Further to the issue of counterfeit bullion products this one is from a good friend of mine who is also a precious metals dealer in Red Deer, Alberta. TL
[admin:*Thank you, TL, for this information! I have had this concern for quite some time.]
—– Original Message —–
Sent: Monday, September 18, 2017 9:38 PM
Subject: Re: The Jürs Newsletter: Counterfeit gold and silver from China
Hi Al….. This issue has been a source of stress for me for the last five years. We have seen a variety of this material come through the doors of my shop and for the most part it is easy enough to detect by simple examination. Something not on the list are the Perth Mint gold bullion bars. Packaging is excellent but the bar itself is a dead give away. Recently several Edmonton dealers got caught by scammers with these bars. It was their own greed that lead to them buying those things without close examination likely because the seller was asking considerably less than market value.
I have had an opportunity to examine a gold clad tungsten core maple leaf. Any dealer worth his or her salt would catch these just by looking at them. I highly doubt we will have any fool attempt to sell them to us as they will be talking to the mounties explaining to them where they got the coins from.
We do perform tests on all gold bullion in the event they actually make something of half decent quality in Red China. The Fisch test will not detect proper dimension and weight gold counterfeits but a simple magnetic slide will do and other methods will easily detect gold clad coins.
The point I am trying to make is that counterfeit bullion items are relatively easy to detect. You are very unlikely to ever get any from a bullion dealer whose main business model is buying and selling bullion. I would avoid buying any bullion from online sources with the exception of established online vendors. Buying from pawn shops, part time dealers or flea market coin vendors is also risky.
If you want to seek out deals….Take some time to familiarize yourself with the security features of the bullion product you prefer and stick to those type of coins. There is no shame in having a bullion stash of all the same type of coins.
Coins in slabs from PCGS or NGC can be verified online. Those grading companies are now showing alerts if a coin and holder duplicate has been detected. I have yet to see counterfeit numismatic slabbed coins except in journals. The best defense against getting stung is know the characteristics of the coin you are considering. Don’t buy a rare type coin you are unfamiliar with just because it is a good deal.
Just remember…. if a deal is too good to be true, it probably isn’t.
There appeared in the American media, a breathless story about the alleged “wreck of the SS New York” and coins she might have been carrying.
In point of fact, there was no such ship, no such storm and no such sinking.
The story had been invented out of whole cloth, based on ‘Issac’s Storm” book on the devastating 1900 Galveston hurricane and the finding of the SS Central America, to explain the appearance of coins now being minted in China.
These coins are: Morgan silver dollars of every year and mint, gold U.S. Indian head $2.50, $5.00 and $10 denominations
Chinese-based companies make these coins for the American gullible coin trade and by doing so, they are counterfeiting American coinage
With the collapsing American economy, many Americans are rushing to invest in gold; either coins or bar, and also silver. One of the most popular forms of this investment are American coins. Where there is a need, there is always someone to fill it and in this case, the filling consists of the massive counterfeiting of gold coins, silver coins, and even Swiss gold bars in China.
Initially, it appeared they were only faking Morgan dollars, but then it turned out they were also making $20 Liberty, and Indian Head gold $2.50, $5, and $10 coins, of all dates. Evidently, this is extremely easy with today’s computer-and-laser-die-cutting technology, and the fakes are being die-struck in vast quantities, not cast, and visually at least, are superb copies.
On the financial scene, the rising price of gold is drawing a frenzied horde of investors and as more and more use the precious metal for investment, the price continues to rise.
There is one very serious flaw in this process, a flaw that has more to do with human nature than anything else. Once the hedge funds were the darling of those with extra money and they rushed to invest with the same zeal that the goldbugs are now grabbing gold but like the hedge funds, most of which were pure fraud, the gold market also has its flaws, the most serious one of which is the indisputable one that at least fourteen Chinese firms are pouring out an incredible flood of entirely faked coins, both bullion and numismatic.
Counterfeiting foreign gold or silver coins or bars is not illegal in China and, as usual, the Chinese government has turned a blind eye to illegal acts that enrich their economy. By laser-cutting dies from original pieces, the counterfeiters are able to produce coins that are visually almost perfect but because they are Chinese, the makers are determined to increase their profits by adulterating the contents of the coins.
The hundreds of examples of fakes, to include American and foreign coins and, most interesting, various gold bars supposedly coming from prestigious Swiss banks, are made of less than pure gold and silver and to offset the lighter color of adulterated gold, the fakes are then plated with 24k gold for the proper rich color.
