An elderly New York woman had already handed scammers $157,000 worth of gold when they came back asking her to do it again.
The Watertown woman was told that her identity had been compromised and that she needed to move her financial assets into gold to protect them, according to WWNY-TV. She bought $157,000 in gold bars and coins and turned them over during a meeting at a city gas station.
Then came another demand for $157,000 in gold. This time, a family member warned her that she was likely being scammed, and Watertown police became involved before a second six-figure handoff could occur.
Investigators replaced the expected gold with fake coins and staged a sting involving local and federal agencies. Police arrested Weifu Cai, 43, and Wenping Chen, 35, after the package was collected. Importantly, police say the two men were not the people who received the woman’s original $157,000 in gold.
A Caller Claimed to Be From the Federal Trade Commission
The scheme began in June when the woman received a phone call from someone claiming to represent the Federal Trade Commission. Police said the caller convinced her that her identity had been compromised and that she needed to protect her financial assets. The supposed solution was to remove money from the banking system and convert it into gold bars and coins.
She followed the instructions and went to a Watertown jewelry store, where she purchased $157,000 worth of gold. She later met men at a gas station in the city and handed over the precious metals.
The First $157,000 Was Already Gone When the Scammers Asked for More
The first delivery did not end the demands. The people communicating with the woman told her they wanted another $157,000 in gold.
She returned to the jewelry store and placed a second order for the same amount. Part of that order had already been filled when a family member recognized what was happening and warned her that the instructions appeared to be part of a scam.
Watertown police received the fraud complaint on Aug. 5. Unlike the first transaction, investigators now knew in advance that another collection was expected, giving them an opportunity to intervene before the second batch of gold disappeared.
Police and Homeland Security Investigations Planned a Sting
Watertown police contacted Homeland Security Investigations after receiving the complaint. Authorities said the type of fraud was known to operate nationally and had international implications.
The Watertown Police Department and HSI spent about a week preparing an operation with the Jefferson County Sheriff’s Office, New York State Police and U.S. Customs and Border Protection.
Investigators knew that simply canceling the handoff might preserve the woman’s remaining money but leave them without an opportunity to identify whoever arrived to collect it. Instead, they prepared a package that would allow the transaction to appear to continue.
Police determined that the people expected to collect the package were likely traveling to Watertown from New York City. Undercover officers from multiple agencies were positioned around the planned meeting, and authorities also used a drone to monitor the exchange.
The Package Contained Fake Gold Coins
Instead of putting the woman’s second $157,000 order into the package, investigators substituted imitation gold coins. Police said the fake coins were packaged to resemble the materials used during earlier meetings.
The goal was to allow the expected collector to take possession of what appeared to be another valuable shipment while protecting the woman’s actual assets. The strategy also allowed officers to observe who arrived, what vehicle they used and what happened after the package changed hands.
This was no longer an ordinary fraud report involving money that had already vanished. Investigators were watching an anticipated pickup unfold in real time.
Police Arrested Weifu Cai After He Took the Package
Police said Cai took possession of the package and then walked toward a vehicle at 1255 Arsenal Street. Officers moved in and arrested him before he could leave with it. Chen was waiting inside the vehicle and was also taken into custody.
Police impounded the vehicle and said investigators planned to obtain a warrant to search it. The available reporting did not disclose what, if anything, authorities subsequently recovered from inside. Both men were arraigned in Watertown City Court. Each faces one felony count of second-degree attempted grand larceny.
Cai and Chen Are Accused in the Second Pickup, Not the First Loss
Watertown police told WWNY that Cai and Chen were not the men who received the woman’s original $157,000 in gold at the gas station. Police described the first collectors as men from China but specifically said they were different individuals.
Cai and Chen are accused in connection with the attempted second collection involving the police-controlled package. The publicly reported charge against each man therefore relates to an attempted grand larceny rather than a completed theft of the first $157,000.
The men have been charged, not convicted, and the allegations must still be resolved through the criminal process. After their arraignments, police said Cai and Chen were in the custody of the U.S. Department of Homeland Security, which is also investigating the case.
The Scam Matches a Fraud Pattern the FBI Has Warned About
The FBI’s Internet Crime Complaint Center has specifically warned about schemes in which criminals persuade victims, many of them older adults, to liquidate savings and purchase gold, silver or other precious metals.
The scammer may pose as a government employee, technology representative or financial institution and claim that the victim’s accounts have been hacked or are about to be stolen. The victim is told that moving the money into precious metals will keep it safe.
Once the purchase is completed, a courier is sent to retrieve the gold at the victim’s home or another meeting place. Criminals sometimes supply a password or other supposed security procedure to make the exchange appear official.
The FBI reported more than $55 million in aggregate losses from this type of cash-and-precious-metals courier activity between May and December 2023 alone.
The FTC Will Not Tell You to Buy Gold to Protect Your Money
The fact that the caller claimed to represent the FTC provides one of the clearest ways to recognize what happened in Watertown as fraudulent. The FTC says real government agents do not instruct people to buy and deliver gold bars.
If someone claiming to represent the FTC says an identity or bank account has been compromised, end the unexpected conversation. Do not use a phone number, website or contact information supplied by the caller. Verify the situation independently through the agency’s official website or through the financial institution involved.
Do Not Hand Cash or Gold to Someone Sent to Collect It
The FBI says legitimate businesses and the U.S. government will not send someone to collect cash or precious metals as a way of protecting a person’s accounts. Contact local law enforcement before the planned meeting and explain what happened.
Anyone who has already purchased precious metals should also tell the dealer why the purchase was made if the instructions came from an unexpected caller. A bank or coin dealer who understands the surrounding story may recognize warning signs that would not be apparent from the size of the transaction alone.
Reports involving online or telephone-enabled fraud can be submitted to the FBI through IC3.gov and to the FTC through ReportFraud.ftc.gov. Watertown police also asked people who have been instructed to exchange their money for gold coins to contact the department at 315-786-2601 and ask for Sgt. O’Hearn.