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Howard Ain, Troubleshooter: Scheme selling precious metals online

Updated: Monday, May 26 2014, 10:50 PM EDT
CINCINNATI (Howard Ain) -- You always have to be careful when  buying items over the internet.

That's especially true when buying precious metals online.  Local 12 Troubleshooter Howard Ain unravels a scheme that promised big rewards but wound up costing customers millions.  It is the story of how one con man was able to string along his victims and walk away with millions of dollars.  It was a very elaborate scheme.

Raymond Campbell, a US Postal Inspector, said, "It did actually begin as a legitimate business."
 
But the owner of Global Gold and Metals Trading made a wrong turn and swindled more than $6 million dollars from customers trying to buy precious metals online.
 
Campbell said, "He was selling products at below market value.  He was selling it at a discounted rate, which ultimately attracted the consumer to purchase from him, but he couldn't sustain that."
 
Postal Inspectors say Earl Mohammed was making good on the first several orders to gain his customers trust.  But once they put in a more sizable order he would claim the package was sent.  Authorities say that was a lie.
 
Campbell continues, "What he did is he provided the consumer with a postal service tracking number, he would actually pay postage for the tracking number and he would tell them it was en route.  Ultimately it would never arrive at the consumer's home or residence.  They would call Mr. Mohammad, ask where the items were and he would say the postal service lost them."
 
Postal Inspectors say the excuses were Mohammed's way of "buying time" for new money to come in.  Another excuse, he'd claim he filed an insurance claim but it would take time to get the consumer a refund.
 
"Consumer fraud actually became a ponzi scam.  He was using new customer money to repay old customers that were still awaiting their precious metals," Campbell said.
 
Inspectors say the average investor lost between $50 and $75,000.  Many of the individuals invested their life savings and retirement funds.  Postal Inspectors are still working to locate funds, they suspect there may be concealed funds.
 
Fact: all investments carry risk.  Inspectors say do your due diligence, "Research the company you are going to do business with.  Secondly, if you believe you've been scammed, make sure you report it to law enforcement," Campbell said.

Earl Mohammad pleaded guilty to mail fraud and was sentenced to nine years in federal prison.  He will also have to repay 6.5 million dollars in restitution.



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