It is estimated that there are millions of dollars in fakes now circulating in the United States, the Middle East and gold-hungry India.
It is also to be noted that the Chinese forgers are now making coins that show honest wear, that are not UNC but only VG+ so that a collector seeing what appears to be a used coin believes that it is genuine.
Fake Silver Dollars From China
China is the world’s capital of counterfeiting, with coins, antiquities, fossils, computer software, music CDs, movie DVDs, books, paintings, clothes, sneakers, jewelry, watches, handbags, toys, sporting goods, film, batteries, food, baby formula, pet food, medicine, cars, car parts, trucks, and much else.
15 to 20 percent of all goods in China are counterfeit.
The problem of Chinese counterfeiting has gone on for years and appears to just worsen over time. Fakery in China is official government policy or at least officially tolerated. Whenever major news of Chinese counterfeiting surfaces in the West, the Chinese government takes highly publicized and sometimes dramatic but ultimately superficial steps to try to stop it.
The true nature of official Chinese attitudes is more likely along the lines of statements from Chinese officials saying that counterfeiting is the cost that foreign companies must pay to be able to do business in China.
China is a developing country and doesn’t appear to recognize international law regarding intellectual property. To the Chinese, copying is entrepreneurship, with copyrights, trademarks, and patents being foreign concepts and largely ignored. Chinese society as a whole in its energetic drive toward economic prosperity seems to have chosen fakery as a shortcut, ignoring conventions in the rest of the civilized world.
The counterfeiting of general goods and infringement of intellectual rights (such as software piracy) in the People’s Republic of China (PRC) comprises a significant portion of China’s overall economy.
The manufacture of counterfeits is primarily centered in the two southern Chinese provinces of Fujian and Guangdong.
While many of the fake coins made in China are widely advertised in the American print and television media and in coin collector publications, many are also sold on eBay
These single-coin auctions are usually listed with a starting price of 5 or 10 cents, and they usually close around those prices when the swindler gets a buyer. These fake coins cost the Chinese about 50 cents to make but the swindlers make most of their profit from the shipping expense they collect from their victims.
This is a common practice with China-based sellers on eBay. They sell the counterfeit item very cheaply, but then charge as much as $70 or more for shipping. Doing this serves two useful functions.
First, their Final Value Fee expense is minimal, since eBay bases this fee on the auction’s closing price.
Secondly, if an item is returned to the seller for some reason, the buyer can only recover that minimal bid amount since shipping and handling is typically nonrefundable.
It is a violation of United States federal law to sell unmarked replicas. The U.S. Hobby Protection Act, first enacted in 1973 (Public Law 93-167 15 US Code 2101 et seq) requires manufacturers and importers of imitation numismatic items to mark them plainly and permanently with the word, “COPY” in accordance with the Code of Federal Regulations (16 CFR part 304).
Big Tree Coin Temple Coin Shop is located in the Fujian (also known as Fukien) province in the southeast portion of the People’s Republic of China.
This area is well known to be a hotbed of counterfeiting activity and there are approximately 100 competitors who are manufacturing fake coins. This firm buys genuine coins and genuine PCGS slabs to use as models from which to make counterfeit coins.
The Big Tree Coin Factory is the largest of its type in China. It produces in excess of 100,000 fake coins per month for Chinese coin types alone and they sell about 11,000 counterfeit U.S. coins per month, mostly on eBay or through dishonest coin dealers.
Big Tree Coin Factory produces complete sets of counterfeit Morgan dollars as well as fake Dansco albums to house the collections.
Counterfeit U.S. coins cost on an average of 50 cents each – because the copper and nickel planchet alloys cost the firm more to make.
Big Tree also counterfeits Indian Head and large cents.
Dates on the fake Coronet cents are 1854 and 1857.
Dates on the counterfeit Indian Head cents display a wider range: 1869, 1870, 1871, 1872, 1877, 1908-S and 1909-S.
It should be noted the coins struck by the U.S. Mint, regardless of date, are all still legal tender, and thus subject to U.S. coin counterfeiting laws. It is illegal for Chinese firms to sell these coins in the United States, even via eBay.
Big Tree Coin Factory’s 1909-S Lincoln, V.D.B. cent is the most deceptive.
Their counterfeit coins are processed in a rock tumbler and then dipped in weak acids, to “age” them and take the sharpness off the edges.
The average collector now accepts these coins without question.
Big Tree Coin Factory’s uses genuine examples for his models, and produce nearly undetectable counterfeits of certain U.S. coin types because he is producing them on the same types of machines from which the genuine coins were struck.
