SAN FRANCISCO—San Francisco District Attorney George Gascon announced on Friday, February 16 that the Chinese Gold Scam also known as the Buried Treasure Scam is targeting residents in the region.
“This is a special time of year for the city’s thriving Chinese community, but it’s also a time of year where we’ve seen scams targeting this population occur with more frequency,” said District Attorney George Gascón. “The Chinese Gold Scam has been attempted in San Francisco unsuccessfully thus far, and my hope is that through public education we can ensure it stays that way.”
SFDA’s Special Prosecutions Unit (SPU) began looking into these types of cases in 2013 while investigating the Chinese Blessing Scam series of fraud cases. Similar to the Blessing Scam, the perpetrators of the Gold Scam have organized teams of criminals from the People’s Republic of China (PRC) who are assisted by local facilitators; and like the Blessing Scam, because of the transient nature of the teams, SFDA has been working with law enforcement and prosecution personnel from across the country and across the globe in combating these types of affinity scams that prey on our immigrant communities.
In addition to the San Francisco District Attorney’s Office, key participants in this investigation network have included the Los Angeles Police Department (LAPD), the New York Police Department (NYPD), the U.S. Department of State (DoS), the Singapore Police Force (SPF), the New South Wales Police Force (NSWPF, Australia), the Vancouver Police Department (VPD) and the Royal Canadian Mounted Police (RCMP, Canada).
The modus operandi of the Gold Scammers is consistent throughout the world, and the “gold” props they employ to deceive their victims are similar. The scam starts with a telephone call or a visit to the victim by two to three suspects. The language used has been the Chinese dialect of Mandarin, also known as Putonghua. Evidence shows that the victims are selectively targeted because of their perceived wealth since most of them have been successful business owners, professionals or public personalities who advertise or are known in the Chinese language media.
During the interaction, the suspects identify themselves as poor migrant laborers from Mainland China in need of help from a local who speaks their language and is generous enough to lend assistance. After conducting research on their victim, one of the suspects identify himself or herself with the same last name as the victim and suggests they have common ancestors to gain the victim’s trust. The scammers share a story in the host country to work in construction, and during excavation they found a buried container which held a large amount of solid gold ingots (yuen bo) and/or solid gold Buddha statues along with a handwritten note. The note is written in Chinese, and the scammers appeal to their victim’s goodwill by stating they are illiterate and need help from a trustworthy and prominent person to interpret the writing.
According to a press release from the SFDA’s Office, a meeting is conducted so the victim can inspect the gold and read the note. The victim is show a variety of gold pieces. The note, which is distressed to suggest it is very old, introduces its writer as someone who was living in the host country decades ago (1800s to 1940s) and begs the finder to locate the writer’s son in Mainland China, give him one-half of the gold and keep one-half as a finder’s fee. The scammers work to convince the victim it is impossible to find the writer’s son in China, then they offer to sell the gold to the victim for a fraction of its value.
The scammers detail they are wary of bringing the gold back to China with them because they fear the port authorities will seize their treasure. Before the meeting concludes, they chip a piece of gold off one of the ingots in front of the victim and hand it to him/her for independent appraisal. The victim believes the gold is authentic, and re-contacts the scammers. They agree on a cash price and often the scammers will add urgency to the situation by stating that because their visas will be expiring in a few days, they need the funds immediately.
After the exchange is made, the victim finds discovers the ingots and Buddha statues are made of worthless yellow metal. Reported losses for the victims have ranged between thousands to hundreds of thousands of U.S. dollars.
On December 29, 2017, the RCMP contact the San Francisco District Attorney Office’s SPU to inquire about the identity of two suspects in two Gold Scam cases that transpired in Richmond, the neighboring city of Vancouver, Canada. One victim lost $26,000, while the other lost $48,000. Investigative leads provided by SFDA’s SPU, led to the identification of the suspects, Dejin Xu, a 52-year-old male PRC National who was arrested by the Denver Police Department and the Los Angeles Police Department for committing the Gold Scam in their respective jurisdictions in 2011. Further investigation revealed a second suspect, Zhong Yang, a 41-year-old male PRC National. On January 6, 2018, the RCMP arrested Xu and Yang on two counts of fraud; both men are still in police custody until trial.
On December 11, 2017, the Oakland Police Department notified indicated that merchants in San Francisco Chinatown and Oakland Chinatown relayed that they were victims of attempted Gold Scams. The merchants recognized the scheme and the two suspects from previous articles on a Special Bulletin that was published by the Los Angeles Sheriff’s Department (LASD) in early November 2017. The bulletin detailed the arrest of two male suspects in the 500 Block of N. Grand Avenue in Walnut, California on October 27, 2017 with photographs of the two suspects, a photograph of the “found” note and two photographs of the “found” treasure.
According to LASD records, the two suspects were convicted of theft and released from jail on or about November 2, 2017. The San Francisco District Attorney’s Office is informing victims and witnesses of the Gold Scam to contact SFDA’s Special Prosecutions Unit. Anyone with information can leave a message at (415) 551-9595, press 3 for Cantonese and press 4 for Mandarin, and an investigator who speaks the corresponding dialect will follow up.