NEWS
Chinese counterfeit coins spread
Hong Kong circulation coin counterfeiting
A coin dealer's bizarre plea bargain sees him "banished" from three Florida counties.
Busy news period for UK one-pound counterfeiting
COUNTERFEITING SNIPPETS FROM AROUND THE WORLD
ON-LINE RESOURCES
Keeping up to date with the literature of counterfeit coins
IN PRINT
"A Recent Forgery of a Palaeologan Anonymous Billion Tornese"
Coin Forgeries and Replicas 2007
Welcome
This edition of the newsletter sees the introduction of "MY COIN DIARY". This is an attempt to introduce a more informal and personal section that allows brief items to be mentioned that are more coin than counterfeit coin related. It is hoped it will gradually take on the tone of some of the better blogs. As usual comments and feedback are welcome, but please if you expect a reply identify yourself. Pseudonynyms may be customary on the web in blogs etc. but they are, to say the least, rude in person to person correspondence.
Dr. Prokopov in the introduction to his latest publication [see the review at In Print] states, "There are two clearly distinguished flows of fakes. The first are almost impossible to detect and they easily infiltrate into the market." Unfortunately this type of counterfeit will rarely feature in this newsletter. Occasionally an expert such as S. Bendall [again see review at In Print] will publish some excellent forensic work. However, usually such counterfeits are either not detected, or if a serious doubt is raised when they are in the possession of one of the big dealers, they quietly disappear with the minimum of fuss.
How large is this problem? It is impossible to know. There is a climate where dealers claim, "all's right with the world" and worry about, "not frightening the horses". Some collectors do not even know there may be a problem while the rampant paranoia of others sees every other coin as counterfeit. It is only by coin dealers and auctioneers being open and welcoming discussion and publicity for such issues that the scope of the problem will be known. It is a situation crying out for some leadership from those prominent in the world's numismatic community be they, dealers, societies or scholars. Unfortunately, with one or two distinguished exceptions, they are failing at the moment.
Be clear this newsletter is not saying there is a large unknown counterfeit coin problem in the high quality end of numismatics at present. Just that we do not know. So let us all in a visible way work to find out whether there is a problem.
A photograph of a Chinese press making "copies" of Morgan dollars. Reproduced with permission from Susan Headley's blog at About.com. The original photograph reproduced courtesy of Jinghua Shei.
Chinese counterfeit coins spread
During the last six-months there have been a number of news items showing how Chinese coin counterfeiting is growing in size and spreading into more and more collector coin areas.
1.0 In March PCGS confirmed that they had identified a number of counterfeit PCGS slabs containing counterfeit coins and being sold on eBay from China. This follows a recent similar announcement by NGC [see Counterfeit Coin Newsletter 9]. The blog-sphere has been full of opinions that other authentication service slabs have been counterfeited but no other company has confirmed this.
PGCS have appealed to collectors to boycott online auctions from China. However they have not given a detailed note on the differences between the authentic and counterfeit slabs similar to NGC. Possibly they have concluded this will only assist the counterfeiters in improving their copies. The counterfeit coins contained in the slabs identified by PCGS include counterfeit Chinese silver and gold dollars, USA silver dollars and Mexican 8-reales.
2.0 In April Susan Headley posted a series of photographs showing a relatively large Chinese minting operation producing copies of coins from numerous countries. This is a perfectly legal operation provided the coins are sold as copies or replicas. Certainly the apparent source of these photographs, Jinghua Shei, appears to have an eBay shop, jinghuashei, selling a large number [550 items on 8th July 2008] of replicas correctly stamped for the USA market. However it is obvious from the photographs that the replica stamp is added after the main coining operation. This means these copies could be sold unstamped and subsequently sold-on as genuine. The release of the photographs appears to be part of a marketing ploy to show off the minting operation and the various products available. However their release does allow people such as Susan Headley to use them to show the scale of the problem numismatics faces from such operations in China.
3.0 An arrest in Winnipeg, Canada in June pointed out the dangers of the operation described in 2.0. A fifty-two year old man was arrested for allegedly selling four counterfeit Canadian coins to a collector's shop. The shop owner originally thought the coins were genuine and paid $1,000 for them but later realised they were fake. The accused was arrested when he later returned attempting to sell more counterfeits. Forty-eight more counterfeit coins were found in the home of the accused.
The counterfeit coins were copies of coins from 1870 to 1929. The police said that genuine coins of this type had nominal values of between $300 to $9,000 dollars. The accused was alleged to have bought them, via the internet, as unstamped replicas from a dealer in Hong Kong. The police estimated that the accused could have made up to $50,000 by selling all the counterfeits as genuine. A CTV report carries a short video news report and some coin photographs.
