Mining fraud still exploits the gullible
RENO – One part of the Old West that hasn’t died yet is the mining swindle.
With Nevada mines among the world’s leading producers of both gold and silver and the state a leading U.S. producer of magnesite, barite and mercury, the Nevada Attorney General’s Office says crooks pushing phony mining schemes are never far behind.
“Unfortunately, that makes Nevada a prime target for mining investment fraud, which has resulted in consumers being swindled out of millions of dollars,” said Deputy Attorney General Matthew Gabe.
The Attorney General’s Bureau of Consumer Protection says investors have to check things out carefully before putting their money into the Nevada mining industry. That means verifying that the dealer of stock is legitimate. Legitimate mining stocks are sold by legitimate dealers who don’t normally solicit by phone or mail.
The firm involved should be registered with city, county, state and even federal agencies, and the mine must have necessary permits if it is legitimate.
Gabe said the oldest scam is a claim that someone has a new or secret process for finding and refining precious minerals.
“Processes used by mining companies to extract precious metals are well known,” he said.
And he warned that precious metals almost never mix, so claims that a mining site has high levels of platinum as well as gold and silver are usually an indication the deal isn’t what it’s billed as. He added that platinum group metals haven’t been mined in Nevada since 1919.
Another indicator of fraud is “guaranteed” high returns over a short time period.
Anyone who thinks they have been a victim of mining investment fraud should contact the state’s securities division at 486-2440 in Las Vegas. Information on mines in Nevada is available from the state Division of Mineral web site at http://www.state.nv.us/minerals/ or from the Nevada bureau of Mines and Geology web site at http://www.nbmg.unr.edu