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Counterfeit bullion: a plague on the market
By Paul Gilkes | Coin World Staff | 02-18-13
Article first published in March 04, 2013, U.S. Collectibles section of Coin World
Among the counterfeit Panda 1-ounce silver bullion coins passed at Coins+ in Cincinnati were these two pieces, dated 2003 and 2009.
Counterfeit silver bullion coins, rounds and bars have plagued the numismatic marketplace for several years, but some in the hobby are seeing what might be a surge of some fakes.
Counterfeits of some of the bullion pieces have been around for a number of years, though increasing numbers are showing up, and manufacturing methods have made some pieces more highly deceptive.
Over the past month, in its weekly issues, Coin World has reported on counterfeit American Prospector 1-ounce silver rounds being offered in the United States and fake 2011 American Eagle silver bullion coins surfacing in Canada. The latest report is from Cincinnati, of fake 1-ounce Chinese Panda bullion coins.
While the attempted sellers of such fake bullion items often go untouched by authorities, not all do. Police in Denton, Texas, have arrested a local man on eight counts associated with the sale of fake American Prospector rounds at pawn shops and jewelry stores in that area.
Regardless of design, many purported silver pieces that have duped collectors and dealers alike have been found to contain no silver at all. Most have been composed of various concentrations of copper, nickel and zinc in place of the .999 fine silver found in most genuine silver bullion items.
The deception is often uncovered only after a sale has taken place, when destructive testing of individual pieces reveals the absence of any precious metals. By that time, however, the seller is nowhere to be found.
Some pieces are offered as novelty items and advertised by the original sellers as fabricated from base metals plated with .999 fine silver, but carry designs suggesting a composition of pure silver. In secondary sales, an unsuspecting buyer, unaware that a piece is plated base metal, may buy it as genuine silver and never learn of its authenticity until years later when preparing to resell the item.
Confronted with the ever-increasing proliferation of counterfeits of its products in the market, officials at Sunshine Minting Inc. during the past year took action by rebranding all of the firm’s precious metals products and producing them with anti-counterfeiting bullion security devices.
Sunshine Minting Inc., in Coeur d’Alene, Idaho, is now producing its new bullion products bearing the Mint Mark SI security technology.
Sunshine Minting is a private minting facility that strikes and sells its own brand of gold and silver products in various weights, each bearing the company name. Sunshine is also the primary supplier of planchets to the U.S. Mint for silver American Eagles.
Tom Power, president and chief executive officer of Sunshine, said Feb. 13 that the company has been assertive in trying to remove counterfeit Sunshine Minting products from the marketplace and prevent any further sale.
When offerings are noted on eBay, Alibaba and through other venues, Power said the company will take the necessary steps to protect the Sunshine brand. Power said eBay has been extremely cooperative in removing such items for sale.
Many of the fake Sunshine products appearing on the market bearing older designs have been found to be struck in either solely base metals or base metals plated with a thin coating of precious metal.
“Sunshine Minting, Inc. does not manufacture nor sell our bullion products as ‘silver-plated’ or ‘clad,’ ” Power said. “These are counterfeit versions that are being illegally represented as SMI products when, in fact, they are not manufactured by Sunshine Minting. SMI is taking every legal measure that we can to thwart this influx of counterfeit product and protect our reputation as the leading manufacturer of bullion products.”
Sunshine’s newly branded bullion products are being struck containing Mint Mark SI, a “Scrambled Indicia” security feature that was originally developed for the printing industry by Graphic Security Systems Corp., located in Lake Worth, Fla.
Sunshine is the first mint to develop this technology for use on bullion products, according to Sunshine.
Sunshine’s hallmark, featuring an eagle in flight with the sun and rays in the background, dominates the new obverse design of its bullion products. The weight and fineness are also stamped incuse on the obverse.
Gold bars are certified to be .9999 fine, ranging in size from 1 gram to 100 grams; are serialized; and are housed in specialized Tamper Evident Packaging. Silver bars and rounds will feature the Sunshine Minting hallmark and are certified to be .999 fine and range in size from a half ounce to 100 ounces.
The Mint Mark SI security devices are located in the middle of the reverse of each of the newly produced bullion products. The security devices are invisible to the naked eye and are readable only by using a special decoder.
The decoder, approximately the size of a credit card, reveals the primary security device when the decoder is passed over the central circular device.
Microprinting readable through magnification appears around the top and bottom border of the central device, appearing as MINT MARK SI.
Passing the decoder over the central reverse design reveals the first security device, appearing as VALID, between the MINT MARK SI microprinting. Turning the decoder 90 degrees counterclockwise reveals the second security device in the same location, with the word VALID replaced with a sun and rays motif.
The security devices are also visible using an adaptor made for the iPhone.
Power said approximately 1 million Sunshine Mint bullion pieces containing the security devices have been introduced into the market over the past six months.
It is believed that many of the counterfeit silver bullion pieces offered online and elsewhere have infiltrated the marketplace from suppliers in China.
A website at http://theeyeballkid.hubpages.com/hub/Fake-silver-bars-and-coins details and demonstrates how to detect some of the counterfeit pieces that have popped up intermittently. Listed pieces include fakes of 1-ounce .999 fine silver Pan American bars, Scottsdale bars, Sunshine Mint bars, American Prospector rounds, Chinese Panda silver coins, Australian Lunar Dragon bullion coins and Canadian Maple Leaf bullion coins, as well as generic 1-ounce silver bars.
Officials at Coins+ in Cincinnati reported that, on Feb. 5, the firm purchased 42 of what were believed to be Chinese Panda 1-ounce bullion coins of various dates from 2003 through 2011.
