It's worth remembering that all that glitters is not gold -- or platinum.
On Aug. 9, the Arizona Corporation Commission (ACC) found several Arizona residents responsible for defrauding investors of $10.9 million through the sale of worthless volcanic cinders mined from Sheep Hill near Flagstaff. They falsely claimed to investors that they could extract platinum and other precious metals from the cinders through a "special" nanotechnology process.
Sales reps, who earned 25 percent commissions for their work, lured over 200 investors from 20 states. An investment of just $20,000, they claimed, could grow an astonishing 700 percent to $1 million in as little as three years.
Machines supposedly used to separate platinum from cinders were cleverly salted with tiny bits of platinum, providing false "proof" to any investor who toured the Flagstaff processing plant before they bought shares in the company.
The history of Arizona is synonymous with mining glory and deception. We are the Copper State, and our reputation for mineral wealth attracted settlers and funded our growth. However, the promise of such wealth made it easier for unscrupulous prospectors to prey upon starry-eyed investors.
We might have thought mining fraud was a thing of Arizona's past. Sadly, these scams occur even today. The cinder hills near Flagstaff are a favorite setting for swindlers' schemes. No amount of "nano-alchemy" will turn cinders into platinum. Unfortunately, many investors have been badly burned. The perpetrators of such crimes take advantage of the public's hope for financial gain, general ignorance of mining, and trusting nature.
As an elected member of the ACC, I take my role as securities regulator very seriously. The ACC welcomes and investigates tips about investment schemes, and it works diligently to punish con men and enforce restitution to victims. To avoid becoming a victim, check out any investment proposal by contacting the Arizona Corporation Commission's (ACC) Securities Division at (602) 542-4242, or toll-free at 1-866-VERIFY-9. If you have any other questions, contact me at (602) 542-3625.