Economic Downturn Leads to Gold Scams NR09228jr

May 8, 2009

Los Angeles:  Los Angeles Police Department detectives are strongly discouraging the selling of gold and other valuables to unlicensed brokers.                                                                                                                                                            
Numerous "businesses" have advertised on television, radio, local newspapers and flyers, offering to buy items of gold from the public.  Often these "fly by night" operations set up temporary shops at hotels or offer to have "gold parties" at residences.  In the State of California, anyone who conducts these types of activities is considered to be a "secondhand dealer" and must have a license.

The California Business and Professions Code defines a secondhand dealer as  "Any person, partnership, firm, or corporation whose business includes buying, selling, trading, taking in pawn, accepting for sale on consignment, accepting for auctioning, or auctioning secondhand tangible personal property."  Gold jewelry is considered secondhand, tangible personal property.

It is a crime to conduct business as a secondhand dealer without a State license.  Some cities, including the City of Los Angeles, require an additional license.  The State Attorney General’s Office has determined that gold jewelry constitutes a significant class of stolen goods; and therefore, gold purchased from individuals must be reported on State approved forms to the Police or Sheriff Department.  The purpose of these laws is to provide law enforcement with the ability to identify crime suspects, victims of crimes, and to facilitate the return of stolen property to its rightful owner.

Detective Reginald Jackson stated, "Burglaries are sure to spike if we do not put a stop to these unregulated sales."  He added, "Many brokers, including mail order brokers, are preying on those who are uninformed or just plain desperate.  Often times these outfits pay far below the gold’s actual value."  The Los Angeles Police Department has determined that these gold buying schemes are also allowing criminals to sell stolen goods.  An arrest was made by Commercial Crimes Division of one such gold buyer in March 2009.  The District Attorney has filed two felony counts of receiving stolen property against Duane Maccagonone.  He is 52 years of age and from Clintontownship, Michigan.

Anyone with additional information on illegal gold buying or selling schemes should contact the Los Angeles Police Department Pawnshop Detail at 213-485-2524.  During off-hours, telephone calls may be directed to a 24-hour, toll-free number at 1-877-LAPD-24-7 (527-3247).  Callers may also text "CRIMES" with a cell phone or log on to and click on Web tips. When using a cell phone, all messages should begin with "LAPD."  Tipsters may remain anonymous.