Later, after the seller had left the store, an acid test was conducted, determining the pieces in the lot were counterfeit, according to Coins+.
In addition to acid tests, one can also check specifications for weight and diameter, and conduct a ring test against a genuine piece. It can also be useful to compare design elements.
A genuine Panda 1-ounce .999 fine silver bullion coin should measure 40 millimeters in diameter and 2.95 millimeters thick and weigh 31.101 grams.
A 2009-dated counterfeit among those fakes sold to Coins+ measured 39.72 millimeters in diameter, had a thickness ranging from 3.91 to 3.97 millimeters depending on where the measurement was taken on the rim, and weighed 31.1844 grams. A genuine 2013 Panda silver bullion coin emits a high-pitched ring when tested. The 2009 counterfeit emits almost no ring.
Many silver bullion coins and rounds bear vertical edge reeding. All of the fakes Coins+ purchased had edge reeding positioned diagonally.
However, orientation of edge reeding is not an absolute diagnostic; the genuine 2013 silver Pandas bear diagonal edge reeding.
Orientation of edge reeding has varied on the edge of silver Pandas depending on the year of issue, according to William Graessle, vice president of sales for PandaAmerica in Torrance, Calif.
The obverse design of genuine Panda silver coins depicting a Panda motif changes annually. The reverse depicts the 15th century Hall of Prayer for Abundant Harvest in the Temple of Heaven; while the central device on the reverse has remained the same, the reverse treatment, placement of other elements and width of rim have changed over the years. The first version of the reverse was used from 1989 to 1991; the second reverse was used from 1992 to 1999; and the third reverse has been used since 2000.
Depending on the year of issue and the design, which details are frosted and which are mirrored like Proof varies.
Graessle said the genuine Panda silver coins generally exhibit heavier frosting on the devices than is seen on the fake pieces.
A listing of varieties on the genuine versions can be found at the “Panda Varieties” link from the PandaAmerica website at www.pandaamerica.com/.
Jordan Alan Pettit, 26, whose address is listed on bond records as Richardson, Texas, but which investigators report as Garland, faces seven individual misdemeanor counts of deceptive business practices filed by the Denton Police Department and one count of deceptive business practices filed by the Denton County Sheriff’s Department. Pettit remains free on bond pending court appearances. No court dates to answer any of the eight charges had been set as of Feb. 13.
A spokesman for the Denton Police Department told Coin World Feb. 12 that Pettit is alleged to have passed fake American Prospector rounds at several local pawn shops and jewelry stores.
Pettit is alleged to have passed fake rounds five times at one pawn shop by pawning the items for cash, then not returning to pick up the merchandise, according to the police department spokesman. Employees at one jewelry store did not realize they had been duped until they decided to try to melt one of the Prospector pieces to use the metal for jewelry repair, and the color of the metal was wrong when heat was applied, according to the police.
Counterfeit American Prospector silver rounds have been in the market for a number of years, but began appearing in larger numbers in 2012.
Examples have been offered online on eBay, and Coin World has received recent reports of pieces being offered over the counter to dealers in the Bay City/Saginaw areas of Michigan.
Comparison of an example of a fake American Prospector round to a genuine example shows attributes that can be used in authentication. The counterfeit piece used for this comparison was purchased by an unidentified dealer through an eBay sale and provided to Coin World by Texas dealer Mike Fuljenz. The genuine example was supplied to Coin World by Dillon Gage, a worldwide bullion firm based in Dallas. Comparison of the two pieces yielded the following diagnostic attributes:
➤ The counterfeit exhibits frosted devices against Proof fields while the genuine piece has the duller, uniform surface texture that one normally finds on a strictly bullion piece.
➤ The genuine piece has a higher, pure ring when tapped with a hard object while perched on the end of one’s fingers, while the fake round has a duller sound.
➤ The genuine piece is 40mm in diameter and weighs 31.103 grams; the fake piece is slightly smaller in diameter but weighs 31.184 grams.
➤ On the genuine obverse, the contents of the prospector’s pan and the pan itself are more defined than on the fake. In the photo illustrations, notice the differences in the rendition of the water movement, shoreline details and their placement in relation to the inscriptions.
➤ On the reverse, the big E design device on the fake has a somewhat flat frosting, while the surface of the E on the genuine piece is pebbled. The inside top of the G in the inscription ENGELHARD is notched on the genuine piece; the G is rounded out on the fake.
➤ The longitude and latitude lines of the globe logo are tight to, but not touching, the big E device on the genuine piece; on the fake, the lines are distant from the E.
➤ The outer border on the globe is complete on the genuine piece, but broken just above the N in the word ONE on the fake.
The Feb. 18 Coin World reported the appearance of counterfeit 2011 American Eagle silver bullion coins in Toronto. Results of a spectrographic analysis of one of the counterfeit American Eagles determined a composition of 50.4753 percent nickel; 39.3614 percent copper; 10.1163 percent zinc; and 0.0271 percent gold.
In comparison, spectrographic analysis of a counterfeit 1984 American Prospector round from among those obtained in 2012 on eBay indicated a composition of 60 percent copper, 39 percent zinc and 1 percent nickel.
Numismatic Guaranty Corp. has published online articles devoted to what its grading staff has encountered among questionable bullion pieces submitted for grading, archived at www.ngccoin.com/news/Landing.aspx?SeriesID=7. ■
5-Rupee Counterfeiters Arrested
Other News & Articles
This article was originally printed in Numismatic News.
An unnamed police officer is quoted as saying, “The arrests were made based on a tip-off that a gang led by Luthra was supplying fake coins to people in Delhi and the NCR for several months. We were told that the gang would travel from Ghaziabad to Sarai Kale Khan ISBT to deliver a huge consignment of these to a man named Pankaj on Thursday evening.”
