This alarming scam has been sweeping the nation, preying on unsuspecting individuals and causing substantial financial losses, particularly in affluent regions like Montgomery County, Maryland. The scam is highly sophisticated, with fraudsters posing as federal agents to manipulate their victims into a false sense of security. These criminals typically initiate contact with their targets online or over the phone, claiming that the victim’s bank accounts are compromised and no longer safe. What follows is a calculated series of communications designed to instill fear and urgency, ultimately persuading the victim to purchase expensive gold bars, supposedly for “safekeeping.”
Montgomery County, a wealthy area just north of Washington, D.C., has been hit particularly hard by this scam. Authorities have reported that at least seven victims in the county have collectively lost $6.3 million in gold bars over the past year. These are just the cases where arrests have been made, leading investigators to believe that the actual number of victims could be significantly higher. The victims, most of whom are elderly, ranging in age from 61 to 94 years old, have been systematically deceived into believing that they are assisting federal agents in protecting their assets from being stolen by criminals. However, the tragic irony is that they are actually being scammed by the very individuals they think are helping them.
Montgomery County Police Detective Sean Petty, who has been deeply involved in investigating these cases, spoke at a recent press conference to bring greater awareness to the scam. Petty emphasized how the fraudsters have exploited the trust and sensibilities of their victims, who genuinely believe they are cooperating with legitimate federal agents. “The scammers have preyed on peoples’ sensibilities and believing that they are talking to a federal agent,” Petty said. “And that that federal agent is here to help them, protect them, and to save them from being scammed by somebody else — when, in fact, they’re really being scammed by the individuals that they’re talking to.”
The press conference was not only a call to action for potential victims but also for their families, who may need to be vigilant in protecting their loved ones from such elaborate schemes. Petty and his colleagues shared stories of victims who had lost substantial sums of money but also highlighted instances where quick thinking and skepticism led to the prevention of further losses. In some cases, potential victims became suspicious and contacted the police before handing over their gold, saving themselves an additional $3.3 million that would have been lost.
Detective Petty advised that people should avoid answering calls from unknown numbers, but if they do, they should be extremely cautious of anyone posing as a federal agent and advising them to convert their assets into gold bars for safekeeping. “It’s a scam,” Petty warned. “One hundred percent it’s a scam. You are not going to get that gold back.”
The scam has led to a series of recent arrests in Montgomery County, highlighting the extent of the problem. Among the victims was an 82-year-old woman who handed over gold bars in a Wendy’s parking lot, a 74-year-old Bethesda resident with memory loss who was conned out of $1.1 million, and a resident of Montgomery’s Leisure World community with mental health disabilities. These cases illustrate the diverse range of individuals targeted by the scammers, who exploit vulnerabilities like age, memory issues, and mental health challenges.
Petty noted that many of the victims, despite their current vulnerabilities, had retired from highly respectable and successful careers. The psychological impact of the scam has been profound, with many victims feeling devastated and ashamed. “Ashamed is a major component of it. A lot of them have thought that ‘How could I be so stupid?’” Petty explained. Yet, the reality is that these are intelligent individuals from all walks of life who have been caught in a meticulously planned and executed scam.
FBI Supervisory Special Agent Keith Custer added that the scammers prefer their targets to buy gold bars because these transactions attract less attention than large bank withdrawals. He explained that the purchase of gold bullion can appear as a normal investment activity, which is why the fraudsters advise their victims to wire large sums of money to purchase gold. “The scammers are asking for gold because it is a transaction that looks somewhat more normal than an elderly victim walking to a bank and attempting to withdraw $50,000 in cash,” Custer said. “When looked at from the outside, the purchase of gold bullion is a normal investment activity. Lots of people want to invest in gold. So if a senior wires $50,000 to an online vendor, it looks like a normal transaction.”
According to court records, these gold bars often arrive at Montgomery County residents’ homes via parcel delivery. The scammers then convince the victims to turn over the gold for safekeeping, urging them to do so discreetly to avoid attracting the attention of supposed criminals. In some cases, the handover of the gold is accompanied by a code word like “watermelon,” adding another layer of false legitimacy to the scam.
Montgomery County’s top prosecutor, State’s Attorney John McCarthy, noted that the prevalence of these cases in the county might be partly due to the active efforts of local fraud investigators. However, he also pointed to the county’s demographics, with approximately 230,000 residents over the age of 60, many of whom have retired from lucrative careers and accumulated significant wealth. “Many have retired from great jobs, and they’ve made a lot of money in their lifetime. There’s money to be had here,” McCarthy said.
The scammers often use a pre-scam technique to identify potential targets, starting with a phishing attempt that alerts the victim to supposed issues with their computer. This might involve a pop-up on their screen directing them to download software that gives the fraudsters access to their bank account information. From there, the scammers convince their targets that they have been hacked and are vulnerable, leading them to contact supposed law enforcement agents who, in reality, are part of the scam. These fake agents then persuade the victims to move their money into gold, under the guise of aiding in an investigation of criminal rings.
Bill DelBagno, the FBI special agent in charge of the bureau’s Baltimore Field Office, described how the scam operates by shuffling victims between fake agencies, creating a convincing narrative about their bank accounts being compromised. “They shuffle you around between fake agencies about your bank accounts being compromised. The scammers are very convincing,” DelBagno said. He also provided a broader perspective on the scam’s impact, noting that the FBI’s Internet Crime Complaint Center (IC3) has received more than 250 complaints related to gold bar scams over the past 15 months, totaling about $84 million in reported losses. “And that just reflects those victims who came forth and provided that information to IC3,” DelBagno added.
The consequences of this scam are devastating, with victims losing their life savings, homes, trust, and sense of security. As DelBagno emphasized, this scam is not isolated to Montgomery County but is occurring across the United States, affecting countless individuals and communities. The FBI and local law enforcement agencies are continuing to investigate and raise awareness in hopes of preventing further losses and bringing the perpetrators to justice.