Consumer Alert: Buying precious metals online could cost you - KTIV News 4 Sioux City IA: News, Weather and Sports

Consumer Alert: Buying precious metals online could cost you

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Earl Mohammed swindled more than $6 million from customers trying to buy precious metals online. Earl Mohammed swindled more than $6 million from customers trying to buy precious metals online.
Earl Mohammed began a legitimate online business selling precious metals at below market value. He made good on his first several orders before turning the sales into scams, paying old customers with new customer's money and weaving a web of lies before he was caught.

"It did actually begin as a legitimate business," says Raymond Campbell, a U.S. Postal Inspector.
 
But Earl Mohammed, the owner of Global Gold and Metals Trading, made a wrong turn and swindled more than $6 million from customers trying to buy precious metals online.
 
"He was selling products at below market value," says Campbell. "He was selling it at a discounted rate, which ultimately attracted the consumer to purchase from him, but he couldn't sustain that."
 
Postal inspectors say Mohammed was making good on the first several orders to gain his customers trust, but once they put in a more sizable order, he would claim the package was sent. Authorities say that was a lie.
 
"What he did is he provided the consumer with a postal service tracking number," says Campbell. "He would actually pay postage for the tracking number and he would tell them it was en route. Ultimately, it would never arrive at the consumer's home or residence. They would call Mr. Mohammad, ask where the items were and he would say the postal service lost them."
 
Postal inspectors say the excuses were Mohammed's way of "buying time" for new money to come in. Another excuse he used is that he would say he filed an insurance claim, but it would take time to get the consumer a refund.
 
"Consumer fraud actually became a Ponzi scam," says Campbell. "He was using new customer money to repay old customers that were still awaiting their precious metals."
 
Inspectors say the average investor lost between $50,000 and $75,000.
 
"A lot of these individuals ended up invested their life savings and retirement funds," says Campbell. "There were several homes that have now been foreclosed on. We are still working to locate funds. We suspect there may be concealed funds."
 
But postal inspectors warn that all investments carry risk and inspectors say to do your due diligence.
 
"Research the company you are going to do business with," says Campbell. "Secondly, if you believe you've been scammed, make sure you report it to law enforcement."

Earl Mohammad pleaded guilty mail fraud. He was sentenced to nine years in federal prison and will have to repay $6.5 million in restitution.

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