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goldmoney.com scam, goldmoney scam, goldmoney.com fraud, goldmoney fraud, problems, compaints

No Evidence Of GoldMoney.com Scam Fraud Complaints Or Problems

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NO APPARENT GOLDMONEY.COM SCAM OR GOLDMONEY FRAUD

The likelihood of either a GoldMoney scam or GoldMoney fraud is extremely unlikely. GoldMoney was established in 2001. In my research I have found no substantive problems or complaints.

As I understand, there has been neither a successful GoldMoney scam or fraud carried out by the company or a nefarious individual. As a result, neither the company nor customers have lost any funds to a GoldMoney.com fraud or a GoldMoney scam.

In my research I have found several likely reasons including the way funds are received from and dispersed to customers, strong corporate governance, intense government regulation and rigid compliance to applicable law.

WHAT IS GOLDMONEY?

NO EVIDENCE OF ANY GOLDMONEY SCAM

Outspoken critic of ‘paper gold’ Adrian Douglas of GATA warned, “What should investors do? Investors need to do their due diligence. They need to determine if they are actually holding a 100-percent precious-metal-backed investment. There are some unallocated investment vehicles that are entirely honest where all the gold and silver sold is actually purchased and held on behalf of the customers. One such example is GoldMoney.com, which conducts and publicizes third-party audits to verify 100-percent backing.”

There appears to be no GoldMoney scam being perpetrated by either the company or any GoldMoney account holders. A review of the GoldMoney.com cash processes reveals that the company deals only with bank wires from verified customers who are rigiousrly screened under applicable Know Your Client and Anti-Money Laundering regulations to prevent a GoldMoney scam. Consequently, for anyone engaged in criminal behavior it would be very difficult to carry out a GoldMoney.com scam anonymously or even a strong cloak of their identity.

A GoldMoney review is conducted under a Statement on Auditing Standard 70 Type II audit performed by a Big Four accounting firm. GoldMoney.com is regulated by the Jersey Financial Services Commission under the Financial Services Law (Jersey) 1998.

In my interview with their management I have found that because of these regulations, which carry criminal penalties, GoldMoney has no tolerance for pyramid or Ponzi scams which are illegal in most countries because they are built on a solid foundation of rules and ethics that are strictly adhered to in order to avoid criminal liability and those rules of corporate governance are enforced by regular audits and government regulators.

NO EVIDENCE OF ANY GOLDMONEY.COM FRAUD

Neither the company nor GoldMoney account holders appear to be engaged in any type of GoldMoney fraud. Being able to perpetuate a fraud would be extremely difficult because of the reasons cited earlier and the strong corporate governance which has properly segregated duties, the regular auditing by a Big Four accounting firm, the ability of customers to demand physical delivery of bullion at any time, regular online reporting of bullion holdings, immediate access to accounts via the Internet and an otherwise completely transparent system.

GOLDMONEY DOES ULTRASOUND GOLD TESTING

As of October 2010 GoldMoney begun using ultrasound scanning technology to verify that each of the gold bars we store for you is free of foreign materials and defects. Any bar that fails the ultrasound test is melted down, assayed and then recast into a new bar. We aim to complete the scanning of all gold bars in the first quarter of 2011.

The quality test is performed using an ultrasound scanning device, developed by General Electric Inspection Technologies (GE). The test is carried out directly within our vaults. It is the same technology used to assure personal safety in the medical and aviation industries.

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SAS 70 TYPE II AUDIT

SAS 70 stands for “Statement on Auditing Standard 70“, and has been developed and is maintained by the American Institute of Certified Public Accountants. A report is generated by an outside auditor that assesses the internal controls operating within a company and verifies the controls are in place.

Examples of controls could be “dual signatures are required for all payments above $10,000 in value” or “error log files are reviewed by IT staff at least once a week”. Therefore, a SAS 70 report lists the controls in operation within an organization, as verified by the auditor.

The Type II report is more substantial because it does not only assess the controls in operation but also includes the auditor’s opinion of the effectiveness of the controls. Thus the Type I report simply lists the controls whereas the Type II report also tests the controls to confirm they are working effectively.

The audit report is available free of charge to GoldMoney account holders but they are not privileged to share it which is a reason I have not provided a link to a copy of the report. I have come across this before with other companies and the reason this report is not publicly available is probably to reduce the scope of the Big Four’s malpractice liability with regards to who can reasonably rely on the audit report.

CONCLUSION ABOUT GOLD MONEY SCAM OR GOLD MONEY FRAUD

I have been unable to find any evidence of either a GoldMoney.com scam or GoldMoney.com fruad. Because of the meticulous regulation, precise corporate governance, inflexible compliance with applicable law, regular audits, transparent system and ultimate check of customers being able to demand physical bullion at any time therefore I do not think it is very likely for a GoldMoney.com scam or GoldMoney fraud to be committed.

