The U.S. Mint, Secret
Service and other federal government agencies are being asked by
two congressmen what efforts are being undertaken to stem the
infiltration of counterfeit U.S. coins, primarily precious metals
bullion coins, into the nation’s economy.
X. Mooney, R-W.Va., and Frank D. Lucas, R-Okla., sent a letter Oct. 27
addressed to Acting Principal Deputy U.S. Mint Director David Motl and
U.S. Secret Service Director Randolf D. Ailes, while copying Kevin K.
McAleenan, acting commissioner for the U.S. Customs and Border Protection, and Maureen
Ohlhausen, chairman of the Federal Trade Commission, seeking answers.
Lucas is an avid coin collector.
Three rarities are identified among the smallest
Also in our Nov. 13 issue, columnists dissect a few poor attempts
at counterfeiting American rarities and explain an obsession to
search for surprise coins.
Both Mooney and Lucas are members of the House Committee on
Accompanying the letter was a plated tungsten counterfeit of a 1995
American Eagle 1-ounce gold bullion coin.
“We are sending it to you because it’s our understanding that the
Department of Homeland Security’s U.S. Secret Service was not inclined
to investigate the origin of this and a related batch of these
counterfeit gold American Eagle coins when the matter was recently
brought to its attention,” according to Mooney’s and Lucas’ Oct. 27 letter.
“Given reports of the growing problem of high-quality counterfeits
of U.S. precious metals coins entering the country from China and
elsewhere, we wish to learn more about the U.S. Mint’s actions with
respect to counterfeits of its current-issue U.S. gold and silver coins.”
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Mooney and Lucas are seeking detailed explanations involving:
➤ The nature and quantity of complaints — and resulting
investigations — regarding counterfeit U.S. gold, silver and platinum
coins within the past two years.
➤ Whether, and to what extent, the U.S. Mint has reviewed the
anti-counterfeiting measures that have been implemented by other
sovereign and private mints — and whether the U.S. Mint is preparing
to implement any technologies to protect the integrity of America’s
coins minted of gold, silver, platinum and palladium.
➤ What anti-counterfeiting programs, if any, are in place to protect
the integrity of U.S. coins minted specifically of gold, silver,
platinum and palladium.
➤ The expected roles of the Secret Service, U.S. Customs and Border
Enforcement (Protection), and other federal law enforcement agencies
in detecting and investigating counterfeits of U.S. coins minted of
precious metals and the extent of their coordination with the U.S. Mint.
queried the U.S. Mint for the bureau’s reaction to the congressmen’s
request for information.
Mint spokesman Michael White provided the following response Oct.
31: “It would be premature to comment on the letter, as the Mint has
not finalized its response to the representatives’ request for information.”
David J. Ryder, who served 14 months as the 34th U.S. Mint director
and whose nomination by President Trump as the 39th Mint director is
being considered by the U.S. Senate, indicated during his Oct. 24
nomination hearing before the Senate Banking, Housing and Urban
Affairs Committee that anti-counterfeiting measures would be his top
priority as director.
Ryder has spent the past 25 years, since his Mint tenure, involved
with anti-counterfeiting measures dealing with coins and paper money,
including consulting on the development of anti-counterfeiting details
for the current British £1 coin.
The Secret Service is responsible for investigating any
counterfeiting of United States coins and securities, while
prosecutions are handled by the Department of Justice. (The Secret
Service is also tasked with providing security for the president and
extended family members as well as cabinet and other designated
The bureau’s primary function when established in 1865, the year
President Abraham Lincoln was assassinated, was counterfeiting
investigations. It wasn’t until after the assassination of another
president, William McKinley, in 1901, that the security detail for the
president was added.
While the Secret Service today still investigates acts of
counterfeiting, the dollar value and extent of the counterfeiting
determines whether an investigation is opened. The Secret Service also
addresses fraud involving other forms of currency and monetary
exchange, including digital currency.
The counterfeiting of coinage is as old as coinage itself. However,
during the past 10 or more years, the distribution of counterfeit 18th
and 19th century U.S. coins traced to production in China has
increased exponentially, with the quality of such issues becoming more sophisticated.
