Given the eye-popping price of gold these days, lots of folks are getting tempting invitations to invest in gold-mining stocks, gold coins, precious metal futures and plain ol' nuggets.

But those glittery get-rich-quick offers often turn out to be as dazzling as a dirty lump of coal.

Investment scams often "ride the coattails" of hot news topics, says FBI white-collar crime expert Kevin Baker in Sacramento.

That's why, as gold prices tripled to more than $1,800 an ounce in the past year, there has been a similar surge in the number of blogs, websites, Twitter messages and YouTube ads touting gold-related investments, says the Financial Industry Regulatory Authority, or FINRA.

Some offer "free lunch" seminars to entice potential investors. Other gold-buying offers arrive by email, phone or word-of-mouth recommendations from friends.

Some may be legitimate; many are not.

"Con artists are using the run-up (in gold prices) as a hook to part investors from their money," said Gerri Walsh, FINRA's vice president for investor education, in a statement. "Investors should think twice before investing in any gold investment promising exponential returns or any company that claims it is a buyout target for other mining companies."

In the Sacramento area, the FBI's Baker said ongoing fraud investigations involve the purported value of dormant gold mines in California and Nevada. While declining to discuss those cases in detail, Baker said the rise in gold prices has led to "legitimate and not-so-legitimate" efforts to resurrect some of those mines.

In the last year, gold scammers have tripped up unsuspecting investors everywhere.

In December, a Laguna Niguel man and two Southern California companies were accused in a federal civil complaint of running a $5.5 million Ponzi scheme that allegedly duped more than 80 investors who thought they were investing in precious metals futures. Instead, the defendants allegedly siphoned off more than $1.1 million for their own personal spending.

Last summer, the SEC charged six people with running a $300 million gold mining fraud that persuaded more than 3,000 investors to put in their savings, retirement funds and even home equity. In sales seminars, the Canadian and U.S. investors were told they could expect annual returns of 18 percent to 36 percent.

And this spring, the U.S. Commodity Futures Trading Commission, or CFTC, filed three separate complaints against companies and individuals, based in either California or Florida, who are accused of defrauding investors of millions in precious metals scams.

How to avoid getting ensnared?

There's an old investment adage: If it sounds too good to be true, it probably is. Listen to and read carefully any investment proposals, especially those that promise low-risk-but-high-return deals.

FINRA warns investors to be wary of any pitch on a gold investment that:

• Promises quick, exponential growth, such as a Nevada mining company stock that promised to "turn $10,000 into $384,600."

• Touts a gold company as a prime "buyout target."

• Claims a tie between the company's stock performance and rising gold prices.

• Uses scare tactics, such as fears of inflation or economic meltdown.

• Makes speculative claims based on a company's proximity to an existing gold reserve.

• Involves a company that changed its name or trading symbol to align more closely with gold. For example, FINRA said, some companies that currently claim to engage in gold mining were originally incorporated to sell private golf-course opportunities or urban health spas.

Dig before investing

Never rely solely on information received in an unsolicited fax or email. It's easy for slick promoters to make exaggerated claims about new products, lucrative contracts or a company's revenue, profits or future stock price, says FINRA. Be wary of boasts about significant mineral reserves or mining operations in foreign countries where it's difficult to verify the claims.

And, if considering buying precious metals without taking physical delivery, the CFTC advises being wary of hidden commissions, loan rates, interest charges or "storage" fees. Too often, no metal is actually purchased or stored and investors lose everything.

Always ask: 'Why me?'

Why would a total stranger tell you about a lucrative investment opportunity? Because there is no such "opportunity," says FINRA. In many scams, those who tout a fraudulent company's stock are either corporate insiders, large shareholders or paid celebrities who will profit if the stock price goes up.

Read a company's SEC filings, if available, to verify information you've heard. But note: Just because a company has registered or filed reports with the SEC, there's no guarantee it's a sound investment.

Fraud of the month

Today it's gold scams; tomorrow, financial fraudsters could hide behind another newsy topic.

"We see this time and time again," said the FBI's Baker.

Shortly after 9/11, for instance, he said, a Sacramento-based investment scam preyed on Americans' fears by offering buy-ins to a company developing "facial-recognition technology" that purportedly could thwart future terrorist attacks. Unfortunately for investors, the company did not actually exist and investors lost millions of dollars.

Similarly, during the recent housing bubble, phony real estate investments lured plenty of gullible investors.

Going forward, Baker said the FBI anticipates more financial scams "focused around trendy topics," such as green energy, foreign currency trading and other precious metals.

If you want to invest in gold, there are legitimate exchange-traded funds and publicly traded companies that can be part of a diversified investment portfolio. And gold bullion or coins also can be part of your holdings.

But don't overdo it. As FINRA warns, a "heavy concentration of gold investments can leave investors … at risk of losing a substantial percentage of their money."

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Have a personal finance question? Call The Bee's Claudia Buck at (916) 321-1968.

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