Beware of Illegal Gold Party Perpetrators
I am sure you or someone you know has been invited to a home “Gold Party” to sell unwanted or broken jewelry, coins, diamonds, and so on. Well the truth of the matter is that such a gathering in an unlicensed location is against the laws of California. No one is allowed to purchase such items from the public without a secondhand dealer license or a pawnbroker license. Even if the buyer does have one of these licenses, it can only be used to purchase items in the location the State has printed on the license; that means at their place of business, not at another person’s home or office.
Here is how the crime works:
1. The perpetrator of the crime offers the resident a certain amount to buy snacks for the “party” plus a percentage of the amount purchased.
2. The perpetrator usually pays cash - which is clearly an open door to money laundering and fencing stolen goods.
3. The perpetrator is usually not licensed as a secondhand dealer as required by California Business and Professions Code Section 21625-21647.
4. If the perpetrator is licensed, it is a criminal violation of 21642 (b) 1 to conduct such activities other than the address listed on the license. California Business and Professions Code, Section 21645 states that the punishment is up to six months in jail and a $25,000 fine.*
5. The perpetrator will typically not require identification, fill out a police report or obtain a fingerprint, all of which are clearly required by California in law, in section 21628 to help prevent the sale of stolen goods.
This crime is a problem in our city and it’s growing. So be aware that if you plan to throw a gold party, the people that you trust to buy your friend’s gold are committing a crime by doing so you could be convicted of aiding and abetting in the commission of a crime. Thus, both you and they may be prosecuted to the full extent of the law. Not only may this involve jail time and a fine, but wait until the IRS and State Board of Equalization find out. Jail time for the secondhand dealer violation is just the tip of the iceberg compared to the other punishments that the authorities could impose. In addition to the California second-hand dealer crime, it is also a federal offence to pay or receive cash and not report it. Such an act is considered tax evasion and, quite possibly, money laundering. So the next time you hear about a “Gold Party,” remember that you are responsible for what happens in your home. Valencia Loan Company, Inc. is a local dealer in Santa Clarita that runs a legitimate business, follows the legal requirements, and can legally purchase your gold and diamonds. So please take the time to give us a call to see how you can host a gold party legally.
If you hear of local parties happening in your neighborhood, please report it to the local Sheriff’s Department at 661-255-1121.
Valencia Loan Company, Inc. is a local licensed pawn shop and second-hand dealer located at 28015 Smyth Drive, Santa Clarita, CA 91355. The telephone number to call is 661-310-2820.
*California Business and Professions Code, Section 21642 (b) 1 states that secondhand dealers must be licensed and can only conduct trade at the address listed on the license. They cannot purchase merchandise from home to home. Section 21645 states that the punishment is up to six months in jail and a $25,000 fine. The above is for informational purposes only and is not intended as a substitution for licensed tax or legal advice. If such advice is needed the services of the appropriate licensed professional person should be sought. |
