Ukraine scammed out of $300,000 with counterfeit gold

Ukraine's central bank has been defrauded of $300,000 by buying gold bars that turned out not to be genuine, according to the report Russia Today. Instead of pure gold, it turned out to be bars of lead, concealed under a layer of gold-coloured paint. The news was first reported by the Ukrainian Ministry of Foreign Affairs.

Although it is a relatively small amount (less than an LBMA 'Good Delivery' bar of 400 troy ounces), the reputational damage to the central bank is considerable. The Ukrainian police have launched an investigation to find out who may have been involved in this rogue practice. There are indications that there was someone working within the central bank who had ties to the criminals and who would have helped falsify the necessary documents. It also turned out that the central bank was not very meticulous in registering the staff who walked in and out of the bank.

Since the discovery of these scams, the central bank has not bought gold in this way. It is hard to imagine that a central bank would go so wrong with buying gold, especially since the quality of the counterfeits was low. Gold has a much higher density than lead, which means that the dimensions and weight of the counterfeit bars does not correspond to that of an authentic specimen. Also, a test with ultrasound sounds would give a quick answer. See also the following video from Goldmoney.

Where is Ukraine's gold?

In November, part of Ukraine's gold reserves were withdrawn from the central bank's vault. Where this gold has gone remains to this day unclear. Some claim that the precious metal was flown to the United States for "security reasons." This is said to have happened shortly after a meeting between Ukrainian Prime Minister Arseniy Yatsenyuk and US President Obama.

In October and November, the country had to sell part of its gold reserves, reportedly to strengthen its foreign exchange reserves. The country has been plunged into a serious crisis since the revolution and the Russian invasion of Crimea, with pro-Russian and pro-European groups fighting each other. Earlier this year, several cities in eastern Ukraine were bombed by the army, resulting in numerous civilian casualties. Since then, the value of the currency has fallen, inflation has been high and the gas bill could no longer be paid.

Ukraine scammed out of $300,000 with counterfeit gold