U.S. Coins being counterfeited in China
- Seated Liberty Half Dollar 1861-O “S.S. Republic”
- 1857 “S” Shipwreck Gold Coins “S.S. Central America”
- 1858 “S” $20 Liberty Shipwreck Gold “S.S. Republic”
- $10 Gold Eagles, as well as the $2.50 and $5.00 pieces issued by the Southern Mints of New Orleans, Charlotte, NC and Dahlonega, GA. These coins bear the mint marks of O, C, and D
- $10 Eagles were minted in New Orleans and others in Philadelphia. (Coins from the Mother Mint bear no mint mark.)
- The U.S .Morgan silver dollar. All dates and all mint marks
- The U.S. gold coins viz the $2.50, $5.00 and $10.00 Indian head issues
- The U.S. copper penny viz 1909 S vdb
- Three gold Imperial Russian roubles from the reign of Nicholas II
- A gold 20 franc coin with the head of Napoleon I on the obverse
- The South African Krugerrand
- British sovereigns and half sovereigns of different monarchs and dates
- The 1853 United States Assay Office proof gold $20
Ancient coins being counterfeited in China
- Athenian Owls
- Alexander the Great Coins
- Medusa Coins
- Thracian Tetradrachms
- House of Constantine
- Carthage North Africa AR Tetradrachm 270-260 B.C.
- Arsinoe II 316-270 B.C. AV Octadrachm
- Siris and Pyxos 560-510 BC AR Stater
- Alexander the Great AR Tetradrachm
- Sicily, Syracuse Silver Decadrachm 479 B.C. , B.M.C. #63
- Syracuse , Sicily AR Decadrachm by engraver Kimon 405-400 B.C.
- Julius Caesar (45-44 BC) Roman Gold Aureus
- Titus 79 – 81 AD Roman Gold Aureus
- Caligula/Germanicus Gold Aureus Emperor 37 – 41 AD
- Commodus Roman Imperial Gold Aureus 177-192 A.D
- Shekel of Bar Kochba War 132-135 C.E
- 1921 Mascot mexico snake 50 pesos gold
- Russia 50 rouble
- ‘CREDIT SUISSE’ 1oz 24ct gold bar serial numbered
- Draped Bust Coins
- Saint-Gaudens Double Eagles
Modern World Gold Coins Being Counterfeited in China
- Australian Kangaroo Gold 1 oz.
- Australian Kangaroo Gold 1/2 oz.
- Australian Kangaroo Gold 1/4 oz.
- Australian Kangaroo Gold 1/10 oz.
- Australian Kangaroo Gold 1/20 oz.
- Austrian Gold Philharmonic 1 oz
- Austrian Gold Philharmonic 1/2 oz
- Austrian Gold Philharmonic 1/4 oz
- Austrian Gold Philharmonic 1/10 oz
- Canadian Maple Leaf Gold 1 oz.
- Canadian Maple Leaf Gold 1/2 oz.
- Canadian Maple Leaf Gold 1/4 oz
- Canadian Maple Leaf Gold 1/10 oz.
- Canadian Maple Leaf Gold 1/15 oz
- Canadian Maple Leaf Gold 1/20 oz
- China Gold Pandas 1 oz.
- China Gold Pandas 1/2 oz.
- China Gold Pandas 1/4 oz.
- China Gold Pandas 1/10 oz.
- China Gold Pandas 1/20 oz.
- Germany 20 Marks
- Great Britain Britannia I oz.
- Great Britain Britannia 1/2 oz.
- Great Britain Britannia 1/4 oz.
- Great Britain Britannia I /10 oz.
- Great Britain Gold Sovereign 1 Sovereign
- Great Britain Gold Sovereign ½ Sovereign
- Netherlands 10 Guilders
- Switzerland 20 Francs
- Isle of Man Cat Coin I oz.
- Isle of Man Cat 1/2 oz.
- Isle of Man Cat 1/5 oz.
- Isle of Man Cat 1/ 10 oz.
- Isle of Man Cat 1/25 oz.
- Mexico 50 Pesos
- Mexico 1 Onza
- South Africa Krugerrand 1 oz.
- South Africa Krugerrand 1/2 oz.
- South Africa Krugerrand 1/4 oz.
- South Africa Krugerrand 1/10 oz.
- U.S. American Eagles 1 oz.
- U.S. American Eagles 1/2 oz.
- U.S. American Eagles 1/4 oz.
- U.S. American Eagles 1/10 oz.