With silver at near record highs and gold soaring into the stratosphere, many people who are not in the mainstream of coin collecting are cashing in (selling for melt value) anything silver and gold — including silver dollars they received as youngsters as birthday gifts from grandparents and other family members.
Not surprisingly, businesses such as jewelry stores and pawn shops in small towns, and entrepreneurs in local flea markets, want in on the action and now include coins among the items they buy. They no doubt have purchased a good number of coins from local folk during the last two to three years. Often these merchants have a superficial knowledge of coins. They may or may not have a price guide book on the shelf. But who needs a reference book when paying melt?
Lack of knowledge and a tinge of greed is all savvy sellers of counterfeit coins need to be successful to dupe merchants in small towns. Two men operating on the East Coast and the Midwest in recent weeks proved the point.
Local merchants, anxious to turn a profit on what they perceived to be “better-date” classic coins were all too willing to pay melt. But, of course, they were left holding the proverbial bag because the seller’s coins were counterfeit — Chinese specials, made of base metals and plated with silver.
The images and descriptions provided by investigating authorities suggest the counterfeits to be D-1 and D-2 as classified by Chinese counterfeit researcher Dr. Gregory V. Dubay. D-1 counterfeits are close in basic design but do not meet standard specifications such as weight and metal composition. Although struck by dies, often the strike is of poor quality. D-2 level counterfeits exhibit the same substandard specifications in weight and metal composition, but show higher strike quality.
As typical of the D-1 and D-2 coins, Chinese counterfeiters often incorrectly pair obverses and reverses in a given series. Or, simply create coins that never were, such as a Morgan dollar with a date of 1903 and a Carson City Mint mark. (The Carson City Mint ceased production of Morgan dollars in 1893.)
Even without weighing the coin, most collectors and knowledgeable dealers would have spotted the 1903-CC Morgan dollars as fake. Or, they would have questioned Draped Bust dollars bearing an 1804 date since a genuine 1804 dollar is very rare. But the duped local merchants did not. They possessed just enough knowledge to make themselves vulnerable to enterprising sellers of counterfeits, who walked in with a hard-luck story and a believable stash of half-filled albums and coins in cardboard holders with prices written on them, such as a legitimate collector may have in his collection.
Unfortunately, many who are not actively involved in the coin market and hobby are like these local merchants. They are not aware that the United States is awash in counterfeit classic U.S. coins made in China, which have been pouring into the United States via online auction sites and Chinese sellers using the Internet. Although the numismatic community has been sounding the alarm and educating fellow collectors, there’s much that needs to be done to inform the public at large. ■