The Indian publication Business Standard reported on Nov. 30 that “Six packets containing 5,000 counterfeit coins of 5-rupee denomination, having [a] face value of 1.5 lakh rupees, were recovered from the car in which they had come to deliver the coins.”
It doesn’t appear this is simply some local gang trying to cash in on bogus coins. According to the Dec. 1 The Times of India newspaper, “Two years after the Lodhi Colony police busted an international racket circulating fake coins from across [the] border, the crime branch has found evidence of the same gang at work with the re-arrest of its linchpin.”
The article continues, quoting police spokesman Bhism Singh as saying: “With the arrest of three persons, we have busted an international network of criminals involved in minting counterfeit Indian coins in Nepal and supplying the fake currency in India. A total of 309,000 counterfeit coins of 5-rupee denomination have been seized. A [Chevrolet] Tavera used in the transportation and distribution of these coins has been seized.”
Singh told the newspaper the coins were originating from Birganj in Nepal. He is quoted as saying, “Fake coins worth 1 crore rupees have entered the country via eastern UP yet again after 2010. We are in talks with the Reserve Bank of India to identify these coins. The gang is headed by Sweekar Luthra who was arrested in Delhi along with his brother two years ago.”
The article then identifies the same people named in the Hindustan Times article, calling Kumar “a master thief with 29 cases against him.”
This counterfeiting ring might suggest the intrigue someone would like to read in a mystery novel or see in a movie. According to police, Sweekar confessed he used the counterfeit coins to finance residential construction in Tilak Nagar in collaboration with what the police termed as “a political family.”
Singh continued, “The gangsters are helped by railway employees and customs officials near [the] Nepal border. Pankaj, a resident of Shakarpur in Delhi, is a supplier of fake coins. Rajendra Sakia, Upkar Luthra who is Sweekar’s brother, Raj Kumar, and Pankaj are the gang members yet to be arrested.”
There is an ominous slant to this counterfeiting ring as well. Police indicated the foreign link became clear once they realized the similarities to the previous arrests.
A source that chose to remain anonymous said, “Their aim is to destabilize the economy. Such small denominations do not attract the attention of law enforcers.”
Bogus 1889-S Morgan dollar
Practice piece for counterfeiter?
By Michael Fahey | Nov. 29, 2012 9:59 a.m.
Article first published in 2012-12-10, Expert Advice section of Coin World
Images by Raymond Bruels III, courtesy of ANACS.
The 1889-S Morgan silver dollar is not one of the dates in the series usually associated with added Mint marks.
With a mintage of 700,000 pieces, it is generally considered a “scarce” date, not a rare one.
The current Coin Values price for an 1889-S Morgan dollar in About Uncirculated 50 is only $125, which is definitely on the lower end as justification for the work involved in the alteration process.
The coin shown here has an embossed S Mint mark alteration, produced by drilling a hole into the coin from the edge, inserting a special tool into the hole, and forcing metal in the shape of a Mint mark up to the surface of the coin.
Detecting this type of alteration is generally done as follows:
➤ Assess overall appearance: Most Philadelphia Mint Morgan dollars — none of which carry a Mint mark — have a different luster and surface texture than a dollar from the same year at the San Francisco Mint. Silver dollar specialists can often determine the Mint of a given coin just by looking at the obverse. If the obverse of a silver dollar looks like a Philadelphia Mint issue, and a Mint mark appears on the reverse of the coin, look closer at the piece.
➤ Inspect the Mint mark: Most “embossed S” alterations I have seen exhibit an “S” that appears stronger in the centers and shallower on the serifs at the top and bottom. These alterations are normally sophisticated enough that the correct size and style Mint mark is used, so an embossed S will closely resemble a genuine S.
➤ Inspect the edge: If you look closely at the image of the edge of the coin, the reeding has a different depth and appearance directly below the embossed S. This is the area where the hole was drilled into the coin, then repaired.
It is possible that this altered 1889-S Morgan dollar was a “practice piece” for the alteration expert.
After this fake was produced and inspected, our counterfeiter most likely moved on to producing 1884-S, 1892-S, 1893-S and 1896-S dollar alterations, all of which would be considerably more lucrative.
Michael Fahey is a senior numismatist at ANACS in Denver, Colo
The Collectible Coin Protection Act
Chairman Gold and Silver Political Action Committee
Several numismatic leaders joined the Gold and Silver Political Action Committee (GSPAC) and met with congressional leaders and their staff on Capital Hill to discuss the importance of the recently introduced Collectible Coin Protection Act of 2012 (H.R. 5977). Provisions in this bill will provide strength to the Hobby Protection Act by adding language clearly and specifically targeting those “providing substantial assistance or support to any manufacturer, importer, or seller” of counterfeit items.
“We need to bring that law into the 21st century because of new issues that were not even contemplated decades ago, such as fake coins now being sold inside counterfeit holders fraudulently made to resemble the genuine, sonically sealed holders that reputable rare coin authentication companies use,” said Barry Stuppler, chairman and founder of GSPAC. “Counterfeit coins are costing unsuspecting buyers millions of dollars.”
The Hobby Protection Act was enacted in 1973 and amended in 1988. It requires manufacturers and importers of imitation numismatic items to mark them plainly and permanently with the word, “COPY.” In recent years there have been numerous reports of high quality replica coins entering the marketplace without that designation. While most of these coins are coming from China, there have been reports of counterfeiters working out of Turkey and areas of the Middle East.
