A Hong Kong-based firm that recycles millions of dollars of U.S. coins from China through the U.S. Mint’s Mutilated Coin Redemption Program filed suit Oct. 29 seeking compensation for $3.25 million face value in coins the company claims the federal government wrongfully seized in 2014 and 2015.
The suit from Wealthy Max Ltd., headquartered in Kowloon, was filed in U.S. District Court for the Eastern District of Pennsylvania in Philadelphia on the same day U.S. Mint officials announced a six-month suspension of the Mutilated Coin Redemption Program. That suspension became effective Nov. 2 while an investigation is conducted into alleged wrongdoing associated with the program.
The Mutilated Coin Redemption Program has been operated through the Philadelphia Mint since 1911.
The Oct. 29 suit was filed against the United States Treasury, U.S. Mint, U.S. Customs and Border Protection, and the executives heading those agencies. Attorneys with the Department of Justice, on behalf of the federal government, have up to 60 days to respond to the complaint.
Wealthy Max contends in the suit that the government violated the Civil Asset Forfeiture Reform Act of 2000 and the Fourth and Fifth Amendments to the U.S. Constitution by failing to notify Wealthy Max of the seizure within 60 days or file a civil forfeiture complaint within 90 days.
The federal government filed a civil complaint in August 2015 seeking forfeiture of the three shipments of mutilated coins sent by Wealthy Max Ltd. through the Mint’s Mutilated Coin Redemption Program.
Wealthy Max is one of three companies under federal scrutiny concerning alleged efforts to defraud the program. The other two are American Naha Inc. and XRace Sports Co. Ltd.
According to Wealthy Max officials, the firm has an untarnished record over 13 years of sending more than 150 shipments of mutilated coins for redemption as a by-product of the scrap metal recycling business in China. Wealthy Max reclaims damaged coins from scrap metal shipped to China for recycling, according to the suit.
Federal officials seized three Wealthy Max shipments of mutilated coins — one each delivered June 26, 2014, Oct. 16, 2014, and March 25, 2015 — totaling $3.25 million in face value. The shipments were delivered to the U.S. Mint or designated smelters for eventual metal reclamation after redemption, with the recovered metal to eventually be manufactured into new coins.
Wealthy Max officials claim the funds that would have been received through the mutilated coin redemption, had they not been frozen indefinitely, would have been used to source additional coins for redemption.