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Gold Scammers Using “Affinity Fraud” Technique

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Gold scammers are targeting Chinese-Americans, but similar techniques can be used to target and rip off other groups of people.

The scam has most recently been reported in Maryland. According to CBS Baltimore, the Montgomery County Police Department reports at least one victim lost $20,000 to gold scammers targeting people of Chinese descent.

Police term the technique being used as “affinity fraud.” The scam “relies on building trust with victims based on shared affiliations and characteristics such as age, race, religion, occupation, etc.”

The specific scam in Maryland starts with a phone call. The phone number appears as a Chinese number on caller ID. The scammer establishes a rapport and then arranges an in-person meeting. Once face-to-face, the scammers show the victim fake gold, claiming they found it while doing construction work. They claim they are undocumented, and want to sell the gold and use the money to either return to China, or to help family in that country. The scammers hook their victims through their convincing story, their shared cultural understanding, and by saying they will take less than money than the gold is worth.

If the victim requests a sample for testing, the scammer will often offer up a small sample of real gold. But if the scam plays out to its conclusion, the victim ends up with worthless fake gold, and the scammer makes off with a big chunk of cash.

According to CBS Baltimore, “the first victim gave the suspects $20,000 in cash for gold that was later determined to be fake. 49-year-old Xiaoping Yang (also known as Ziaoping Yang) and 51-year-old Yinhui Huang have been charged with theft in this case, and were previously charged in Fairfax County for the same scam.”

A second victim in Maryland avoided losing any money when she searched articles online and determined it was a scam before handing over any cash.

Police have issued warrants for the arrest of Huang and Yang.

While this particular scam targets Chinese-Americans, the same technique can be directed at any ethnic community, or other groups of people who share common bonds. For instance, overseas scammers often target Americans through international online dating sites. They establish long-distance relationships, gain trust, and then eventually ask for help getting gold out of their home countries. They will often say the metal is part of a dowry or inheritance. The gold inevitably ends up being fake, or nonexistent. Scammers spend long amounts of time setting up the scam, sometimes stringing the victim along for months before actually asking for money.

The stories scammers tell may elicit sympathy and seem legitimate, but you should always approach strangers trying to get you to hand over cash with extreme skepticism. It’s wise to remember the old mantra – if it sounds too good to be true, it probably is.

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