Mint officials plan no audit in ATB bullion sales
- Published: Jun 1, 2011, 8 PM
United States Mint officials say there is no evidence to warrant audits to investigate allegations that two of the Mint’s authorized purchasers violated the terms of selling their allocations of 2010 America the Beautiful 5-ounce silver bullion quarter dollars.
“We are aware that some collectors have alleged that a number of the United States Mint’s authorized purchasers have attempted to ‘cherry pick’ their purchases of coins in the 2010 America the Beautiful Silver Bullion Coin Program,” according to a statement provided May 18 to Coin World by U.S. Mint spokesman Michael White. “Specifically, some authorized purchasers allegedly had their coins graded and then held back the higher-graded coins for sale at a later date and with a higher premium. The United States Mint’s terms and conditions governing the sale of coins in the 2010 America the Beautiful Silver Bullion Coin Program do not address the grading of these coins.
“In particular, the terms and conditions do not prohibit or restrict the authorized purchasers from grading these coins in the manner alleged.
“Accordingly, the alleged practice [of having the coins graded before selling], if true, does not violate the United States Mint’s terms and conditions.
“Consequently, there currently are no Authorized Purchaser audits planned to look into these allegations.”
Some of the authorized purchasers submitted part or all of their allocation of up to 3,700 of each of the five 2010 America the Beautiful bullion coins to either Professional Coin Grading Service, Numismatic Guaranty Corp. or ANACS for encapsulation after numerical or superlative grading.
The Mint offered 33,000 coins for each of the five 2010 America the Beautiful 5-ounce silver bullion coins, which were sold to the nine authorized purchasers that participated from among 12 eligible firms from the Mint’s network of sellers.
An unknown number of the 2010 coins that were sold under the Mint’s guidelines by authorized purchasers without having been initially graded and encapsulated, have since been certified by one or more of the grading services.
In May, some collectors participating in the online U.S. Coin Forum operated by Collectors Universe, the parent company to PCGS, alleged two authorized purchasers — American Precious Metals Exchange, an Internet bullion firm in Oklahoma City, Okla., and Jack Hunt Coin Broker Inc., in Kenmore, N.Y. — had violated the Mint’s conditions for selling the coins. The primary complaints are that the firms submitted coins for grading, but withheld the top graded pieces for sale at premiums to select customers.
The chief executives of both firms deny any and all of the posted allegations.
Michael Haynes, chief executive officer at APMEX, said the company sent an undisclosed number of coins, but not all, of its allocation, to PCGS for grading and encapsulation. He said a number of the coins came back graded Mint State 68 or MS-69, both with and without designation as “prooflike” or “deep-mirror prooflike.”
Prooflike and deep-mirror prooflike refer to a coin’s level of reflectivity, with deep-mirror prooflike being the most desirable and generating a higher value on the secondary market.
Some collectors said they believed APMEX was shipping 2010 coins to customers in boxes bearing single letters that could designate what was contained inside and be directed to specific clients.
Haynes said May 17 that there was no correlation between a box being marked A, B, C or any other letter, and its contents. Haynes said the lettering system was used so the company could keep track of the date when shipments were sent.
APMEX did not charge more for a single set of five coins to a customer from its original allocation that had been certified as MS-69 deep-mirror prooflike than if the coins in the set had not been certified at all, Haynes said. He pointed to the Mint’s restriction that the coins could not be sold for more than 10 percent above the price the authorized purchaser paid for each coin.
Collectors who received deep-mirror prooflike-certified coins actually got a bonus at the expense borne by APMEX, Haynes said.
Since the initial sales, Haynes said APMEX has been buying and reselling 2010 America the Beautiful coins both certified and raw as singles and sets, without any sales restrictions by the Mint.
Complaints similar to those addressed against APMEX were also directed at Jack Hunt, including the latter firm’s secondary market eBay sales.
Scott Hunt, president of Jack Hunt Coin Broker Inc., said: “Every set Jack Hunt Coin Broker Inc. was allocated, 3,700 total, were sold as bullion as was precisely dictated by the U.S. Mint. In addition, every set was sold at a set price, again as dictated by the U.S. Mint. Every customer received what they ordered — five U.S. Minted 5 oz .999 Fine Silver America the Beautiful bullion coins.”
Scott Hunt said sets were sold both nationally and locally, and every sale can be verified. The firm offered $1,000 to buy back any set if a customer expressed dissatisfaction with the order, he said.
Hunt said the only markings placed on the boxes in which the coins were shipped to customers were the initials, for accountability, of who packed the contents.
“Yes, we are selling 2010 ATB DPMLs on eBay just as are other dealers and private individuals from across the United States,” Scott Hunt said. “After all, the ATB sets that were originally allocated were sold by the Mint’s parameters. We we were free to buy and sell 2010 ATBs in secondary markets at market prices. The US Mint’s original requirements forced us to expand our retail capabilities.
“With 10 more years of the ATB coins, it only makes sense to develop and use these expanded capabilities.” ¦
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