[Sources: PCGS, About.com, eBay shop jinghuashei, Winnipeg Sun, CTV Winnipeg, Winnipeg Free Press, cnews]
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Photograph of a genuine 1993 Hong Kong ten dollar coin, reproduced from http://www.info.gov.hk. The outer ring is made from a cupro-nickel alloy and the inner portion a nickel brass alloy. The reverse features the raised image of a bauhinia flower.
Hong Kong circulation coin counterfeiting
Professor K.C.Chan, Hong Kong's Secretary for Financial Services and the Treasury, announced on 7th May that the HK Monetary authority, "has no plan to stop issuing $10 coins." This announcement was in response to a Legislative Council member's question that stated, "Hong Kong people travelling on the Mainland or in Macao often encounter shops, food premises and transport operators refusing to accept Hong Kong $10 coins." The figures of counterfeit $10 coin withdrawals between 2005 and 2007 announced at the same time showed a gradual reduction in the number of counterfeits found. This statement and the figures appear to be an attempt to downplay the seemingly successful reduction of a serious counterfeit coin crisis that hit Hong Kong in the early part of the twenty-first century. The reduction is confirmed by the Government Laboratory reports of 2004, "There was a sharp decline in cases over the past three years as a result of the decrease in counterfeit coin cases" and 2005, "..further decreases in the submission of counterfeit HK$10 coins."
Three scientists from the Hong Kong Government Laboratory told the American Academy of Forensic Science in 2005 that the $10 was being counterfeited within six months of its introduction in 1994. They said that, ""The quality of the counterfeit ten-dollar coins which were first found was crude....However, as time progressed, forgery techniques appeared to have improved to such an extent that counterfeit HK$10 coins were almost indistinguishable to the untrained eye from corresponding control coins."
The annual withdrawals of counterfeit HK $10 coins between 1997 and 2007 [sources: HK government answers to LCQs (Legislative Council questions) 5, 24th April 2002 & 16, 7th May 2008, Fight Crime Committee Report No. 25, 2005. It has not been possible to obtain the figures for 2002 and 2003]. Left click on this image, to see a larger image.
For most of the twentieth century Hong Kong had a significant circulation counterfeit
coin problem. This can be glimpsed by reading the
1936 Report
of the Government Analyst. The introduction of the relatively high value $10 coin towards
the end of the century made this
problem worse. Every effort was made to incorporate all the most modern anti-counterfeiting
features into the coin. This included using a bimetal coin and an interrupted fine milled
edge. As the problem worsened the material of the coin
was changed but this did not appear to stem the problem. By
2001
the numbers of counterfeit
$10 coins withdrawn had quadrupled and the first quarter figures for
2002 [160,000]
showed a threefold increase over that previous year. So despite what appeared to be
vigorous efforts by the many authorities involved, including the police in Hong Kong
and the mainland, the situation appeared to be getting out of hand. At this
time Hong Kong issued significant numbers of an updated version
of the existing moribund $10 banknote. Nowhere
can the editor find any acknowledgement that this was a response to the coin
counterfeiting. However from this time, that is 2002/2003, the main currency used
for the $10 value became
the note rather than the coin. The downgrading of the importance of the $10 coin was
assisted by the growth of the Octopus electronic payment card. Originally introduced
in September 1997 for public transport payments, by 2002 9 million cards had been issued.
This reduction in the importance and use of the $10 coin appears to have affected
its counterfeiting.
Even with these changes in emphasis the number of $10 coins issued up to and including
2007 was slightly over 108 million. Large numbers of the counterfeit $10 coins originated outside Hong Kong in the adjacent
Chinese Mainland provinces. In May 2002 an answer to a Legislative Council
question it was stated that,
"In recent years, the Guangdong Public Security
Bureau detected two workshops which manufactured counterfeit Hong Kong $10 coins.
The Hong Kong Police also noticed that some Hong Kong residents smuggled
counterfeit coins from the Mainland to Hong Kong." Again in March 2007 Legislative
Council minutes stated,
"A local syndicate which manufactured counterfeit $10 coins
had also been combated with the cooperation from the Shenzhen authorities in 2006."
However, home grown counterfeit coin manufacture was also present. The 2003 Hong Kong Police
Review stated, "In December 2003,
a counterfeit $10 coin manufacturing and distribution syndicate was shut down.
This was the largest counterfeit coin production centre in the history
of Hong Kong." The Standard reporting on this case in December 2003 said
thirteen people were arrested including the
"technician" who ran the
counterfeit factory and the
"mastermind" behind the syndicate. These counterfeits
appeared to have been struck. According to Hong Kong's local newspaper, "The Standard", it
cost about one dollar to make these counterfeit coins
and they were sold by the syndicate for between four to five dollars. [Sources: numerous documents from
http://www.gov.hk/en/ ,
AAFS Conference Abstracts 2005
pages 53-54, Hong Kong: Annual Report of the Government Analyst for 1936, Wikipedia,
The Standard 5th December 2003 ] Return to Contents.