To rally support for the bill, GSPAC held its first ever Rare Coin and Bullion Industry Congressional Awareness Event on June 27, 2012. Representatives of Dillon Gage Group, Industry Council For Tangible Assets (ICTA), Numismatic Guarantee Corporation (NGC), Professional Coin Grading Service (PCGS) and Stack’s Bowers Galleries provided presentations showing members of congress and their staff the many products and services the rare coin community offers. Congress members were also shown examples of counterfeit coins that U.S. collectors bought thinking they were genuine.
The Collectible Coin Protection Act of 2012 was introduced by Rep. Lamar Smith (R-Texas), Chairman of the U.S. House Judiciary Committee, and Rep. Fred Upton (D-Michigan), Chairman of the U.S. House Energy and Commerce Committee.
Under the leadership of the Industry Council for Tangible Assets (ICTA), the numismatic community and GSPAC was able to work with key representatives to craft the Collectible Coin Protection Act so that it will strengthen the law and to gain support from members of congress.
Also working with the numismatic community as a political consultant is former Louisiana Congressman Jimmy Hayes. Hayes says that the bill would significantly improve the Hobby Protection Act as follows:
- Include the distribution and sale of items not properly marked as being a COPY;
- Expands the provisions to include “any person who provides substantial assistance or support to any manufacturer, importer, or seller” who knowingly engages in any act or practice that violates the Act;
- Expands the ability for those who were sold counterfeit items to include the counterfeiter, their agent in the United States, or anyone who knowing “transacts business” in violation of this Act;
- Extend trademark violations and remedies to help third-party certification services protect against counterfeit holders.
These new provisions will allow collectors, dealers, and grading services to bring legal actions that are much more effective, with much stronger remedies than previously existed. It will allow those harmed to work with the Justice Department to bring criminal actions, where applicable.
“The existing law only deals with the manufacture and import of counterfeit items,” said Armen Vartian attorney for PCGS. “When the Hobby Protection Act was created, it was thought that this was all that was necessary.” However, with the growth of the Internet and its international reach, the proposed update, “helps deal with retail turnover.”
ICTA and GSPAC asks that every coin dealer, collector, and investor contact their member of congress and ask that they co-sponsor and vote for the Collectible Coin Protection Act, H.R. 5977. Contacting your member of congress will let them know that the numismatic community supports this Act and that their support is important.
To find the name and contact information for your local member of the United States Congress, visit house.gov and enter your Zip Code at the top right of the page. When you contact your representative, you should mention that the bill is revenue neutral and will not require additional appropriations. The bill will go a long way in combating counterfeit rare coins in the marketplace, saving collectors and investors millions of dollars in fraudulent transactions.
Scott Barman, Political Coordinator for the Gold & Silver Political Action Committee, contributed to this story.
Sponsors of the Bill
Rep. Lamar Smith (R-TX21)
Co-Sponsors of the Bill
Rep. Frederick “Fred” Upton (R-MI6)
Rep. Peter “Pete” Sessions (R-TX32) – Joined July 12, 2012
Rep. Henry Waxman (D-CA30) – Joined July 17, 2012
Rep. Bill Cassidy (R-LA6) – Joined July 19, 2012
Rep. Howard Berman (D-CA28) – Joined August 1 , 2012
Rep. Charles Boustany (R-LA7) – Joined August 2, 2012
Rep. Reid Ribble (R-WI8) – Joined September 11, 2012
Rep. Patrick “Pat” Tiberi (R-OH12) – Joined September 11, 2012
Rep. Doug Lamborn (R-CO5) – Joined September 13, 2012
Rep. Kenny Marchant (R-TX24) – Joined September 13, 2012
Rep. Brad Sherman (D-CA27) – Joined September 20, 2012
Please visit http://www.govtrack.us/congress/bills/112/hr5977
for the latest information on the Collectible Coin Protection Act.
The purpose of the Gold & Silver PAC is to identify, support and endorse candidates who understand the important issues that affect our community and oppose those who don’t. Paid for and authorized by the Gold and Silver PAC. Not authorized by any candidate or candidate’s committee.
Help Stop Fakes
|By Patrick A. Heller
July 03, 2012
It’s up to us all to put up or shut up on the matter of Chinese and other fakes. An investment of 15 minutes of your time will do it. It could reap benefits for you worth much more than that. On June 22, H.R. 5977 was introduced into the U.S. House of Representatives. The bill, titled “Collectible Coin Protection Act” was co-sponsored by Rep. Lamar Smith, R-Texas, and Rep. Fred Upton, R-Mich. Smith is chairman of the House Judiciary Committee and Upton is chairman of the House Energy and Commerce Committee, the two committees that will likely handle the bill. The main purpose of this bill is to add language to the existing Hobby Protection Act to also target those “providing substantial assistance or support to any manufacturer, importer, or seller” of counterfeit items.
Since the Hobby Protection Act was enacted, a significant number of counterfeit coins have come into the United States, especially from China. The limited rights and remedies of the existing law discourage law enforcement from pursuing counterfeits created beyond America’s borders. By adding significant importing and selling activities to the list of illegal acts, it will be easier to fight counterfeiters located in other countries by depriving them of major U.S. customers. Note that the law does not criminalize those who may be victims who purchased such items or coin dealers who may accidentally have such pieces in their inventory.
Threat of Counterfeit Coins from China
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The easy availability of Chinese counterfeit coins has prompted the U.S. Secret Service to begin working with coin dealers to gain education on this problem. There has also been increased activity by customs officials and the offices of U.S. attorneys to seize incoming shipments of counterfeits. Recently, eBay has eliminated its category where “copies and replicas” were offered for sale.
