BUTTE — What could you do with a 25-pound chunk of gold — worth upward of $500,000?
Local area gold dealers say it wouldn’t be easy to pass off such a large ingot, the kind normally found in Fort Knox or in private dealers’ top-secret locations.
But the possibility exists.
A 25-pound gold piece missing in connection with recent unsolved double murders in Deer Lodge has yet to be recovered by authorities, who aren’t talking.
A cleaning woman reportedly found the bar in October, about 10 days before Beverly Giannonatti, 79, and her son, Greg, 57, went missing at a house on Larkspur Road between Deer Lodge and Garrison. The home belonged to Beverly’s late ex-husband; she was remodeling the home with plans to live there, authorities said.
Both bodies were found Sunday at a dump site in rural Powell County, but the elusive gold bar remains undiscovered. No charges have been filed in the case; authorities are holding the chief suspect, David Nelson, on an unrelated probation violation charge.
Area gold dealers report they’ve never seen a gold bar that size. If one crossed their counter, it would raise their suspicions to say the least.
If a suspect had a counterfeit or real 25-pound gold bar, dealers follow a list of precautions to protect themselves.
“If it’s kept in the original form, it should have a maker’s mark, a serial number and the weight stamped on it,” Eric Stroh, Missoula Gold and Silver Exchange manager in Missoula, said Wednesday in a telephone interview with The Standard.
He said legitimate dealers must follow federal regulations for certain types and amounts of gold and other metals.
“If someone came in with that, we’d do our due diligence,’’ he said.
Stroh would ask: Where did they get it? What lot did it come from? What’s the consistency of other metals in it? When was it made?
The inability to answer those questions raises all kinds of red flags.
“Even a pure gold bar would have one-thousandths impurity in it,” he added. “Otherwise, it’s untraceable. You have to be above board to get them and sell them in that form.”
Stroh would also fill out a 1099 tax form on the spot “so the IRS knows” about such a transaction.
Legitimate dealers ask for identification and a signature, as well, said Hank Senn, 20-year Anaconda Coins and Jewelry Exchange owner. He also requires a signature when he buys from an individual seller.
“It really cuts down on the illegal element,” added Senn. However, he does not require an ID when he sells an item.
Determining the authenticity is the tricky part. A certified appraiser like Senn could run acid tests on the bar. If the surface of a gold-plated pocket watch, for example, bubbles or turns color, it’s fake.
“Any assayer would probably want to drill a hole all the way through a bar to test the metals to make sure it’s all gold,” Senn said, since counterfeiters sometimes drill holes in the side of a bar and fill it with lead.
“It’s been known to be done,” he added.
Stroh would have it safely transported to “one of the big boys” — probably a major dealer on the East Coast — to test the percentage of metal with an expensive “X-ray gun.” The expensive machine basically passes a beam through the bar to identify metals.
Where could you legitimately buy such a gold bar?
Either from a manufacturer, refinery or from a coin shop — that’s it.
An investment is one thing. A stolen chunk of gold is another.
“Back when gold was only $280 an ounce, people would buy it as an investment,” Stroh said. “I still don’t know why they would go that large because they would need extra security and storage. Over time, you’d lose a lot of value because of the storage fees.”
What would someone with such a conspicuous gold bar do with it?
“Hide it, melt it down or transport it somewhere else,” said Eric Stroh, “If he tried to sell it in that form, he’d stand out like a sore thumb because he wouldn’t have the credentials.”
Stroh knows well the security side of counterfeit activity. He was a detention and transport officer for the Missoula Sheriff’s Department for 26 years.
“Not too many people would walk in the door with something like that. If it’s stolen, the best way is to cash it in by melting it and making it into smaller amounts of gold — say one ounce or less and then sell it in several places.”
Stroh retired in 2010 and has worked in the coin and exchange business since 2011. He’s on the sharp lookout for counterfeiters.
A thief, knowing that a 25-pound gold ingot is hot, could take it to an unscrupulous dealer — what Senn calls a “fence” — and sell it at half price.
“The thief has either buried it, gotten it to a buddy or taken it to a ‘fence’ who has had it melted,” Senn said. “Once you melt gold, it can’t be traced.”
That’s why Senn said he runs a clean establishment and is friends with the local police department.
Seeing a bar that size would definitely raise eyebrows.
“That’s like Fort Knox material,” added Senn. “It’s an extreme buy. As a dealer in the trade, I’d have to make sure it is authentic. Authenticity is the real key.”
Ultimately, the size and location of the gold found in the Deer Lodge case is a head-scratcher.
“I still don’t know why they would want a bar that big,” added Stroh. “But those bars do exist, and anyone who has the money can buy them.”
On Wednesday, gold closed at $1,048.50 an ounce.