Mint to resume mutilated coin redemption program?
- Published: Sep 8, 2017, 5 AM
U.S. Mint officials hope to resurrect before the end of 2017, albeit with revised regulations, the Mutilated Coin Redemption Program. The bureau suspended the program almost two years ago amid fraud allegations against three coin recyclers that conducted millions of dollars in business with the U.S. Mint.
Mint spokesman Michael White said the Mint plans to publish soon in the Federal Register a “Notice of Proposed Rulemaking” inviting the public to comment on proposed revised regulations for the program. The comment period will run 30 days.
How can collectors determine a coin’s value when price guides assign it different values? Also in this week’s print issue, we learn of the first report of a 2017 doubled die variety, found on a Lincoln cent.
On Nov. 2, 2015, the Mint suspended the coin exchange program to assess the security of the program and develop additional safeguards, as necessary, to ensure the integrity of U.S. coinage. The Mutilated Coin Redemption Program currently remains suspended after several six-month extensions.
During the suspension, according to White, the Mint has made significant progress in assessing the state of the program, evaluating risks, and identifying potential remedial measures.
On Nov. 1, 2016, the Mint published in the Federal Register a notice requesting public comment on the effects of such measures on stakeholders, as well as other factors that should be considered to enhance the integrity of the acceptance and processing of mutilated coinage.
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The coin redemption program, before suspension, addressed two categories.
One was “Uncurrent Coins,” or those “U.S. coins which are merely worn or reduced in weight by natural abrasion yet are readily and clearly recognizable and machine countable.”
The other category was “Mutilated Coins,” or “all coins that are bent, broken, corroded, not whole, melted together and not machine countable.”
In 2015, federal authorities, alleging fraud within the Mutilated Coin Redemption Program, pursued civil forfeiture proceedings to seize more than $5 million in mutilated U.S. coins submitted for redemption in 2014 and 2015 by three Chinese-owned recycling businesses — Wealthy Max Ltd., American Naha Inc., and XRacer Sports Ltd.
On Oct. 29, 2015, the same day the U.S. Mint announced it would suspend the coin redemption program beginning Nov. 2, Wealthy Max Ltd. filed suit seeking compensation for its $2,388,000 share of the mutilated coins held by the government but for which Wealthy Max Ltd. had not been compensated.
A settlement was reached in the case, with Wealthy Max Ltd. seeking and receiving dismissal of the case in December 2016, with no ability to refile in the future.
“This ruling reflects the fact that Wealthy Max is a legitimate long-term supplier to the U.S. Mint, and has engaged in no wrong-doing whatsoever,” according to Wealthy Max Ltd.’s legal counsel, Bradford L. Geyer, from GeyerGorey LLP. “In addition, it validates our contention that the government failed completely in presenting any evidence of counterfeiting, or other crimes, by Wealthy Max or any of the accused coin recyclers.
“Currently, Wealthy Max is looking forward to the reopening of the U.S. Mint’s Mutilated Coin Redemption Program, so that its coins can finally be redeemed, and it can get back to the work of salvaging U.S. coins from U.S. recyclable waste.”
Since dismissal of its civil litigation, Wealthy Max Ltd. has subsequently been compensated $730,000 for mutilated coins submitted for redemption and melted but for which Wealthy Max Ltd. had not previously received compensation, according to Geyer.
The remaining balance from the $2.388 million total is expected to be paid once the U.S. Mint restarts the Mutilated Coin Redemption Program and those unprocessed coins are subsequently melted, Geyer said.
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