The Industry Council for Tangible Assets, ICTA, the national trade association for rare coin and precious metals dealers (full disclosure: I have served ICTA as treasurer and on the board of directors for the past decade), is the prime mover behind this consumer protection legislation. If the effort is successful, this would be the first national law that ICTA has sponsored. Previously, ICTA has supported state efforts to exempt the retail sales of rare coins and precious metals from state sales tax and has worked with officials at agencies such as the IRS, FTC and TSA to prevent onerous regulations on dealers and the public.
The bill was carefully crafted so that it does not affect the federal budget. Further, it is narrowly focused to avoid including any language to which any legislator might object. The game plan to achieve enactment of this bill is to persuade at least 100 members of the House of Representatives, Republican and Democrat, to sign onto this bill, H.R. 5977, as co-sponsors. If this can be accomplished, the prospects for this bill becoming law are substantially increased.
I personally would prefer never to bother with politicians. Yet, I joined with other members of the coin industry to visit congressmen and congresswomen in Washington, D.C., last Wednesday to promote this bill and solicit co-sponsors. I will also be writing to urge some Michigan congressmen to become co-sponsors of H.R. 5977.
There are several reasons why taking a little bit of your time to contact your representative (especially if they are members of the Judiciary or the Energy and Commerce Committees) to urge that they become co-sponsors of this bill would be a worthwhile investment of your time. This goes for both dealers and collectors.
First, from my past involvement in gaining a sales tax exemption for rare coin and precious metals bullion sales in Michigan, I learned that very few people bother to contact their legislators. On any particular bill, if as few as 10 people contact the legislator urging support, that is considered a landslide that virtually guarantees a yes vote. Taking the time to send an email or make a phone call counts far more than most people realize.
Second, because this bill has been sponsored by the chairmen of the committees that will consider it, that signals that it will almost certainly be taken up and probably passed along to the full House. This is not a bill destined to be ignored.
Third, this bill is basically consumer protection legislation that has no impact on the federal budget. It will support the efforts of the Secret Service, U.S. Customs, and the Justice Department to stop illegal counterfeits. Generally, politicians would like to be seen as supporting consumer protection, especially where it has no impact on the federal budget and has no language to which any legislator might object.
Fourth, ICTA would likely pursue other legislation in the future that would benefit coin collectors and precious metals investors (which would thereby be a benefit to dealers). If ICTA establishes a track record for getting this bill into law, that would add credibility to any future legislative efforts.
Fifth, a direct personal benefit to you would be the lower risk of inadvertently purchasing a counterfeit.
Contacting a representative should be done by email or telephone as mailed letters can take 4-6 weeks for delivery because of security concerns. Go to http://www.house.gov to find your legislator and either send him or her an email, or find the phone number to call their office. Do not expect to contact the representative directly, as virtually all communications are handled by staff. However, the staffs are responsible for sharing all communications with their bosses, so anything you discuss with the staffers will accomplish your purpose.
Whether you call or write, it should only take about 15 minutes of your time. In your communication, first state that you are calling/writing to urge the representative to consider co-sponsoring and voting for H.R. 5977. Next give a few reasons why you ask for this action, which you can pick up from this article or insert some that are specific to your circumstances. If you have contributed to the representative’s campaign, it wouldn’t hurt to mention that. Conclude by repeating your request that they co-sponsor and support H.R. 5977 and offer to answer any questions they might have. Thank the representative for his or her attention and consideration. Throughout your communication, be polite and respectful and avoid being nasty. That’s all you have to do.
If you do contact a representative, it would be helpful if you could let Eloise Ullman at ICTA know about it. You can reach her at (410) 626-7005, or email her at Eloise.email@example.com.
Patrick A. Heller owns Liberty Coin Service in Lansing, Mich., and writes “Liberty’s Outlook” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Coin Week (http://www.coinweek.com and http://www.coininfo.com). He also writes a bi-monthly column on collectibles for “The Greater Lansing Business Monthly” (http://www.lansingbusinessmonthly.com/articles/department-columns). His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.
The problems of counterfeit coins and “coin doctoring” are two issues that have the potential to harm the coin market in the long term if not properly addressed.
For replicas, eBay sellers typically pictured coins marked COPY in accordance with the Hobby Protection Act. However, buyers reported receiving coins without the required clear markings. To average collectors, many of these coins were good enough to pass as legitimate; especially with copper and copper-nickel coins that did not require precious metals to fully replicate the originals. For example, replica large cents in circulated condition were highly deceptive.
A long-term effect of the sale of these replicas marked with COPY is that these “coins” will eventually get passed down to future generations, and those who will receive them, likely unaware that they are replicas, could sell them as coins, whereby the pieces might trickle into the marketplace, casually included in collections of genuine coins.
Now that eBay has placed restrictions on the sale of replicas, a major supply point into the United States has been cut off. Especially when one considers that the sale of low-level forgeries potentially funded more advanced studies for counterfeiters for high-end coins, the new eBay policy should prove beneficial to the market in the long-term.
The ongoing discussion of “coin doctoring” continues to bring this problem to the attention of the hobby, and the multi-year struggles of the Professional Numismatists Guild to adopt a definition shows the problematic nature of the topic as the line between conservation and deceptive surface manipulation is often a fine one.
Like with the counterfeiting problem, as technology improves and the techniques of coin doctors improve, the potential for coin buyers to be harmed expands.
The long-term threat to the hobby is that once a coin buyer is burned, he or she may never return to buy another rare coin.
