After counterfeit gold arrest, Nevada County residents hurry to verify gold, silver
March 10, 2015
There's been an uptick in customers visiting local gold and silver dealers over the past week or so — but they're not looking to buy or sell.
The arrest last week of the owner of Grass Valley Gold and Silver on fraud charges has set off a different kind of gold rush in the area, as people flock to dealers to check the authenticity of their precious metals.
Gregory Arnoldi, 46, was arrested Feb. 26 on three felony counts of possessing and selling more than $175,000 in fraudulent gold bullion bars out of his Mill Street storefront on two separate occasions last April.
Arnoldi was released after posting $100,000 bail, but was arrested again the next day on charges of ongoing criminal activity related to counterfeit gold and silver transactions after several additional victims came forward, according to the Nevada County District Attorney's Office. Bail was set at $1 million; as of March 6, Arnoldi remained in the custody of the Nevada County Sheriff's Office.
The day after Arnoldi's initial arrest, the line at Sierra Gold & Coin on West Main Street was out the door, said owner John Englehardt.
"This place was a zoo," he said.
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Englehardt estimated that since Feb. 27, about 30 people have come through the doors of his business asking him to test their gold or silver, which he does using an x-ray machine that reveals the composition of the object.
Judy Ellis, the owner of Gold Country Mine in Nevada City, said she's also noticed more customers coming into her store on Searls Avenue to have their pieces checked.
Ellis said she tests gold by rubbing the piece gently against a special surface — which does not damage the metal — and then using a specially-formulated acid on that metal residue to check authenticity.
"There's been a few more people that were concerned whether items that they'd owned or purchased recently were actually gold," Ellis said.
She said news of Arnoldi's arrest has motivated people to check bars, coins, jewelry and other items, regardless of whether they've done business with Arnoldi.
"It's brought it to the top of everyone's mind," Ellis said.
Ellis said that, with the exception of one coin she wasn't able to verify, she has not discovered any instances of fraud. Englehardt has some customers who haven't been so lucky; he discovered between six and eight different pieces of fake gold or silver after customers brought them into his shop.
" A lot of people had a lot of bad stuff," Englehardt said.
One of those people was a 68-year-old customer, who didn't want to provide his name.
The Grass Valley resident, who mines gold in the area, said he was a longtime customer of Arnoldi's. When he heard about Arnoldi's arrest, he had 30 one-ounce silver bars and four 10-ounce silver bars checked by Englehardt as a precaution. Four of the one-ounce bars turned out to be fraudulent.
The customer said compared to those who lost significant amounts of money, his loss of $85 was minimal.
"I dodged a bullet," he said, adding the charges against Arnoldi won't deter him from doing business with other dealers in the area — something business owners said was a concern after hearing about Arnoldi's arrest.
Ellis said while she has a loyal set of customers who trust her business, she could see how the incident might give people pause about patronizing other local gold and silver businesses, no matter how reputable they are.
"If you were getting engaged and your local jewelry store had been selling fake jewelry, would you go there? Would you go to the jewelry store next door?" Ellis said. "Probably not, until things settle down."
Englehardt agreed that the news of Arnoldi's arrest may make residents "gun shy" about buying or selling precious metals in the immediate future, but said his business hasn't experienced any fallout.
"Our regular customers still come in and buy and sell," he said.
He's posted pictures of fraudulent gold and silver pieces to a bulletin board on a wall in his store to help alert customers to what counterfeit metals may look like.
He said the best thing people can do if they are concerned about their pieces is have them tested; he said his shop will continue to test for free.
"That's the only way they're going to sleep at night," Englehardt said.
To contact Staff Writer Emily Lavin, email email@example.com or call 530-477-4230.
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