Adding to the impact in recent years, not only on the numismatic
community, but the public at large, is the production of plated base
metal versions of U.S. bullion coins, primarily American Eagle gold
$50 and silver $1 bullion coins and gold American Buffalo $50 coins.
Hobby leaders have voiced growing concerns over the problem, but
government agencies in general have shown little interest in combating
the counterfeiting of coins. Hobby efforts in this area have increased
A face-to-face dialogue was opened earlier this year between Beth
Deisher, former Coin World editor and now director of
anti-counterfeiting for the Industry Council for Tangible Assets
Anti-Counterfeiting Task Force, along with other task force members,
and lower level Secret Service and U.S. Customs and Border Protection personnel.
Secret Service officials indicated an investigation often would not
be opened unless the face value of the counterfeiting totaled a
minimum of $100,000. Officials took notice when ICTA representatives
informed them that the intrinsic value of a single American Eagle
1-ounce gold bullion coin at the time was roughly $1,300 per coin, not
the $50 legal tender face value the Secret Service was using to
determine whether to investigate.
“[The] ACTF has focused its efforts on assisting federal, state, and
local law enforcement in the investigation and prosecution of
counterfeiters,” Deisher said. “The most responsive federal agency has
been Customs and Border Protection. ACTF has provided experts to
identify counterfeits seized during a number of investigations and it
is in the process of developing training materials and educational
sessions for agents in the CBP’s 35 regional centers and also for ICE
agents in Homeland Security’s special investigative units. ACTF stands
ready to assist the U.S. Mint and the Secret Service.”
Philip N. Diehl, president of U.S. Money Reserve and ICTA’s current
chairman, succeeded Ryder as the 35th director of the U.S. Mint. Diehl
said the Oct. 27 letter from Lucas and Mooney came shortly after the
second of two meetings ICTA and its Anti-Counterfeiting Task Force
held with Lucas, who Diehl described as “no doubt the most
knowledgeable member of Congress on coinage issues.”
“We shared with Rep. Lucas our concern that the Mint and Secret
Service must become more active on the anti-counterfeiting front,”
Diehl said. “The threat is bigger than they realize and extends to all
US Mint products — bullion, numismatic, and circulating coinage.
Secret Service and the Mint have the authority and resources to do
much more than they’ve done to date.
“We also described how the strong partnership we’ve forged with
Customs and Border Protection is a showcase for what cooperation
between law enforcement and industry can achieve.
“We are optimistic that the Mint will step up to the challenge under
the leadership of David Ryder, once he is confirmed by the U.S. Senate
as Director. The Secret Service will take longer to mobilize, and
we’ll probably need more help from Congress.”
Diehl explained that Chinese counterfeiters today can accept an
order from a U.S. distributor over the internet, produce massive
quantities of high quality fake bullion, numismatic, and circulating
coins, and deliver the fake coins to the buyer’s doorstep in a matter
“The same is true around the world, but other national mints have
taken countermeasures and other nations’ law enforcement agencies have
taken more aggressive action against counterfeiting networks,” Diehl
said. “We must do the same.”
He added, “Coin counterfeiting was not on our radar when I was
[Mint] director. The design, production, and distribution systems of
counterfeiters today are far beyond what they were 20 years ago, and
the financial rewards are far higher.”
Websites advertise and take orders for highly sophisticated struck
counterfeits whose sole purpose on the secondary market is to defraud buyers.
Diehl said not only are U.S. Mint-produced bullion and numismatic
products at risk, so is circulating coinage.
Other world mints are light-years ahead of the United States in
counterfeit protection by embedding electronically recognizable
material in each coin the respective mint produces, so that each coin
can be identified as genuine, Diehl noted.
Deisher said when Coin World published a series of articles
in December 2008 detailing the threat Chinese counterfeits posed to
the numismatic marketplace, some within the hobby dismissed those concerns.
“They did not believe the Chinese capable of producing counterfeits
deceptive enough to fool the experts,” Deisher said. “We predicted it
would be only a matter of time. Unfortunately, our predictions have
proven to be accurate.”
