Jewelry, Gems, & Minerals/gold refining

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Question
I am a new goldsmith just starting out and recently my coworker (who has been behind the bench for many years)began melting down scrap gold and pouring it into a bar mold for sizing stock. He is using all scrap and only cleaning it in the ultrasonic before melting. It tests slightly under karat. I was taught that scrap gold needed to be mixed at least 50/50% with new gold to keep the proper karat and integrity of the metal and that it needed to be purified first. I brought this concern up with my coworker and he said while it won't be as "nice" as fresh gold it's fine to use it for repairs and to continue to charge the same prices. I am concerned about the legality of this as this seems it could fall into the category of selling under karat. I don't want to go to a higher authority with my concern unless I know it is genuinely a problem. Do you know if this is legal/ethical? Thank you for your time

Answer
Theresa, this question came like a solid hit to the chest.  Why? I am typing out my answer as we speak and then you will know.  

Although it is preferred for answers and questions to be open to the public, in your personal situation would you prefer to ask privately?  Please reply and let me know. Would you want it private at least until you have resolved this issue where you work? If so, reply with a new question, not a follow-up, exactly the same but check the private box.  I will answer either way.  I have unfortunately seen more than a few happenings in the jewelry world which I consider unethical and this is one,  a bit of being dishonest often overlooked because it seems minor. Not only does honesty suffer but also quality of craftsmanship which is enough alone for me to make the best true karat stock that I can. I have more to say about this, the very good, the on the fence and the ugly.  

Please respond one way or the other, either follow-up to this response and say "go for it, public is ok" or ask a new exactly same question with "private" marked. That is your choice and either way I will answer straight up and honest from my convictions and experiences with generally quite honest jewelers but with relevant insights gleaned over years in the business.

God Bless and Peace.  Thomas.  I await your reply.  

Jewelry, Gems, & Minerals

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Thomas

Expertise

Have a question about jewelry repair or working with precious metal jewelry and gemstones? For many years up to December 31, 2010, I was a working professional bench jeweler, involved everyday with setting stones in mountings, designing and making jewelry, repairing and limited custom manufacture. If you work with jewelry as a hobby or as a profession, I might be able to help. I deal with the retail business, not mass production. Ask privately if you wish. See the box for that: It keeps your question between us. Please DO NOT ask MAKER'S MARKS, but metal quality marks are fine to ask. Please DO NOT ask diamond prices. See a gemologist for that.

Experience

I have extensive experience in design, service and making of jewelry. I deal mostly with precious metals and gemstones but work with many materials as needed and usable to create an artistic design. My experience also includes freelance photography and photographer of jewelry and similar items for a former employer and individuals. Design of custom items requires reading the desires of the client and being clear on what can be done within that framework...then fulfilling the transition of idea to reality. Effective communications is essential in a working designer/producer and customer relationship.

Education/Credentials
Education is English/Physics! Started in human resources, to advertising, to jewelry...wow, what a road. I have had formal training in jewelry work and many shared experiences with top grade jewelers. We just never know were we will go or be. Follow your best, your dreams, with some discretion! Don't let the work tear up your body along the way as it has mine.

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