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How to NOT peddle a fake gold bond

How to not peddle a fake gold bond.

Peter Johnston was 54 years old when, in August 1996, he was convicted in England of fraud . Sentenced to two years, he served twelve months in Ford Open Prison before returning to his native Australia to live. Prison was a desultory experience for Johnston, and aggravated by his innocence. The City of London Fraud Squad, acting in concert with two large gold banks, brought the charge of fraud against him. The banks were the Union Bank of Switzerland, Zurich, and the London branch of Australia’s Westpac Banking Corporation.[ii]

Johnston’s crime had been to deposit a gold certificate in the City branch of Westpac for “safe custody” on 15 February 1995. He did not attempt to have Westpac negotiate or otherwise attest whether the certificate — apparently issued by the Union Bank of Switzerland, Zurich – was genuine and even agreed to allow the bank to append a disclaimer on the safe custody receipt as to the value of the documents. It was a straightforward case of securing documents in the vaults of the bank for a brief spell while travelling abroad. By the official standards of the London Gold Market, the certificate represented quite a large cache of gold at 740 metric tonnes.[iii] At slightly more than $300 an ounce, this translated into a market value of approximately US$8 billion, large enough to make eyes pop.


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