Steve Roach is a Dallas, Texas, based rare coin appraiser and consultant. He also works with 19th and 20th century European and American paintings is an accredited member of the International Society of Appraisers and sits on its board of directors. Steve is also the associate editor of Coin World. Visit Steve online at www.steveroachonline.com
Keen Eyes Catch Counterfeit Coin
|By Skip Fazzari, Numismatic News
September 07, 2011
Other News & Articles
This article was originally printed in Numismatic News.
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I was instantly suspicious. In many cases when a submitter sends an expensive or rare coin in for authentication/grading using the “Walk-Thru” or “One Day” service option there is a problem with the coin. In this case, the 1875 $3 piece with a mintage of just 20 proofs had an expertly repaired rim. With just a little more effort, using one more treatment I won’t divulge, it would have been extremely hard to detect the repair. I suspect that many coins like this one are sent to each grading service with the hope that one will slip past a few inattentive graders and get into a slab.
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The same day, a customer requested fast service on two U.S. Assay Office of Gold (USAG) $20 coins that were in a deceased relative’s collection. One piece was a bagmarked, Semi-PL grading Extremely Fine. The other coin was a harshly cleaned Very Fine +.
Right away I noticed that the gold color of the pieces was different. One coin was yellowish, while the other was close to the rose-orange color we often seen on Liberty double eagles. While it is said that gold is less reactive to the atmosphere, sooner or later you will find a coin with some form of naturally occurring patina. Professional graders refer to this “color” as “skin,” and it can be very attractive – thus increasing the coin’s eye-appeal and perceived originality as cleaning destroys the skin.
Nevertheless, the color of the Semi-PL piece reminded me of the somewhat dark patina found on many of the “Omega” high reliefs from the 1970s. The basic coin has a “butterscotch” color with a dark rose patina around the relief. This alone made me suspicious of the higher grade piece. Fortunately, I had a similar coin (though lower grade) in the same box to use for comparison. Upon microscopic examination, I became more convinced that the EF coin was a counterfeit. The surface between the letters, which was protected and less impaired from the impact marks, was wavy (Fig 1). I knew that these coins had been counterfeited in the past so I went to the Internet to see what I could discover. My search proved convincingly that the Semi-PL piece was part of the “Franklin Hoard.”
The other coin in the box was tougher to authenticate as there was virtually no original surface remaining because of the cleaning. Since the counterfeit dies used to produce the “Franklin” fakes had been made using a genuine coin as a model, both coins appeared to be struck from the same dies. For instance, the “I” in “United” was missing its top serif. Additionally, the die polish lines I could find seemed to match on both pieces; however, those on the fake were less pronounced. Information on the Internet indicated that the reed count found on the fakes was different from that on the genuine coins and that was the case here. Did the counterfeiters do this on purpose to more easily identify their work? Evidence was mounting that the lower grade coin was genuine.
If either of these coins had been sent in singly, our job of authentication would have been more time consuming. Luckily, with a known counterfeit comparison piece along side, the much abused coin screamed out, “I’m OK.” The harshly cleaned genuine piece (Fig.2) still shows evidence of metal flow behind the numerals and under the banner. The surface of the fake (Fig. 3) is smoother and uniform in color. Some of the marks you see in the micrograph were transferred from a genuine coin when the fake dies were made.
When purchasing coins such as these, it’s best to stick with coins that are certified by a major grading service. Fortunately, it was not a total loss for our customer. The counterfeit is gold and because of their historical nature, many notorious fakes such as the “Omega” coin and the “Franklin Hoard” piece bring prices in excess of their melt value.
Teen charged with passing funny money
By Jim Stevens
Posted: May 23, 2011
Waukesha – A Hartland teen has been charged with passing counterfeit money that he printed at home earlier this year.
Zachary S. Siller, 17, of 382 Manchester Lane, was charged in Waukesha County Circuit Court on May 12 with a felony count of forgery and misdemeanor counts of theft and possession of drug paraphernalia.
According to the criminal complaint, Siller and another boy went to an apartment at 423 W. Capitol Drive in Hartland on Feb. 9 and asked Kelly Cole for change for a $10. Cole gave the teens change and then noticed the bill was undersized and did not look right.
On Feb. 10, Siller went to Olympic Car Wash, 455 Ryan St., Village of Pewaukee, and asked an employee for change for $10. The owner of the carwash, John Loukopoulus, intervened because he thought the money was counterfeit.
Police questioned Siller, who admitted to printing the money with his mother’s printer, creating a batch of six $10 bills. Along with the exchange at the apartment, Siller said he exchanged a bill at Health and Happiness in Hartland.
Police searched the apartment and found the charred remains of what was a counterfeit $20 bill. Siller admitted to making counterfeit $20, $20, $5 and $1 bills, but only the $10 bills were good enough to use, the complaint said.
Also, police found marijuana bongs, a marijuana pipe, a ceramic bowl for smoking marijuana and a metal scale.
Also, police found a wallet owned by Tyler Kinley, who reported his wallet was stole from his vehicle, along with darts and three cases of beer, from his vehicle in Hartland sometime late Nov.3 or early Nov. 4.
Siller is scheduled to make his initial appearance in court June 1.
Hartland police said earlier this year that a 16-year-old Hartland boy, who was with Siller at the West Capitol Drive apartment, might face charges in Juvenile Court.
by F. Michael Fazzari
This article was originally printed in the latest issue of Numismatic News.
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The concern raised by Richard Francis Jr. about helping counterfeiters improve their product by revealing diagnostic imperfections found on fakes is an old one. I believe he has taken the wrong approach to the matter and offered well meaning but impractical solutions.
