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Gold Wars: inside Toronto’s cash-for-gold battle

What happens when two gold buyers set up shop kitty-corner to each other in a rabidly competitive industry? A tale of death threats and gunshots in the night at Bathurst and Glencairn

Around noon on July 16, a large, Iranian-born man named Saeed Hosseini purportedly walked into Easy Cash for Gold, a storefront near Bathurst and Glencairn, and asked to speak in private with the owner, Jack Berkovits. Berkovits, a grizzled 58-year-old who also owns a chain of jewellery stores called Omni Jewelcrafters, took Hosseini to a nearby kosher restaurant called King David Pizza. They ordered coffee and sat. After much prevarication, Hosseini, a tae kwon do specialist and former mixed martial arts competitor, finally admitted that he had no gold to sell. Instead, he claimed he was there because of Maria Konstan, an employee of a competitor named Harold Gerstel, a man better known by his public moniker Harold the Jewellery Buyer. According to Hosseini, Konstan had asked him to kill Berkovits. Having said this, Hosseini quickly assured Berkovits that he wasn’t going to do it; he just thought Berkovits should know that Konstan not only wanted him dead, but was willing to pay someone to do it.

(Photograph: Keith Beaty/Getstock; Illustration: Asaf Hanuka)

Berkovits immediately contacted 13 Division at Eglinton and the Allen Expressway and gave a statement to two police investigators. Berkovits’s claims were later bolstered by Hosseini himself, who gave investigators the same story he’d given Berkovits. Konstan was arrested on July 22 and charged with five criminal offences, the most serious of which was counselling to commit murder.

The case was reported by a swarm of journalists and was revealed to be as convoluted as it was ludicrous. In one televised news interview, Hosseini, while hidden in shadow like a participant in a witness protection program, claimed that he’d worked for Gerstel for years, primarily as a collector of debts. Konstan, he alleged, had offered him $50,000 to take care of Berkovits; she had been so angry at the time that he could see the veins stand out on her forehead. The report then cut to an unnamed Gerstel relative, who insisted that Hosseini was never an employee and had been paid only on one occasion to keep an eye on the competition across the street. Not to be outdone, Harold Gerstel complained to one of the papers that the allegations were false: “All I can say is it’s a total frame-up,” he was reported as saying. No one, meanwhile, could explain what would motivate Konstan, an elderly, low-level employee of Gerstel’s, to hire a hit man.

The most interesting fact came from the police, who, either by accident or design, released a curious detail to the press: the tensions between the owners of Harold the Jewellery Buyer and Omni Jewelcrafters began in May 2009, when Jack Berkovits hung a “Cash for Gold” sign outside his store.

Gold is a notoriously fickle beast, largely because a trio of factors, both commercial and emotional, affects its price. The first is the holy tenet of supply and demand. Gold, like tin or zinc, is a commodity, and when the economy is good, demand for gold rises. Where gold differs from the more prosaic metals is that it’s primarily used for jewellery. So, for example, the Indian wedding season produces a reliable surge in demand. The second factor is inflation. For centuries, people have converted their wealth to gold during periods in which currency values are falling. During the Weimar Republic, when inflation rates broke one million per cent a month, war-weary Germans began sewing gold into the lining of their coats.

The third and perhaps most dramatic factor is impending catastrophe. Gold has always been purchased during periods in which the world seems poised to undergo terrifying change, it being an old joke that, during the Cuban missile crisis, people stocked their bomb shelters with food, water and gold bullion.

Between these factors, there exists a complex dance, a sort of fiduciary ménage à trois. People don’t use gold as a catastrophe hedge during periods in which business is good. Economies don’t miraculously expand in the aftermath of a major terrorist attack. All three factors shouldn’t, by definition, inflate gold prices at the same time. And yet, over the past couple of years, that’s exactly what happened.

In July 2005, gold was trading at about $425 (U.S.) per ounce. Around this time, its price began to spiritedly rise, an increase that economists saw primarily as a correction: the economy was still good, and the price of gold had essentially remained flat since a brief spike in the early 1980s. In October 2008, with gold trading at just under $900 an ounce, the stock market crashed, U.S. lenders began foreclosing homes with a rapidity that frightened even the most optimistic of investment analysts, and entire banks went out of business.