The 2021 theft of error coins from the Denver Mint involved 2021-D Kennedy half dollars and 2021-D America the Beautiful quarter dollars, according to Richard Delmar, deputy director of the Treasury Department’s Office of Inspector General.

The errors were pieces that, after production, had been “kustered” — waffle-canceled in machinery manufactured by the Dutch firm Kusters Engineering. The machinery uses a series of equally spaced knives to deform a coin into a shape resembling a rippled potato chip.

Coin World was provided a redacted Report of Investigation Aug. 17 pursuant to a Freedom of Information Act request. Coin World filed the FOIA request July 5 after Treasury Department officials did not provide responses to questions posed via telephone and email.

At the time when the Treasury OIG presented a case for criminal prosecution of a Denver Mint employee, which was subsequently declined by the U.S. Attorney’s Office for the District of Colorado in Denver, the production facility was striking the Tuskegee Airmen National Historic Site quarter dollar, the final issue of 56 in the America the Beautiful quarter dollar series.

What the report states

The OIG’s Report of Investigation notes that the report was completed Aug. 30, 2021, acknowledging that is was determined that the unnamed Denver Mint employee had removed 182 error coins and taken them home and provided other error coins to two other individuals.

Despite initially denying the theft to federal investigators, the undisclosed Denver Mint employee responsible for the theft is still on the U.S. Mint payroll.

The OIG Report of Investigation notes that investigators were able to substantiate claims of violating Use of Public Property and Theft of Government Property statutes, but prosecutors declined to prosecute.

The unnamed Denver Mint employee eventually admitted to investigators possessing a few coins at his residence and providing two or three coins to two other individuals as a “souvenir.”

The OIG investigation determined that the unnamed Denver Mint employee accepted waffle-canceled coins from a truck driver working for one of the U.S. Mint’s contracted vendors.

Error coins and other defective pieces determined to be not suitable for circulation release are supposed to be placed in a locked condemnation tank for eventual waffle-canceling.

The canceled pieces are then provided for shipment by the contracted vendor for melting and metal reclamation for processing into new coinage strip.

Federal investigators executed a search warrant at the unnamed Denver Mint employee’s residence where the 182 canceled coins were seized. The report does not indicate whether the two or three additional pieces distributed as a “souvenir” were also recovered.

The OIG’s Report of Investigation did not disclose the types of error coins canceled or how many of each canceled error type were seized.

The coin cancelation equipment has been used by the U.S. Mint since 2003, first at the Philadelphia Mint and later at the Denver facility.

Vendors that provide the U.S. Mint with coinage strip in multi-ton rolls, from which blanks are punched, are Olin Brass in East Alton, Illinois, and PMX Industries in Cedar Rapids, Iowa.

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