As I read his “Viewpoint” recommendations, “Don’t Reveal Detection Secrets” in the Sept. 7 issue, I was transported back to the early 1970s where this matter/question was considered, addressed, and resolved. I cannot believe that decades later the same concern has arisen. Since I have witnessed both sides of this subject firsthand as a collector and than as a professional authenticator, please allow me to rehash the history of this dilemma and restate its solution for newcomers to our hobby.
Forty-plus years ago the average collector had little protection against counterfeits. A knowledgeable dealer was your best defense. The area I grew up in had one or two “go to” dealers when a coin was in question. Methods to detect fake coins consisted of weights, measurements, specific gravity tests, and word-of-mouth diagnostics, many of which I later discovered proved to be useless. The hobby had some noted authentication “experts,” but some sort of clearing house to authenticate coins was needed.
I can state for a fact that information regarding newly discovered counterfeits was a big concern to the “movers and shakers” in the ANA who sought to establish an authentication service for that organization. There were two sides lined up against each other. One group, including several founders of the ANA’s Certification Service, believed that no specific information about counterfeits should be divulged. That way, the counterfeiters could not learn from their mistakes. One pioneer authenticator in this group published an entertaining column featuring fake coins he was aware of, yet I cannot recall even one instance when he actually gave readers a single useful diagnostic to look for on counterfeits. Another in the group would not even allow ANA authenticators access to one of his major rarities to use as a comparison piece when he owned several examples. He was afraid that the diagnostics for the genuine specimens would somehow get back to the counterfeiters. The other group of numismatists, a minority, believed that all the diagnostics we found on each new counterfeit should be shared universally. This would help protect “informed” dealers and collectors from purchasing fakes. They understood that if this approach were taken, it would be unavoidable to keep information from the fakers and they could improve their products at a much faster pace. At any rate, the International Association of Professional Numismatists (IAPN) was publishing counterfeit bulletins on specific fake coins on a regular basis for their members and no one seemed to object.
By 1973, the dissemination of information about new fakes seen in the United States fell into our hands at the ANA’s Certification Service. At first, the director, Charles Hoskins, walked a thin line between the opposing factions. Then, to keep everyone happy, we started to share tidbits of diagnostic information with submitters; just enough to identify a fake and convince them that we knew what we were doing. At the same time, we kept internal records of the diagnostics found on the counterfeits – most of which we didn’t publish. Behind the scenes, Hoskins shared all the diagnostics of new fakes with the personnel at the Bureau of the Mint Laboratory. Eventually, we started to publish diagnostics for fakes in the Numismatist magazine for all to see. I know for a fact that even today, the columns written in the numismatic press by authenticators from various third-party grading services are some of the most popular items in that media.
During my first year as a professional authenticator (1972), an astounding thing happened. Rather than concentrate on the diagnostics of counterfeits, I realized that it was more important for me to know what a genuine specimen should look like! I could record all the details found on specific fake coins but they would become obsolete with each new generation of counterfeits. Evidence for this became quickly apparent. There was a guide to detecting counterfeit gold coins by Alfred Dieffenbacher in our library. I believe it was published in Europe around 1964 as a counterfeit detector for major banks. It had photo diagnostics of dozens of fake gold coins. Many coins submitted to us for authentication were in that book; yet within a few months, we never used it again.
Our detection skills surpassed the book and the coins it showed were rather crude when compared to the new counterfeits entering circulation. The simple fact was, practice makes perfect. As new technologies were developed over the years, the counterfeits improved with or without help.
That’s where we stand today. In the ensuing years, authenticators have amassed files on genuine coins. By studying high grade examples for diagnostic markers, even low grade specimens can be identified. There have been some amusing bumps along the way. In one case involving the 1955 Doubled Die Lincoln cent, after recording all the markers found on several different die states of genuine coins, there was one that I did not divulge to anyone, not the Mint Lab, not even my associates. Imagine my surprise years later when “my personal diagnostic,” the die polish from the “T” of “Cent,” was pictured in the Numismatist magazine by other authenticators. There are no secret diagnostics. Anyone with a group of similar coins and a microscope can find them all. That’s how the diagnostics for the 1942/1 Mercury dime were plotted. At the certification service in Washington, D.C., we received a half roll of gem BU coins. My first thought was that these rare coins in this condition could not possibly be authentic. They were genuine. That’s where I first recorded the diagonal die polish at the base of the faces on the reverse that we use to authenticate this variety today. There are several other markers on those coins that have never been shared with anyone. It is a good bet that someone has even found my “exclusive” diagnostic marker on this variety. I have been waiting 37 years to see it published one day in some column.
That’s enough background. I’m not going to discuss any of the flaws associated with the censorship or bureaucratic solutions concerning the release of information proposed by Mr. Francis to solve what I believe to be a non-existing problem. Instead, I’ll explain why I believe it to be in our best interest to continue to reveal some of the diagnostics on counterfeit coins.
First and foremost, it is not easy to make a deceptive counterfeit coin. These days it takes a “big” operation. I’ll be the first to say that even with Col. Sanders “secret” recipe for fried chicken, I couldn’t come close to producing a good product. So it was 45 years ago. The Beirut counterfeiters had the coining presses and dies but they were ignorant of the press tonnage to use and annealing process for the dies. The coins they were striking were so crude that authentication “experts” at the time thought the Beirut fakes that flooded the U.S. market were “cast” copies.
Hoskins and I would often joke that we could go over there and teach them how to make really excellent fakes that would defy detection by “so-called” authentication experts and major dealers. How? Because we knew what the genuine coin should look like at the “microscopic” level.
