How the Scammers Behind Virgin Gold Mining Corporation Bit Off More Than They Could Chew (I)

By Richard Smith

The mark is permitted to win some money and then persuaded to invest more. There is an “accident” or “mistake,” and the mark loses his total investment. The operators then depart in a ceremony that is called the blowoff or sting. They leave the mark but take his money. The mark is expected to go on his way, a little wiser and a lot poorer.

Sometimes, however, a mark is not quite prepared to accept his loss as a gain in experience and to say and do nothing about his venture. He may feel moved to complain to the police or to chase after the operators. In the terminology of the trade, the mark may squawk, beef, or come through. From the operators’ point of view, this kind of behavior is bad for business. It gives the members of the mob a bad reputation …In order to avoid this adverse publicity, an additional phase is sometimes added at the end of the play. It is called cooling the mark out. After the blowoff has occurred, one of the operators stays with the mark and makes an effort to keep the anger of the mark within manageable and sensible proportions… An attempt is made to define the situation for the mark in a way that makes it easy for him to accept the inevitable and quietly go home.

On Cooling the Mark Out, Erving Goffman (h/t Lambert)

VGMC are the great fuckers and suck public money.

Amin Shah, VGMC Singapore Facebook page


Evidently Mr Shah has not yet been cooled out.

Virgin Gold Mining Corporation (VGMC) is a big international gold-themed pyramid fraud. If you are unfamiliar with the term, many (including me) often call these things Ponzis, though in truth Ponzis are slightly different in structure, and tend to be more durable.

The whisper number around the VGMC fraud is $2Bn, and, though there could easily be a hefty dose of hype in there, it is easy to construct a plausible tally of thousands of bilked investors, each facing losses ranging from tens of thousands into the millions. The basic story of VGMC is completely generic, and can be told via a few forum postings; the unusually convoluted aftermath is interesting, and will get a more detailed treatment in forthcoming posts in this mini-series.

Here’s an excerpt from a posting from March 2010:

Virgin Gold is undertaking an exercise of issuing fresh Convertible Preferred Stocks (CPS) and invites willing investors worldwide to take up this offer.

The offer price starts at $0.80/share on 1 January, 2010

– CPS stockholders get fixed monthly shareholder dividends 10%. These are paid in ounces of gold, which are freely convertible into monetary value at the spot gold price.

– CPS holders may unsubscribe their shares by giving 45 days’ notice to the company.

– CPS holders are given capital and an interest free account in which to hold paper gold up to 3 times their share subscription value. Another great opportunity to further increases their medium to long term return.

– CPS holders may convert their shares into Common stock when Virgin Gold chooses to go public. If they choose not to do so, CPS holders will be refunded according to their subscription amount.

– CPS holders may even enjoy other incentives for referring new shareholders to the company

1)Any shareholder who currently subscribed to a minimum of 1,000 Virgin Gold Convertible Preferred Stocks (VGCPS) is eligible to refer new shareholders.

Referrers will be rewarded 10% of bonus shares based on the amount of shares their referrals subscribe to.

2)Group Bonus is calculated based on accumulated current month Convertible Preferred Stocks(CPS) of both groups. The accumulated volume is paired and paid at every 10,000 shares interval.

10,000 to 100,000 CPS pairing is paid USD1, 000(10%) per interval.

Pairing above 100,000 to unlimited/infinity are paid USD300 (3%) per interval.

By the end of the same month, someone is warning, futilely, that it’s a scam. But the denouement is delayed; there is another two and a half years of promotion on that forum, and others.

By the end of 2012 or mid 2013, VGMC  has a very impressive  geographical footprint, on Facebook pages, blogs, and bulletin boards: Egypt, Dubai, Singapore, Brunei, Indonesia, Malaysia, Thailand, the Philippines, Japan, and both Hong Kong and mainland China. Judging by this ASIC warning, it’s put in an appearance in Australia too, and there are even training sessions for promoters, run by some idiot from southern Africa, at the Ritz in London.

With (purportedly and plausibly) thousands of investors across the Middle East and Asia, and a very high, very lively social media profile, it’s pretty clear that cooling the marks out is going to take a lot more planning and organisation than usual.

So it’s interesting to see that a fellow called Roland Hurni-Gosman starts appearing at VGMC promotions in late 2012. Here he is, styled as the CEO of another gold mining operation, AGMAC, meaning Asia(n) Gold Mining Asset(s) Corporation, on video, at a VGMC shindig in Singapore in December 2012.

