Coin World: Chinese Fakes Deceive Some FUN Dealers

Hobo · 01-27-2009, 11:24 PM

Susan Headley wrote a 3-part series of articles for Coin World in December on Chinese counterfeit coins. She has followed those up with an article in the February 2, 2009 issue of Coin World titled 'Chinese fakes deceive some FUN dealers'. In the article she describes how she several Chinese counterfeit coins to FUN in Florida earlier this month and offered to sell them to various dealers. (For the record, she said she would not have completed any sale of these fakes. She was simply trying to gauge the dealers' ability to identify these fakes. The Chinese counterfeits were purchased on eBay from sellers in China and Hong Kong.)

Her results are disturbing. Headley states:

Quote:

Overall, there was about a 50 percent detection rate, with certain coins in the group that I offered proving to be more deceptive than others. I offfered the fake coins to 17 dealers, 15 of whom considered them seriously. Among them, seven made offers to buy one or more of the counterfeit coins.

The counterfeits were grouped according to quality and purchase price (from the counterfeiters):

cheap and poorly made, costing 50 cents to $2 per coin
inexpensive and moderately deceptive, $2.25 to $5 per coin
moderately priced and fairly deceptive, $10 to $50 per coin
extremely deceptive, $50 to $250 per coin

The more deceptive coins are struck on planchets of the correct composition and weight. (Struck counterfeits are generally higher quality than cast counterfeits.) The dies used to strike these coins are much higher quality than earlier dies and produce very convincing coins.

The most deceptive coin of the bunch was a 1900 Lafayette Dollar. This coin was in the 4th group of counterfeits listed above. Most dealers, if they correctly identified this coin as fake, closely examined it for quite a while before rejecting it. Many, unable to point to a specific defect, simply said it did not "look right". Dealer Matt Kleinsteuber instantly proclaimed the Lafayette "counterfeit" because it did not have the strike characteristics of a genuine example. (This is interesting because I have fooled Matt with a couple of my better counterfeits.)

Headley mentioned one collector who bought a 1796 Draped Bust Dollar in a PCGS slab for $9,000 only to find out the slab (and the coin) were counterfeit. Several problems with the slab identify it as a fake.

She also discusses fake 19th Century error coins (e.g., broadstruck coppers and double-struck Shield Nickels) coming out of China.

I highly recommend that every collector read Headley's series of articles. If you don't subscribe to Coin World you should go to your local coin shop and buy the Feb. 2 issue if for no other reason than to read this article.

If the Chinese counterfeits are getting good enough to fool half of the dealers approached at FUN they are getting good enough to fool most collectors. Should these articles scare you as a collector? No. They should make you more aware and should prompt you to educate yourself so you can identify counterfeit coins.

Half Dollar* · 01-27-2009, 11:42 PM

Whoa, looks like its time to renew Coin World! I cant believe so many dealers were fooled, you cant be to careful nowadays. Nice post Hobo.

HandsomeToad · 01-27-2009, 11:43 PM

Quote:

Originally Posted by Hobo

Should these articles scare you as a collector? No. They should make you more aware and should prompt you to educate yourself so you can identify counterfeit coins.

Amen!

Ribbit

**Harryj** · 01-28-2009, 01:20 AM

Thanks HOBO!!!!

Pocket Change · 01-28-2009, 03:38 AM

Quote:

Originally Posted by Hobo

They should make you more aware and should prompt you to educate yourself so you can identify counterfeit coins.

Thanks for passing this on. Great information!

We keep hearing the "education" bit. But really, how many of us can do that. It takes a lot more than looking at pixelated pictures on websites and reading a couple of books.

There might be a chance for someone who collects only one series, but many of us have those "this is what caught my eye" collections. There is no way we can be "educated" on several series.

I would equate detecting (above average) counterfeits to being able to distinguish between the various MS-63+ grades for a particular series. And the common mantra there is that you have to examine IN HAND dozens (if not hundreds) of these coins before you can accurately do this.