While I’m on the subject of microscopes and magnification, let me make another point here. In 1985, I told a seminar student that the days of using a hand lens for authentication were over. Counterfeits were getting too deceptive. I had a 13-year head start on him and the fakers as far as studying coins under high magnification. Nevertheless, I told him that if he would start viewing genuine coins using the electron microscope at his office, in a few months he would surpass me and virtually everyone in the world with regard to the surface characteristics of genuine coins. All this, our “playbook” to detect fake coins has always been available to the counterfeiters too! So while it’s true that many fakes can defy detection, they are not perfected.
Next, it is virtually impossible to keep information out of the hands of counterfeiters. One year in a counterfeit detection class at the ANA Summer Seminar, I revealed a single diagnostic “marker” found on a recently discovered deceptive $10 Indian to a class of about 20 students. Within a month, the exact same die-struck counterfeits appeared at the authentication service with only that one particular defect removed from the counterfeit dies. That’s one reason we never published all the characteristic diagnostics found on each fake. What we have done by revealing even specific diagnostics is to help the counterfeiters eliminate entire types of defects from their work. For example, the “wormy tool marks” I first discovered and named on the “Omega” High Relief coins were never seen again on the “newer” counterfeits made in the 1980s. Sooner or later, without our help, they would have disappeared from counterfeits anyway as their die making methods improved.
Finally, I’ll repeat my response to this “Viewpoint” argument in its simplest terms. Any counterfeiter has access to genuine coins. The closer he is able to duplicate the “look” of a genuine specimen, the more deceptive his fake will be. It becomes a simple matter to critique their own work, correct any defects, and strive to make better fakes without reading about “diagnostic markers” in the numismatic press. That’s where dealers and collectors have been alerted to fakes in the past and they still deserve this protection. The system works for those who care to be informed. The major third-party grading services have been a boon to the collecting public with respect to counterfeits. I for one wish the diagnostics for every fake they identify were made public on the Internet. It would make my job as an authenticator easier.
This Viewpoint was written by F. Michael Fazzari, a professional coin authenticator and columnist for Numismatic News. Opinions expressed in “Viewpoint” are not necessarily those of Numismatic News. To have your opinion considered for Viewpoint, write to David C. Harper, Editor, Numismatic News, 700 E. State St., Iola, WI 54990. Send e-mail to firstname.lastname@example.org.
Viewpoint: Don’t Reveal Detection Secrets
|By Richard L. Francis Jr., Numismatic News
August 26, 2010
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This article was originally printed in Numismatic News.
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If you were a football coach would you make your “play book” available to the opposing team? The answer is obviously “no” as that would enable the opposing team to better compete against you.
As crazy as the above scenario may seem, that is exactly what the numismatic community is doing each time it makes information available that enables counterfeiters to produce a better product.
I am certainly not faulting the numismatic press, which publishes such information, as their intentions are good. However, instead of working with the counterfeiters, we must work against them. We can no longer ignore the elephant in the room and should most certainly stop feeding him peanuts.
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At this time, information regarding counterfeit detection is readily available to all who wish to find it. To me, this is comparable to sharing arms and ammunition with an opposing army. While we must inform the numismatic community how to detect counterfeit coins, it must be done in such a way as to keep counterfeiters from using this same information against the ones it was intended to protect.
To this means let me suggest a possible solution. I feel it would be beneficial to the numismatic community if information regarding counterfeit detection was treated as a business threat confidential information. In other words, treated with security and only released on a “need to know” basis to authorized personnel. By doing so, this would limit the counterfeiter’s ability to know which fakes have been identified, and how, making it more difficult for them to improve their products.
To the person who insists on having information regarding counterfeit detection readily available, let me ask you this. What value does this information have once placed in the hands of a counterfeiter? The “markers” noted that help identify the counterfeit(s) will certainly be corrected, the result being a more deceptive counterfeit. What value would Colonel Sanders’ fried chicken recipe have if it was available to everyone? The answer is quite obvious. The numismatic community must contain this “leak.” Counterfeiters cannot use information they do not have.
While the noted recommendation may seem drastic, unfortunately the implementation of such a plan is necessary in our battle against counterfeiters. In order to implement this program we must first ask the following questions. Who will be the caregivers of this information? Who will have access to this information? How will this information be stored and shared?
Let’s look at each in turn. Who will be the caregivers of this information? I feel the caregivers should be the certification services as it is their business to distinguish a genuine coin from a counterfeit coin. They are our first line of defense against the counterfeiters. They are the “go to” group for the established dealer, experienced numismatist or beginning collector.
On to our second question. Who will have access to the information? I feel this group should consist of any established coin dealer, as well as established ANA members. For the purpose of this proposal let’s define “established” as five years or more.
I would further suggest that any established coin dealer or ANA member who is part of the group be allowed, upon their personal recommendation, to add a numismatist to the group. This would essentially offer access to those with a legitimate need to have the information while making it more difficult for the counterfeiters to know which of their products we can identify and how. It would also encourage those who are not ANA members to join as well as encourage those who do not have a “dealer relationship” to start one.
Let us now address our last question. How will this information be stored and shared? I would suggest the use of a secured website. While much could be said about the design and features of the proposed website, I do not wish to get off point.
The idea of a proposed website begs the question, who will run the website and how would it be funded? I recommend the website be run by the certification companies or the ANA. While there would certainly be some additional costs in relation to certification fees or ANA dues, that is a small price to pay for what the numismatic community would receive in return.
To make this work a hobby commitment would be required by the numismatic press, certification companies, dealers and collectors.
In conclusion, this possible solution may be inconvenient to some, but we must look at the bigger picture. We must look at the greater good and do what is best for the future of our hobby.
Are we, as a group, ready to stand up and take action? If not, then we deserve what we get.
Richard L. Francis Jr. is a hobbyist in Cape Girardeau, Mo.Newer Posts »