What is the point of the real and visible Mr Hurni-Gosman and AGMAC? From archives of the AGMAC web site, it seems to be to introduce a new twist to the scam: a stock market flotation of VGMC’s non-existent gold mining assets. A complainant at Scambook fills in the details:

Virgin Gold Mining Corporation (VGMC) started the marketing of a Convertible Preferred Stock (CPS) since 2010 with a view to go for public listing in 2014.During this time shareholders were eligible for a monthly dividend of One ounce of Gold per 10,000 shares and had the right to unsubscribe their shares and receive their investment back in 45 days, however in Oct 2012 they suspended this scheme and advised all shareholders that the portfolio had been shifted to a closed end fund of AGMAC (Asia Gold Mining Asset Corporation) and initiated a new scheme of CPS for Platinum and Silver shares with the same structure and expected IPO listing of 2016. Now once again the company on 5th June 2013 suspended all the accounts and dividends for all shareholders of Platinum and Silver and we had been left with no information in regards with the future of this scheme. The marketing method used for this scheme was a Ponzi / Pyramid marketing with 10% direct commission for referral.

I had personally lost $350,000/ on this scheme and urge any consultant, law firm, regulators who have more information on this company to assist us by providing more details for recovering our funds through legal channels.

Ah yes, the blowoff has  finally arrived, though in the digital age, it isn’t all that ceremonious:

Hi, today is first day on month, usually we can withdraw our devidend to our local bank account (the only day we can withdraw once in a month) Last month on some country there was failure on financial management with effect return dollar to shareholder account (failed to withdraw after 20 days or 10 days works as they promise).

But today we can”t login our vgmc account


Dear Shareholders:

Management is glad to inform all shareholders that the listing of CPS-GOLD, CPS-PLATINUM and CPS-SILVER will take place within the next 3 months. We cannot guarantee the share value at this time, but we expect our listed company share to trade between USD3.00 – USD4.50 by September 2013.

Our financial team is currently working with our external auditors to complete the final audit of our accounts that will be submitted to the corresponding regulators for the purpose of obtaining final listing approval. We expect this exercise to be completed by Tuesday, 4th of June 2013.

All the details will be published in “Our Investors” section on the 5th of June 2013. Shareholders are also expected to be able to login to their online accounts on the same day. We apologize for the inconvenience that you may experience between 1st to 5th June.

We thank you for your patience, understanding and unequaled support.

David Barrett CEO – VGMC”

Can you tell us what is really happen? because we still doesn’t receive our deviden from last month, and today they like playing with us, by can’t login our account to do withdraw, why they do “weird thins” like thing on the withdraw day?

All eyes, then, on Mr Hurni-Gosman and AGMAC. Will this stock market listing save the day for VGMC’s worried investors?

Alas, no; although Hurni-Gosman purports to be, and indeed, for all the good it has done him, may actually be, a veteran of Credit Suisse and the Swiss wealth management industry, he hasn’t just lent his credibility, if any, to VGMC; he’s handed it over, for good. Here’s a warning about AGMAC from the BVI regulator, issued on 27th May 2013, just a few days before VGMC’s accounts seized up:

Tortola, British Virgin Islands – 27 May, 2013 – The British Virgin Islands Financial Services Commission (the “FSC”) has recently been made aware that BVI Business Company THE ASIA GOLD MINING ASSET CORPORATION operating at which is offering online investment opportunities in precious metals and other natural resources, whilst purporting to be a Professional Closed-End Fund set up in the British Virgin Islands.  The FSC hereby informs the public that that though the activities THE ASIA GOLD MINING ASSET CORPORATION are such that do not require to be licensed by the Commission, members of the public should proceed with caution as a result of the false and misleading information published by THE ASIA GOLD MINING ASSET CORPORATION  on its website at

Members of the public are advised to exercise extreme caution in conducting any transactions with THE ASIA GOLD MINING ASSET CORPORATION. 

The public is invited to provide the FSC with any relevant information on questionable entities which are purportedly operating in or from within the Territory, and on any improper or illegal activities engaged in by such entities.

After that, AGMAC is never heard from again; and, by the way, you can add Pakistan to VGMC’s footprint:

In 2011, I made more than 90% of my investments with Virgin Gold Mining Corporation (VGMC), Panama. My investment amount including more than one year’s dividends/profits is about $243.000.00 which was made in CPS-Gold, I invested my personal clients’ funds with me as well. Last year, VGMC declared all shareholders that they are merging all CPS-Gold to AGMAC, Germany and it was expected to have back all investments in a year with extra dividends to all shareholders. I did manage all profits of my clients from the backup funds which were held with me to fulfill my clients’ needs for one year. In May, 2013; I received a form from AGMAC, they required some personal information before May 31, 2013. I did complete their requirements by May 28, 2013. It was expected to have my all investment amount with dividends/profits by August 2013 but now AGMAC’s official website is not in working mode as well as VGMC is not responding. Please give me helping hand as I am not alone to suffer; my precious clients are also worried. I cannot face even my all clients in current situation just because of VGMC. All shareholders worldwide are having the news on various websites that all shares got transferred to a fake asset management company in the Virgin Islands which couldn’t even start work because it got detected that it was a scam. So VGMC took back the shares and now asking shareholders to travel to London for a so-called ‘Know Your Client’ session without which shareholders will lose their rights to own shares in a new company called LISTCO. I’m worried of owning shares in phantom companies and need my all investment back. Unfortunately, they seem not to be saying anything about refunding the investment. Please help us to get back our investments as soon as quick because we are suffering a lot.