Photographs of a genuine 1935-P Buffalo Nickel from the collection of Robert Hairgrove, © 2008 Robert Hairgrove
A coin dealer's bizarre plea bargain sees him "banished" from three Florida counties.
In April 2008, John H. Green, owner of AAA Coin and Jewellery, Mulberry, Polk County, Florida was arrested and charged with selling counterfeit coins. According to "baynews9", "Detectives said they were tipped off by a customer who said he bought coins from Green for more than $1,000, but when he had them appraised by two experts he found out they were counterfeit." Undercover officers from the sheriff's office then bought three coins from Green and these were found to be counterfeit. The allegations involved counterfeit buffalo nickels and "collector" pennies. Green's shop was then raided and thousands of coins and a 900 pound hydraulic press and die stamps seized. One of the undercover officers from the sheriff's office was quoted by "baynews92 as saying, "Some of those impressions on some of the die stamps would lead us to believe that he was making some U.S. currency, collectible coins".
In a plea bargain at a trial in July, Green agreed not to carry out any business in the three Florida counties of Polk, Hardee or Highlands while he was serving an eight-years probation. "The Ledger" reported that Green's lawyer, "emphasised that his client pleaded no contest to the criminal charges". The "baynews9" report alleged that, "Green was convicted in 2000 and served a one-year federal sentence for selling counterfeit coins through the mail". It has not been possible to confirm this allegation.
Comment
To an observer living in a system that does not allow plea bargaining this appears a very bizarre outcome. If Mr. Green was guilty of selling counterfeit coins then it would appear likely that it was to a much larger customer base than the three counties he has been "banished" from. The local legal authorities appear to have been more concerned about removing a nuisance from their jurisdiction that protecting the coin buying public.
[Sources: Fox35, baynews9, Orlando Sentinel, TBO.com, The Ledger]
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PC Alan Bolye and Sergeant Ron Neil with the counterfeit one-pounds found in Hounslow, London. Photograph reproduced with permission of the Metropolitan Police.
Busy news period for UK one-pound counterfeiting
The completion of the trial of Marcus Glindon [see report in CCN9] did not lead to a quiet period in the news of the counterfeiting of one-pound coins. Firstly in January two London police officers searched a suspicious van and found a large quantity of counterfeit one-pound coins hidden in metal barrels. The Metropolitan Police claimed, "It is thought to be one of the largest seizures of its kind in the UK. It is estimated that the barrels contained in excess of 100,000 coins." The van driver and a passenger have been charged with possession of counterfeit coins and Class A drugs.
In February, Marcus Glindon was back in court for a confiscation hearing. The materials and machinery used in his counterfeiting were ordered to be forfeited. He was also ordered to remain in gaol for a further six-months unless he paid back the £320,000 the police calculated he made from this scheme.
April saw the conviction of gambler Patrick Campbell and his wife Susan for various counterfeiting and money laundring offences. A July 2006 raid on the couples six-bed roomed Skegness house uncovered a "coin-making workshop" with 11,000 counterfeit coins, a hydraulic coin press, sheets of brass, coin counters and equipment to bag and seal the counterfeit coins. Receipts were found for the purchase of brass sheets indicating the operation had been running for at least eighteen months. The couple were also found guilty of transferring the proceeds of criminal activity.
According to "this is lincolnshire", "Campbell confessed he had run up large gambling debts and had begun working for the people he had owe money to. He told police he was only a minor player in the operation, putting edging on the finished coins. He refused to name other gang members, saying he feared for his safety."
Campbell was sentenced to seven years in prison and his wife to two years. Police are hoping to confiscate the couples' assets under the Proceeds of Crime Act.
In May, a seventy-year old pensioner was arrested by Essex police in Basildon. He was alleged to be trying to buy goods at a car boot sale with counterfeit one-pound and two-pound coins. When police searched his home in Islington, north London they found a furnace, a mould and scrap metal.
Finally, in June the "Bucks Free Press" printed a police appeal for help in tracing a man. This man had attempted to exchange for notes, a £500 bag of counterfeit one-pound coins at a local branch of the National Westminster Bank. When the cashier identified the coins as counterfeit he hurriedly left with the bag of coins.
Comment
The arrest of the Islington pensioner appears to be a case of him supplementing his income by making some cast, counterfeit coins. This type of case could be found in the UK at any time in the last two-hundred years. The other cases seem to point to the deep involvement of organised crime gangs in producing struck, counterfeit, one-pound coins.
[Sources: Metropolitan Police News item, Enfield Independent 29th February 2008, Skegness Standard, this is lincolnshire.co.uk, Echo, Bucks Free Press]
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COUNTERFEITING SNIPPETS FROM AROUND THE WORLD
