on a rare coin. The unfortunate reality is that many dealers use bullion as bait. The unscrupulous dealers’ goal is to get you on the phone, where their “brokers” will try several arguments to get you to switch from bullion to rare coins, also known as numismatics.
Source Gold 401k