Pascal Lauener / Reuters

Sophisticated counterfeit manufacturers purchase real gold bars like these, hollow them out and fill them with cheaper tungsten.

Jewelry merchants in New York City are finding out they have to be more careful that they're not inadvertently buying fake gold.

The issue of counterfeit gold is re-emerging after a reputable merchant in Manhattan discovered he'd bought $100,000 worth of fake gold bars, WNYW reported.

When merchant Ibrahim Fadl drilled into several of the gold bars he'd bought from a regular source, he discovered they were actually filled with gray tungsten.

Whoever is making the fake gold bars seems to be running a complex operation.

"I can't imagine how they cut the bar clean, and cut, and took everything inside out and left the shell to fit the tungsten in," Fadl told NY1 News.

According to WNYW, the deception happens when a hollowed-out, real gold bar with serial numbers and papers is filled with cheaper tungsten, since it weighs nearly the same.

For merchants like Fadl, it's a costly mistake: A counterfeit 10-ounce gold bar bought for almost $18,000 ends up only being worth $3,600, WNYW reported.

NY1 News asked Fadl how he felt after he discovered the four bars he bought were fake. "Sick to my stomach, but I thank god we didn't sell this to somebody," he said.

Related: See photos of the fake gold on MyFoxNY.com
Related: CNBC’s "Crime Inc.: Counterfeit Goods"

Gold expert Mike Fuljenz, of Universal Coin & Bullion, told NBC News that counterfeiting like this has been going on for a long time.

"The people who get hit are not the bigger dealers," Fuljenz said, since they often use machinery to detect counterfeits. However while it's easier to pinpoint counterfeits in thinner materials like coins, Fuljenz said it's more difficult with a big, thick bar.

The Secret Service, which is reportedly investigating the case, was originally founded in 1865 for the purpose of stopping the counterfeiting of U.S. currency. The agency said Wednesday they won't provide further comment.

This New York incident could be a sign of a more widespread criminal effort. Gold bars filled with tungsten were discovered in England back in March, according to WNYW.

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