China's counterfeiting of U.S. coins accelerates
Two U.S. Congressmen are pressing the U.S. Mint and Secret Service to curb the tide of counterfeit precious metals coins from China into America. In a letter to those two government agencies, Reps. Alexander X. Mooney, R-W.Va., and Frank D. Lucas, R-Okla., members of the House Committee on Financial Services, wrote: “Given reports of the growing problem of high-quality counterfeits of U.S. precious metals coins entering the country from China and elsewhere, we wish to learn more about the U.S. Mint’s actions with respect to counterfeits of its current-issue U.S. gold and silver coins.”
David J. Ryder, who formerly headed the U.S. Mint and is being considered to serve as its 39th director, said during his recent nomination hearing before the Senate that he would prioritize anti-counterfeiting measures in the role.
The Secret Service is tasked with investigating any counterfeiting of United States coins and securities, as well as fraud involving other types of currency, including digital currency. The Department of Justice handles prosecutions.
Over the past decade, counterfeit numismatic coins from China have infiltrated the U.S. market. There are a number of websites selling sophisticated counterfeits "whose sole purpose on the secondary market is to defraud buyers," according to Coin World. It's a good business for counterfeiters as margins are high. Coin dies can strike thousands of fakes, each of which can be sold for hundreds or even thousands of dollars to unsuspecting buyers.
Initially, Chinese counterfeiters focused on 18th and 19th-century coins. More recently, they have moved into circulating bullion coins, such as the American Eagle gold $50, the gold American Buffalo $50 and silver $1 bullion coins.
Nearly a decade ago, Coin World published a series of articles explaining the prolificity of Chinese coin counterfeiters, but many collectors were dismissive. “They did not believe the Chinese capable of producing counterfeits deceptive enough to fool the experts,” Beth Deisher, director of the Industry Council for Tangible Assets Anti-Counterfeiting Task Force, told Coin World. “We predicted it would be only a matter of time."
According to Coin World, Secret Service officials typically open an investigation when the face value of the counterfeiting is at least $100,000. It is likely that they previously were unaware of the true value of bullion coins, Coin World says. For instance, a 2017 American Eagle 1-ounce gold bullion coin has a legal tender face value of $US50 - but is worth US$1356, according to the Precious Metals website.
The mints of other nations are far ahead of the United States in counterfeit protection. In 2012, Malaysia released coins with distinct colors along the edges, indentations, and latent images to deter counterfeiters. Last year, the Royal Canadian Mint issued gold and silver coins with embedded anti-counterfeiting technology.
Observers say that harsher penalties for possession and sale of fake coins would also help to alleviate the problem in the United States.