FBI Warns The Public Of Counterfeit Coin Scams
By a Biometrica staffer
Counterfeit coins are increasingly being sold online and via social media, targeting customers, a Federal Bureau of Investigation (FBI) advisory warned on Thursday, Sept. 9. Per the report, investors and collectors are at risk of losing money in these purchases from scammers who claim the coins are originals. The FBI said there are three types of counterfeits: transactional coins (quarters, dimes, etc.), numismatics (high value collectables), and bullion (precious metals).
The elderly were most likely to fall prey to scammers selling fake or overpriced precious metals, the American Association of Retired Persons says. Estimates suggested that millions are being spent online in these purchases in which customers ultimately receive near-worthless foreign-made counterfeits.
In April 2021, U.S. Customs and Border Protection (CBP) officers at Chicago’s international mail facility seized 279 shipments from China containing counterfeit coins and currency. Similarly, in 2020, CBP seized over $1.64 million in counterfeit cash and coins at Chicago O’Hare International Airport.
Amateur investors online have been particularly badly hit in 2021 as a result of a coin shortage brought about by the Covid-19 pandemic. Many victims found buying online an easy and convenient method to make investments, as they could easily find what they were looking for, paid cheaper prices, and had their investments delivered right to their doorstep.
The FBI recommends purchasing from reputable, registered coin dealers. In case of purchases outside these avenues, the FBI says customers should get their coins tested by a certified organization.
The Anti-Counterfeiting Educational Foundation (ACEF), a non-profit organization, said that they helped law enforcement remove more than $1 million worth of counterfeit rare coins and precious metal coins in 2020.
ACEF assisted CBP in seizing over 1,500 counterfeit silver American Eagles at Dallas-Fort Worth International Airport and worked with the Treasury Department’s Office of Inspector General (OIG) in the seizure of fake rare coins valued at over $450,000.
“ACEF/ACTF has become a central repository for offenses related to counterfeit coins and precious metals. We’ve developed a searchable database for offenses and intelligence information and are continually providing a tool for law enforcement to identify trends, patterns, suspects, manufacturers, as well as uncovering websites and social media platforms offering counterfeits,” said Doug Davis, ACEF’s Director of Anti-Counterfeiting.
There were broadly five different ways in which counterfeit coins are produced, according to American Rarities. Cast counterfeits are the most basic method. Electrotypes are made by creating an impression from a coin on a soft material and then using that to make fresh coins. In the transfer die method, the coin design is used on a working die to strike coins. In spark erosion, an electrical process is used to etch die steel. Finally, in the struck counterfeit method, a model die is hand carved and then used to produce coins.
While authorities say the best way to check the authenticity of coins is to use an expert or an expert agency, the Chicago Gold Gallery offers some simple tips that all buyers can also follow.
The first is to look for a casting seam on the edge of coins. The second is to check if the coins contain any dimples or pockmarks, as the methods used by counterfeiters are unlikely to produce the same quality as the mint. Another is to look for mint markings on coins. Finally, they suggest checking the density of the coins, as counterfeits may be made to the right thickness and diameter but may not be of the same density as coins from the mint