Mass Counterfeiting of American coins

February 27, 2009

by Brian Harring

brianharring@yahoo.com

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.

The good news is that these fakes are readily detectable with a 0.01 - gram scale, as the Chinese in their greed are using lower carats of gold and lower grades of silver than the genuine coins, to maximize profit, and thus, in most cases, the fake coins and bars are lighter than the real ones. In a few cases, the silver coins of high numismatic interest are actually OVER weight - it appears that the supply of accurate planchet stock is a major difficulty for the forgers.

Here are links to a two-part article about this in Coin World Magazine:

http://www.coinworldonline.com/count...

http://www.coinworldonline.com/count...

Note: They are even faking PCGS and ANACS slabs!!:

http://www.coinworldonline.com/count...

A friend who has an extremely wealthy friend in Europe (on the order of several hundreds of millions) asked this person to make enquiries at his bank. The bank told him candidly that indeed, the Chinese are also faking sovereigns, half sovereigns, French 20 Franc gold, and various denominations of Nicholas II Russian Rubles, of all dates, as well as Swiss gold bars. They said any gold bars they are offered for purchase are both weighed and the serial numbers checked with the manufacturers. The Chinese do not know the serial and manufacture date numbering systems on the gold bars, and so that error is quickly detectable.

The US Secret Service has just this week been made aware of this problem, which was new to them, and if they decide to launch an investigation, they have indicated that while they cannot do anything about the operations in China, they can, and will, seize any counterfeit US coins they come across. Dealers in these fakes would also be liable to fines and jail time. Foreign fakes are not under their purview, but if that business turns out to be substantial, there could conceivably be an FBI investigation of fraud in interstate commerce, targeting companies who are mail-ordering fake foreign coins. Individuals who have been cheated might also sue their suppliers - in short, this could turn into a huge mess.

General appearance aside, it is very easy it is to spot fakes - just with a scale reading to 1/00th of a gram, and a table of the correct weights and sizes of the coins or bars they are buying. (In the case of large-size bargold, unless buying from the manufacturer or a reputable bank, the serial numbers need to be verified, so that one does not buy a Chinese bar with a lead or mercury core)

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