Deisher said the ICTA task force believes the Oct. 27 letter of
inquiry to the U.S. Mint and to the U.S. Secret Service is timely and
was needed to get the two bureaus to work together on the joint
problems the counterfeits pose.
“Seven years ago, during a congressional oversight hearing, Rep.
Lucas and other members of Congress asked Mint officials and Secret
Service representatives about counterfeiting and the possible
threats,” Deisher said. “The Mint admitted then it had not paid
attention to the problem and had not begun to look at ways to protect
our coins. So far as we are aware, the Mint has not developed any
anti-counterfeiting technology since that hearing. We will be very
interested in the Mint’s and the Secret Service’s responses.”
Stefan Gleason, president of Money Metals Exchange and director of the Sound
Money Defense League, commended Mooney and Lucas for finally
taking action on an issue that has long been neglected.
“We commend Representative Mooney and Representative Lucas for their
actions in defending sound money and for beginning to exercise
Congressional oversight duties in accordance with Article I, Section
8, Clause 5 of the U.S. Constitution,” Gleason said. “We look forward
to a meaningful explanation from the U.S. Mint and the Secret Service
for what appears to be a lackadaisical attitude toward protecting the
only constitutional currency that is currently even produced by the
Gleason says the counterfeiting issue is an ever-increasing problem.
“We have several different types of testing equipment which is used
on everything that comes in,” Gleason said. “Without that testing
equipment and proper use thereof, fakes can be hard to detect.
Fortunately, we have run across exceedingly few fakes, but we expect
the problem to increase.
“If people buy from a reputable dealer, then they should be
confident they are getting the real thing. But the average person
probably does not have this equipment themselves.”
The counterfeiting of numismatic or “rare” coins is another issue,
“That’s because it’s relatively easy to detect whether something is
actually gold or silver — or not,” Gleason said. “But fake graded
coins that are made of the real metal may be more tricky.”
Donald Herres, president of Dollartowne in Bellbrook, Ohio, said his firm has
discovered its share of counterfeits from bullion products offered for
sale, requiring each piece to be checked for authenticity.
“Local law enforcement, the United States Secret Service and the
U.S. Mint are overwhelmed with other activities,” Herres said. “The
counterfeit problem, in my opinion, is just not ‘sexy.’ For the feds,
I believe, it’s low priority, a single victim crime or a crime that
only affects a few.
“However, counterfeiting does affect every single American and our money.”
Herres contributed the following insights:
“It would be nice if the U.S. Mint would partner with the bullion
dealer to help with counterfeit detection, education and prevention.
This would include educational materials provided to the dealer for
“I would like to see the U.S. Mint to put a committee together, like
they have with the Citizens Coinage Advisory Committee, to get input
from bullion dealers on counterfeit detection and reporting.
“The Royal Canadian Mint sends out counterfeit detection materials
to subscribed customers. They keep an open line of communication with
the bullion partners. The new coins also have anti-counterfeiting
technology that is embedded in the GML [gold Maple Leaf] and SML
[silver Maple Leaf].
“Most importantly, stricter penalty for possession and sale of known counterfeits.”
Terry Hanlon, president of Dillon Gage Metals, one of the U.S. Mint’s
authorized purchasers of bullion coins, says the wholesale bullion
firm tests for authenticity each and every bullion piece it acquires.
“We see counterfeit coins,” Hanlon said. “There are devices to
measure volume, magnetism, specific gravity and metal content.”
Hanlon notes that some online websites offer counterfeits of U.S.
bullion coins as “reproductions.”
“Why would anyone want to own a reproduction other than to cheat
someone?” Hanlon asks.
Hanlon says the U.S. Mint needs to step up its game on the
“The U.S. Mint has kind of ignored any aggressive action or
proactive approach like that taken by other mints to at least make it
look like they are doing something,” Hanlon said. “There needs to be
political pressure exerted to stop these counterfeits from entering
the country, many from China. The sleeping bear needs to wake up.”