If someone were to attempt to perpetuate a GoldMoney scam or fraud then it would likely be discovered very quickly and prevented. I have been a customer for several years and have had no problem. Additionally, I have heard of no GoldMoney problem or complaint from any of my thousands of readers. I would be very quick to spread the word if there were a complaint or problem with GoldMoney.

Therefore, in my opinion GoldMoney is a safe institution for an investor’s capital.  If you have used this service then please leave your comment.

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5 comments

ABOUT THE AUTHOR: Trace Mayer, J.D., author of The Great Credit Contraction holds a degree in Accounting, a law degree from California Western School of Law and studies the Austrian school of economics. He works as an entrepreneur, investor, journalist and monetary scientist. He is a strong advocate of the freedom of speech, a member of the Society of Professional Journalists and the San Diego County Bar Association. He has appeared on ABC, NBC, BNN, radio shows and presented at many investment conferences throughout the world. This is merely one article of 240 by .
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{ 5 comments… read them below or add one }

1 John Duffy April 7, 2011 at 3:26 pm

My financial advisor saw an article or link somewhere that suggested or implied or speculated that GoldMoney or its vault operator, VIA MAT may be involved in some sort of opaque, unregulated lending of its gold holdings unbeknownst to its gold holders.

In other words, the gold doesn’t go anwhere, but the title is surreptiously transferred. When a holder whose gold has been leant wishes to liquidate his position it’s dependent on GoldMoney then buying more gold to cover the liquidation.

I’ve seen no mention of this as a potential scam. Do you know if such a charge has ever been made or investigated? If this were occurring, it would debunk GoldMoney as a safe repository for owners’ gold and liken it to a bank or ETF that makes fractional loans on deposits.

It would also be fraudulent, would it not? They surely couldn’t be lending out someone else’s property?

2 Trace Mayer, J.D. April 7, 2011 at 11:38 pm

Hi John,

While I do think such behavior is going on the in the gold market, particularly with unallocated gold accounts at bullion banks, I think such behavior is highly unlikely given the way GoldMoney is setup with its governance controls. All the bullion bars have LBMA chain or custody and chain of integrity. There is segregation of duties between the Trust Company, GoldMoney and the vault operator(s). There are extensive audits done that are to the highest standards possible, SAS 70 Type II, and the auditors include some of the most reputable firms in the industry such as Inspectorate. Plus, they actually physically inspect the individual bars.

Sure, fraud is always a possibility but I think in GoldMoney’s case it is highly improbable because it would require collusion between multiple highly established and respected firms along with a fraud being fairly easy to detect given all the publicly available audit reports, etc. With LBMA membership comes indemnification agreements so being able to actually profit from the fraud would also be incredibly difficult.

3 John Duffy April 8, 2011 at 10:21 am

Trace:

Thanks for the prompt response. I basically agree with your points.

One other question.

One of the reasons given by people in the US not to own and physically hold gold here is the risk of government confiscation.

What is your view of the confiscation risk vis a vis GoldMoney? Under what circumstances, if any, would British, Swiss or Hong Kongese authorities be able to confiscate GoldMoney’s custodial holdings?

Are there any laws that allow and/or prohibit this?

Much of the rationale for storing precious metals in an offshore vault derives from the threat of domestic confiscation risk. To be facing the same potential risk overseas would be troubling, especially as the gold and silver are out of one’s immediate control.

Any views?

4 Trace Mayer, J.D. April 8, 2011 at 11:09 am

I wrote earlier about why I do not think gold confiscation, except through taxes like the 28% collectible capital gain tax, is a very high probability in the United States much less England, Switzerland or Hong Kong. It should be noted that the US Mint produces gold, silver and platinum coins are legal tender in the United States. Even if there were confiscation within 24 hours you can convert via GoldMoney all gold into silver or platinum or palladium.

Additionally, I think it would be extremely wise if GoldMoney were to increase the jurisdictions they are regulated in because that would further reduce political risk by creating jurisdictional regulation redundancy. I am unaware of the current state of confiscation laws, etc. in these different countries but have not heard anything reputable about any potential confiscation laws being passed. The circumstances would be what governments always base their ultimate decisions on: their ability to use violence to force their will. But I have written extensively about why the return on investment from violence is declining in the Information Age.

In my opinion I think the gold confiscation issue is mainly raised by numismatic coin dealers to sell over-priced high premium coins. Sure, it is possible but I do not think it is probable. In fact, I think it is more probable that gold will be reintroduced into the world monetary system at the national or supranational level as Robert Zolleck has already talked about in the FT article. The discussion has started and the gold rush began years ago.

5 John Duffy April 8, 2011 at 11:53 am

Again, thanks for your response, and I find what you say reasonable.

I also consider gold’s being reintroduced into the global monetary system a distinct possibility and, obviously, would welcome it.

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