Among many great discoveries that can be attributed to the Chinese is that Western consumers will buy shit if it”™s chocolate covered and packaged as an upscale brand. Our longtime fakes and frauds columnist W.J. Elvin takes a look at one little slice of the Chinese counterfeit market, collectible and rare coins, an area in which he dabbles with commercial and journalistic interest.
China: The Alice”™s Restaurant of Fake Collectible Coins
by W.J. Elvin III
July 28, 2011
I”™m talking about fake Apple stores in China, a scam so marvelously done that even some of the employees believed they were working for Apple.
Latest reports indicate those shops have been shut down. But, to give China its due, that story was just one little blip on the fake-o-rama radar.
Most fake stuff coming into the U.S. originates in China where, so we hear, not only factories — entire towns are devoted to producing counterfeit popular merchandise.
Those folks get down to it, even making money by making money.
How do you do that?
Just get some tools and dies and a method for casting or stamping out the product. Bingo, you”™re set to make counterfeit coins.
And since we”™re talking China, this isn”™t some basement or garage hammer-and-tong operation. They do it industrial style using powerful presses, as this great series of photos of a Chinese fake factory illustrates.
Big Money in Fake Money
Chinese copies and fakes of coins that might sell, if legitimate, for thousands of dollars, can fool anyone who isn”™t expert “¦ and, now and then, they fool the experts.
The problem is such that a consortium of rare coin organizations and businesses got its dander up about how “the public is spending millions of dollars on fake U.S. coins offered in online auctions and elsewhere, such as flea markets and swap meets.”
That was a couple of years ago. Today, the counterfeiters have expanded beyond rarities, into less valuable and therefore more saleable common variety collectible coins. The advantage there being that no one is going to pay an expert”™s fee to authenticate a coin bought for $25 or $50, so they can flood the market without fear of fuss.
What About U.S. Laws?
Some Chinese mints are likely clandestine though many operate quite openly as producers of reproduction or replica coins. But even these “legitimate” coin reproduction firms have been known, on request, to neglect the inconvenient markings required by U.S. law. (There is no Chinese law requiring such markings).
The U.S. Hobby Protection Act requires manufacturers and importers of imitation numismatic items to mark replicas plainly and permanently with the word, “COPY.”
Authorities sometimes make a headline-generating grandstand seizure but it”™s rare. It”™s fairly common knowledge that counterfeits have gotten past Customs with the word “COPY” stamped on, easily removed with solvent.
With law enforcement generally less than enthusiastic about involvement, collectors are left to turn to organizations in the field, vigilante groups, or their own devices.
Authentication? Fake It
Until recently there was some assurance that a coin is authentic if it were housed in a special case provided by a professional coin grading company. The sealed case meant the coin had gone through an expensive analysis by experts.
But lately the Chinese have been producing the cases to go with the coins, so the grading company “sleeve,” as it is called, is no longer a trustworthy indicator of authenticity.
The old stand-bys for detection used to be weight and metal content but, if there is profit in it, fakers today will match the weight correctly and even use the proper metals, though not of the quality found in the genuine coin.
One excellent site for learning more about detection processes and other aspects of counterfeits and fakes is Reid Goldsboro”™s. (Goldsboro, by the way, comes down hard on the Coin Forgery Discussion List on Yahoo. I have personally learned a great deal from participants and have seen the good results of their investigations, so on that point I beg to differ).
In my own collecting I”™ve acquired more than half a dozen modern Chinese coins, big heavy silvery beauties that came my way in bulk on-line purchases.
They”™re not really counterfeit, I suppose, because when you research the things, some aspect — denomination or the province named — doesn”™t even exist. So they”™re just fakes.
Here”™s a great collection of photos of Chinese fakes: http://china-mint.info/fake-coin-images.html.
A visit to eBay can provide a quick education. In the replicas section of the coin sales area you will find copies of most anything you might want, from common old nickels and dimes to rarities that, if genuine, would sell for thousands of dollars.
Many come directly from China, some are from re-sellers.
The concern, of course, is not for those sold as replicas or reproductions, but in regard to what becomes of them next, when they appear at the flea market or auction with no indication of provenance.
What”™s to be Done?
According to a report in Numismatic News, the House Financial Services Committee will review “efforts to detect and combat the counterfeiting of U.S. coins and currency in the United States and abroad,” and in a first, they stated that they “will examine the counterfeiting of rare or investment-grade coins, U.S.-made and otherwise.”
Unfortunately, the review is part of a much broader committee agenda involving a general review of procedures and policies related to U.S. coin, currency and government-issue collectible coins.
Meaning, after the next session of Congress there”™ll be some big fat report sitting around gathering mold and dust with a hundred thousand other big fat reports.
It”™s not that there”™s no solution at hand, just that our politicos don”™t see the glory in crusading against Chinese counterfeiters.
The battle can be won.
The Financial Post reports that Canada has fairly much solved the counterfeiting of collectible coins by banning replicas, regardless of whether they are stamped.
The Canadian response is largely the result of efforts by collector Mike Marshall who documented and publicized the problem for years before seeing official action.
Some credit should also go to the national police in Canada who took an interest and helped propel the issue on to the legislative table.
Marshall”™s work is chronicled in news articles that turn up when his name is entered on a web search engine, and a good example of his efforts can be viewed at http://canadiancounterfeits.numissociety.com/.
But the real solution lies with China.
As long as Chinese authorities don”™t see any problem with the manufacture of fake collectible coins to sell to Western hustlers and suckers, there seems little likelihood the situation will change dramatically.
Who knows, maybe the fakers get medals for contributing to the decline and fall.
They”™d better hope Chinese law is never extended to cover their products, since the penalty for counterfeiting money in China is death.
On the chopping block.