New York--Psssst. Wanna buy some indium? It's today's fanciest investment (um, what's the word? Oh yes . . .) scam. Gullible Americans are taking the bait from boiler rooms clustered in Toronto and the Cayman Islands, beyond the jurisdiction of U.S. law.
If they get you on the phone, these "yakkers" will say that Detroit plans to use indium on all car and truck windows. They'll say the defense industry is snapping it up. They'll call back a week later and say you've already made money (they saved you some indium at last week's price, but can't hold it indefinitely . . .). They'll say you can't lose, because they'll sell before price drops below what you paid. They'll send Federal Express to your door to collect your check.
Don't give it to them. You'll probably never see any of that money again.
What's indium? I asked David Minckler, director of marketing for the world's leading indium producer, the Indium Corporation of America in Utica, N.Y. Turns out, it's a soft metal found in zinc and copper ores and captured during the refining process. It has a variety of industrial uses -- for example, as solder, in fiber-optic communications systems and as a transparent glaze on some energy-efficient windows. But Minckler says that Detroit isn't planning a major investment.
The boiler rooms sell indium for anywhere from $40 to more than $80 a tri-ounce (that's a weight based on 14 ounces to a pound rather than the usual 16 ounces). But the true price for indium today is only $5.60 a tri-ounce, Minckler says. That's down from $10 in the mid-1980s, and an all-time high of $20 around 1980, when production was temporarily slowed.
There is zero -- repeat, zero -- investment market for indium, and there never has been one, Minckler says. It is not traded on the London Metal Exchange, as some salespeople claim.
In March, the Metropolitan Toronto police announced they had shut down Hampton House Metals, Cherbourg Investments and Transworld International Investments, alleging that they'd sold at least $6 million worth of overpriced gemstones and "strategic metals" (indium and some germanium). More than 60 people were arrested.
I called four other firms alleged to be indium-sales boiler rooms by officials at the Maine Securities Administration: Both Eurocan Metals in Toronto and Westchester Metals (with numbers in Buffalo and in Downsview, Ontario, and a connection with Whitehall Metals in Toronto) said they would answer only questions in writing; I faxed questions, but didn't get a reply. At Whitehall, a switchboard operator said no one could talk to me. European Metals Group in the Cayman Islands refused to tell me its price of indium but said someone would call (no one has).
Maine Securities Administration, which has put out a warning about indium scams, says it has also had complaints about other firms.
The Fraud Information Center of the National Consumers League in Chicago ( 876-7060, open 9 a.m. to 5 p.m. EST) has received hundreds of calls about indium in the past two months alone. But even when callers learn the metal's true market price they're not always dissuaded from investing, says the league's vice president, John Barker. The boiler rooms claim that theirs is a purer (hence much more valuable) metal than the commercial one. That's bunk, Minckler says.
Toronto detective Tony Slot suggests that victims call the FBI. A threat to call might even persuade the scamsters to send your money back.
The North American Securities Administrators Association expects to issue a warning about indium scams at the end of May. Eric Vash, a staff attorney at the Federal Trade Commission, asks that letters of complaint be sent to him at the FTC, 6th St. and Pennsylvania Ave. NW, Room 200, Washington D.C. 20580. Your letters might contribute to an international investigation.
3' 1993, Washington Post Writers Group