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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.

Proactive response

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.

Reported counterfeits

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/.

Prospector arrest

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.

Other resources

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. ■

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

Coin Protection Act H.R. 5977

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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 david.harper@fwmedia.com.

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