Mr. Umar Riaz, Pakistan

Shareholder, VGMC, Panama

So, there go VGMC and AGMAC, disappearing in short order. Evidently that build-up of AGMAC as a credible successor to VGMC is destroyed by the BVI regulator warning, which must have moved like greased lightning into the hands of VGMC’s various worried and belatedly alert Facebook communities.

But the scammers are undaunted; or under pressure: after all, they still have thousands of marks to cool out.

But they have a plan “B”, which we will cover in our next.

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  1. ambrit

    Thank you for this. The ‘Gold Bugs’ are always going on about physical possession of Precious Metals (PMs) versus paper possession through Electronically Traded Funds (ETFs) on their websites. Clever of these con men to offer actual gold as an inducement, especially to cultures where physical PMs have always been a sign of wealth and status. If any actual gold changed hands, then these crooks had to have at least some real money to start with. Did they have knowingly crooked ‘investors’ in the con? That would be a good one; crooks investing in setting up a Ponzi/Pyramid scheme!
    When I look at the ‘spreads’ alleged between actual PMs production and ETF amounts, I have to wonder; Is the entire Precious Metals Trade now a giant Ponzi Scheme?
    Thanks again. Waiting with bated breath.

    1. Tinky

      The answer to your last question is “No”. At the same time, however, investors would be well advised to learn the rather important distinctions between, say, the COMEX and SGE.

    2. jgordon

      The entire financial edifice is a ponzi scheme that will collapse at some point. You can not have an world economic system that is dependent on credit expansion for its survival while actual mineral and ecological resources available are (rapidly) declining. So in that respect this ponzi scam is just a bit more forthright and immediate than the rest. I don’t feel badly for people who’ve invested their resources, energy and belief in a system as fundamentally fraudulent and collapse-prone as ours is–and then get screwed despite their expectations. Sometimes Santa doesn’t drop by on Christmas with a bag full of gifts either, even if the kids felt really entitled to the gifts.

      Although with that said all of the perpetrators of such schemes really need to be given a proper trial and then executed forthwith. Not out of revenge of course, but because humanity is better off without them contaminating the culture and the gene pool.

  2. diptherio

    One Zaur Abbas Mammedov appears to be the cooler, or at least one of them. Check out his response to Amin Shah on that facebook post:

    Yes Mr Amin Shah i agree your opininon,we are victims of vgmc it was our mistake invest our money to fake company.Relax,be quite,we can not do enything now,but i am 100 % shure grate Allah will punish them,their doughters,their sons ,their granddoughetrs,grandsons will vomit our money.

    Relax and be quiet, let gawd figure it out…classic cooler.

    1. Pepsi

      From wikipedia

      A pyramid scheme is a form of fraud similar in some ways to a Ponzi scheme, relying as it does on a mistaken belief in a nonexistent financial reality, including the hope of an extremely high rate of return. However, several characteristics distinguish these schemes from Ponzi schemes:[1]
      In a Ponzi scheme, the schemer acts as a “hub” for the victims, interacting with all of them directly. In a pyramid scheme, those who recruit additional participants benefit directly. (In fact, failure to recruit typically means no investment return.)
      A Ponzi scheme claims to rely on some esoteric investment approach and often attracts well-to-do investors; whereas pyramid schemes explicitly claim that new money will be the source of payout for the initial investments.
      A pyramid scheme typically collapses much faster because it requires exponential increases in participants to sustain it. By contrast, Ponzi schemes can survive simply by persuading most existing participants to reinvest their money, with a relatively small number of new participants.

  3. ewmayer

    @Steve Dean:

    According to Mac Dictionary:

    Ponzi scheme: “a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.
    ORIGIN named after Charles Ponzi (died 1949), who carried out such a fraud (1919–20).”

    pyramid scheme: “a system of selling goods in which agency rights are sold to an increasing number of distributors at successively lower levels.”

  4. Rosairo

    This effectively shows where our entire planet is economically in terms of the valuations of actual commodities, and this is (I say somewhat reluctantly) where the precious-metals-as-a-hedge community has it right, the markets are rigged. So much of the commodities market is priced via perception and bizarre financial cultural practices it is difficult to gauge the true price of anything. This is a tired example, but look at oil. Why do we only pay $50 for 55 gallons of, effectively, thousands of hours of human labor? Worst thing is, oil is actually valuable, unlike precious metals outside of their use as conductors, and decoration, and it is still valued at a far lower price per ounce.

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