Availability of Fake Bullion Widespread | COINage Magazine

Availability of Fake Bullion Widespread | COINage Magazine

Fake 1 oz gold bullion bar. Photos courtesy Jerry Jordan

By Michael Fuljenz

My associate, Jerry Jordan, ordered numerous rare coins and bullion bars for educational purposes from the Wish platform over the past two years. Thankfully, these coins and bars were very cheap, but they were all obvious fakes from Chinese vendors, and all were delivered by the U.S. Postal Service.

Jerry and I have sent the items received from previous orders to the National Anti-Counterfeiting Task Force and its leader, Doug Davis, in order to further educate law enforcement. I taught counterfeit detection courses for the American Numismatic Association and served on the National Anti-Counterfeiting Task Force.

There was a “Credit Suisse 1-ounce Gold Bar” costing $2, plus $3 shipping. It would have been worth $1,500 when he ordered it and nearly $1,900 today, but it’s essentially worthless because it was fake. He also ordered an 1899 “Queen Morgan Silver Dolar” (sic)—that would have graded XF (Extra Fine) and been worth $140—for just $3.89 shipping. The counterfeit coin was listed at no charge. Then he ordered a gold coin that would be worth $10 million or more if it were genuine: a 1933 Saint-Gaudens Double Eagle—but it sold for $1.83, plus $2 shipping. So you can’t fault them for greed.

They chose some extremely valuable coins and sold the knockoffs for a ridiculously low price. But none of these fake coins had the word “COPY” stamped on them, as is required by the updated 2014 U.S. Hobby Protection Law for counterfeits.

Despite assurances that it would crack down on counterfeit goods and intellectual property flowing from its country, the Chinese communist regime continues to reap billions from the sale of fake merchandise, and it’s now affecting an area of the U.S. economy that many wouldn’t suspect.

Multiple studies have shown that little appears to significantly stem the tidal wave of bogus goods leaving on cargo ships each and every day from any number of Chinese ports of call or by mail. While most of the public focus has been on tennis shoes, luxury watches, handbags, clothes, cosmetics, cell phones, and computer software, there has also been what some consider a direct attack on the financial markets through the numismatic industry.

In the past few years, I’ve reviewed several customers’ coin collections and, sadly, detected one or more counterfeit coins. In one instance, the majority of one person’s collection consisted of counterfeit proof Buffalo one-ounce gold coins, with all coins appearing in what looked like genuine NGC holders. The holders themselves were fraudulent.

In April 2021, U.S. Customs and Border Protection (CBP) officials seized $685,000 counterfeit U.S. notes that all originated from China. The fake U.S. currency included $5, $10, $20, $50, $100 bills that were all turned over to the U.S. Department of Homeland Security and the U.S. Secret Service. Included in the overall total number of bills were 976 $100 bills head to New York, according to the CBP.

“Today, criminals have relatively easy access to the technology, equipment and know-how required for counterfeiting. It is a lucrative business which is often used to finance illegal activities such as trafficking in human beings and drugs, and even terrorism.” said Shane Campbell, Area Port Director-Chicago. “Criminal groups continuously target our citizens, businesses and the security of the United States financial structure hoping to make a quick buck and damage our economic system. Our officers are there to stop that threat to our nation.”

Even more egregious, during the first three months of 2021, officials seized over 100 shipments of counterfeit bills totaling $1.64 million from a single international mail sorting facility in Chicago. There are nine such sorting facilities across the United States.

“From Jan 1 to March 31, officers seized 80 shipments of counterfeit currency, 24 shipments containing fake silver dollars and five shipments containing counterfeit foreign currency,” states a press release from the CBP. “CBP officers seized 24 shipments containing fake silver dollars… Additionally, during these three months CBP seized over $95,000 Euros, equal to over $112,000. Except for a few of the shipments, all these items were arriving from China destined for places all over the U.S.”

The addition of collectible coins and silver dollars is not new, as our own investigations have revealed similar results.

Millions of normal circulating U.S. coins, such as quarters and half dollars, as well as bullion and rare collectible coins, have now been counterfeited by Chinese interests. More recently, U.S. law enforcement seized over a million dollars’ worth of counterfeit circulated George Washington quarters believed to have been made in China.

These Chinese counterfeit problems have been sporadically covered in the national press. Three examples:
• According to Forbes in 2018, counterfeiting is the largest criminal enterprise in the world, greater than illicit drugs or human trafficking. It’s expected to grow to $2.8 trillion by 2022, costing 5.4 million American jobs.
• In a 2016 interview for CBS Money Watch, titled “China’s Largest Export Boom: Fake Gold Coins,” Kathy Kristof interviewed experts, including me, on the proliferation of Chinese-made counterfeit coins being sold on the internet.
• Craig Crosby, founder of The Counterfeit Report, has detected millions of knockoffs sold online on eBay, Alibaba, Amazon, and Walmart. He notes that over 80 percent of all counterfeits are made in China.

Earlier this month, Major League Baseball (MLB) expanded its deal with Tencent, one of communist China’s largest tech companies, to livestream MLB games in China. This is the same company that helps to limit free speech of the Chinese people and, in a show of support for dictator Xi Jinping, created a mobile game—Clap for Xi Jinping: An Awesome Speech.

In highlighting MLB’s hypocrisy on human rights, the move came at the same time it pulled the All-Star Game from Atlanta and unbelievably moved it to more voting-restrictive and less-diverse Denver, because of a recent change in Georgia’s voting requirements that seems to help ensure more fair and secure elections.

Sen. Marco Rubio (R-Fla.) on April 2 stated in a tweet, “Dear GOP: @MLB caves to pressure and moves draft & #AllStarGame out of Georgia on the same week they announce a deal with a company backed by the genocidal Communist Party of #China.”

It’s well known that the online sales platform “Wish,” which sources most products from China, was rife with counterfeits, yet the NBA’s Los Angeles Lakers accepted $36 million, less than LeBron James’s annual salary, to adorn the Lakers uniform with a large “Wish” logo for a three-year period. This comes from a league that seemingly discourages players or executives from criticizing Chinese humanitarian and labor practices or taking a stand against China’s authoritarian acts to usurp a democratic Hong Kong. Then there’s China’s alleged mistreatment of the Uyghur community.

Of course, the actions of the communist Chinese regime don’t reflect on the many fine Chinese Americans and their families, some of whom are my friends.

On March 2, 2020, H.R.6058 (dubbed the “Shop Safe Act of 2020”) was introduced in the House of Representatives. It would amend the “Trademark Act of 1946” to give certain e-commerce platforms contributory liability when counterfeits are sold that pose a health risk to consumers. The key phrase is “health risk,” which seems to shut coins and some other important products out of the equation, even though some fake coins and precious metals coming from China contain traces of cyanide, which could pose a significant health risk.

For our purposes, leaders in the numismatic community will work hard to see that this bill is modified and reintroduced in 2021 so that it would cover counterfeit coins, most of which are made and delivered from China. Specifically, we would like to see it contain a reference to the Hobby Protection Act, as amended in 2014, to cover counterfeit coins.

This content was originally published here.

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