Chinese counterfeiters target silver bullion products
- Published: Feb 29, 2016, 7 AM
Manufacturers in China continue counterfeiting genuine bullion products, primarily of U.S. companies, causing financial headaches both for the makers of the genuine pieces and for the fakes’ secondary market buyers who are unaware of the bogus pieces.
More than a half dozen U.S. makers of 1-ounce silver bars and rounds have been targeted repeatedly by counterfeiters, with the knock-offs offered for sale on the individual websites of the Chinese distributors and manufacturers, as well as Alibaba.com, an international trade site headquartered in China.
Moreover, a Staten Island, N.Y., coin dealer reports he was recently duped into buying 225 counterfeit pieces, bars and rounds that are composed of silver plate over brass or a zinc alloy. The alleged seller is identified as being sought by authorities in Gloucester County, N.J., for bilking two New Jersey dealers with similar counterfeit bullion products.
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The counterfeit silver bars and rounds are identical in appearance to the genuine bullion products they replicate, including stating the fineness of silver as .999 and weight as 1 troy ounce. The fake bars and ingots are offered online with the description of the composition accurately described as being base metal plated over with silver.
Examples can be purchased online well under $1 each, in quantity.
The fake 1-ounce bars purchased in January by Dan Davis with Staten Island Coin Investors for $3,000 duplicate designs of genuine silver bars issued by Northwest Territorial Mint, Pan American Silver Corp. (produced for the past 10 years until December 2015 by Northwest Territorial Mint), Scottsdale Silver, SilverTowne, Engelhard, APMEX, and the Highland Mint’s American Buffalo 1-ounce rounds.
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Sunshine Minting is also reported to be a target of the counterfeits, although the examples Davis purchased did not include any Sunshine Minting pieces.
Ross Hansen, owner of Northwest Territorial Mint, said the Chinese counterfeits have posed a financial strain on his business. He said he has pursued civil remedies without success and even has sent representatives to China to meet with government officials and the firms responsible for making the knockoffs. He has also contacted secondary market sites that offer the pieces in an attempt to get them removed from sale.
Hansen said the counterfeits are of extremely high quality. The primary method to detect the counterfeit from the genuine piece without conducting metallurgical analysis or destructive testing is measuring the thickness.
In the case of the Northwest Territorial Mint 1-ounce silver bars, the counterfeits are 50 percent thicker, at 0.126 inch, versus 0.083 inch for the genuine bars. Hansen said pieces are thicker to bring the total weight to the standard they would be if genuinely made from pure silver.
Hansen said sites offering the counterfeits are surfacing faster than efforts can be made to have them taken down. Hansen said his company makes more than 18,000 products, with nonbullion products also being counterfeited.
Hansen said he’s also encountered counterfeit coins and bullion products encapsulated in counterfeit holders with counterfeit Professional Coin Grading Service and Numismatic Guaranty Corp. grading labels.
Andrew Martineau, vice president of merchandising at APMEX, says any bullion products the firm purchases from secondary market sellers are metallurgically tested individually to confirm their authenticity. Martineau said APMEX conducts the extensive testing to ensure that the bullion products they sell are all genuine. The firm even tests pieces bearing its own hallmark that are purchased back from customers, he said.
While the testing protects APMEX from buying fakes and reselling them, consumers who unknowingly purchase the knockoffs will eventually be exposed to a valuable lesson at a later date, Martineau said.
The metallurgical testing is not routinely conducted on bullion products received sealed from the world mint of manufacture, but is done on nongovernment sealed bullion products APMEX buys from customers.
Martineau said APMEX has an extensive library of fake bullion products it has received that the firm uses to educate its staff on what to look for. These counterfeits include American Eagle and Canadian Maple Leaf coins, he said.
APMEX has partnered with eBay to remove similar counterfeit items from the eBay website and to police any offerings that should be removed, Martineau said.
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