Can "Joe the Collector" expect to do this? Will he/she even have the time? Has the hobby become a chore?

Of course, at the end of the day, if everyone is fooled, it doesn't matter if it's a counterfeit. Especially for MS coins - they've never been touched by human hands - it really is just a piece of metal fabricated in such and such a way.

Hobo · 01-28-2009, 04:12 AM

PC,

A good defense is to know what a genuine coin should look like. That way, like Matt K., you should be able to spot something that "looks wrong". The best way to learn what a genuine coin should look like it to look at a LOT of genuine coins. You can do this by going to coin shops and coin shows.

In addition you can get some education on counterfeit detection by reading a book, attending a class, etc. This will help you spot the more obvious fakes by looking for common markers (e.g., tool marks, bubbles or pimples, repeating depressions, etc.) that are found on counterfeits of all denominations and all series.

Pocket Change · 01-28-2009, 05:24 AM

Perhaps my intended point was not presented very well.

Basically, what you have just said does not hold an ounce of water if coin dealers at FUN can be fooled. They have seen hundreds of these coins, they've seen many counterfeits, I'm hoping they know what looks "right", they've read a book or two and probably have the author's cell phone number in many cases. In addition, their very livlihood depends on their ability to detect counterfeits. And finally I'm assuming a dealer who is attending FUN is a bit more "wired" than your average dealer.

So, if experienced coin dealers can be fooled, how can "education" possibly save Joe the Collector?

I don't know why, but I can't get the image of Stella Stevens in her role in the Poseidon Adventure out of my head........

**GDJMSP** · 01-28-2009, 02:21 PM

Quote:

Originally Posted by Pocket Change

So, if experienced coin dealers can be fooled, how can "education" possibly save Joe the Collector?

PC - you make the point that I have expressed countless times for years. That point is that the majority (and this article backs that up) of dealers cannot identify well done fakes. It has always been that way. But most collectors, and dealers for that matter, refuse to believe it.

That is why there are so very, very many decades old collections out there that are literally full of altered, problem and outright fake coins. And the owners of these collections have no clue.

A large part of the reason for that is that collectors have this belief that just because a guy has been a coin for dealer for 30 or 40 years that he is an expert. Well, they are not experts. Most coin dealers only have an overall and superficial knowledge of the coins they sell. What they understand and know well is the market. When it comes to the coins they most often know less than the people they are selling the coins to. That is because the people buying the coins often do specialize in their series while the dealer does not.

So "Joe Collector", with his education, is much better prepared to identify a fake than the dealer is. That is the value of education.

Hobo · 01-28-2009, 05:37 AM

Point well taken.

Authentication needs to become a part of coin purchases. In her article Headley recommended that dealers slow down and carefully study coins before buying them. You can miss some important details if you rush through a stack of coins to only grade them.

dobermann · 01-28-2009, 06:26 AM

I've been offered some Chinese silver dollars that are genuine, for a good price.
I'm reluctant to purchase them with all the fakes about, I might find it hard to resell them in the future.
Do you think they would be a good investment, or should I look for something else ?
Thanks

acanthite · 01-28-2009, 08:10 AM

Thanks for the article Hobo. I would like to see another study along these lines, but using different sellers. For example, an unknown seller (maybe even someone looking Chinese) presenting these coins as opposed to someone the dealer may recognize and therefore at least subconsciously have more trust in. This may well factor into how hard they scrutinize the coin. Especially at a larger show where business is moving very quickly.

**FreakyGarrettC** · 01-28-2009, 08:24 AM

I read that yesterday. Scary stuff. Susan Headley is the one who edits the about.com coin collecting section right?

jloring · 01-28-2009, 08:24 AM

I think master forger Mark Hoffman might have stated it best:

"If I can produce something so correctly, so perfect that the experts declare it to be genuine, then for all practical purposes it is genuine. There is no fraud involved when I sell it."

Now that is scary....