Gold-Plated Crime? Gold-Buying Parties Face Legal Scrutiny
Source: Roanoke Times, Jenny Boone (4/17/11)
"National gold buying companies are hiring representatives to arrange home parties to buy gold and other precious metals."
"Are you serious?" Cupka asked. "Oh, my gosh! Oh my gosh!"
As the price of gold climbs, national gold buying companies are hiring representatives throughout the country to arrange home parties to buy gold and other precious metals.
But gold-buying shindigs are facing scrutiny from the Better Business Bureau, and some law enforcement officials say that such gatherings are illegal, based on their interpretations of the state law that governs dealers of precious metals.
Dealers must hold a license to buy precious metals, and they must conduct business from a fixed and permanent location listed on their license, such as a retail store. They also must collect ownership information and provide a copy of the bill of each sale to law enforcement, among other regulations. Violation of the law is considered a Class 2 misdemeanor.
Home gold-buying parties, which change addresses constantly, are not an exception, Roanoke County Sgt. Jeff Herrick said.
John McNeil, an assistant commonwealth's attorney in Roanoke, agreed. "The law is pretty clear," he said.
But law enforcement officials said they have not determined how to regulate these parties. Tracking these events could be challenging, Herrick said.
Norman Bean, a top executive of the Gold Refinery, which has an address registered in Michigan, argued that the company's business is legal because its parties are private gatherings, not public events.
Gold parties also can be lucrative for hosts. Hosts receive 10% of the sales at each Gold Refinery party and 5% of sales from other parties that are booked through their own.