How could PCGS miss this artificial toning here

It's not bickering and sniping when you are called a fraud.

 

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I'm not so highly impressed with implied threats, but I will answer some of the questions relating to this. I do note that this is not legal advice and I am not a lawyer. This is purely for general education and not specific to any cases. If you have a question, talk to your lawyer.

First, If you are knowingly sending coins known to be AT, to a TPG, many coins even, YES that is fraud. I will explain that below. It is, though and the contracts you make with the TPGer say that they will involve law enforcement in such a case. In this case you are hoping it slips through the TPG and your not disclosing to them that you either think or know the coins are altered.

Now, does this mean that if you pick up some outrageously toned coins and send them to some experts for an opinion, and you convey this too them, then NO that is not fraud. You're consulting with them. Read the law, I posted it about 15 times. But they are not being slabbed and graded.

The TPGers are different.

If you send forgeries or counterfeits to TPGers, the contract with them states they, at their option, will send the coins to the Secret Service or FBI. That might seem unfair, but that is the way it is.

https://www.cointalk.com/threads/counterfeits-anacs.50255/

In the 1990s, J.P. wrote a correspondence course for the ANA, Detecting Counterfeit and Altered Coins. The Project Director for the course was James Taylor, ANACS’ CEO and President. Later, the two of them collaborated on a nearly three-hour long video / DVD based upon this correspondence course. Both the correspondence course and the video have received industry awards and are available for purchase from the ANA.

Given this rich history, it is clear ANACS has been at the forefront of detecting and disseminating information about counterfeit and altered coins. New and important discoveries are made weekly by ANACS graders. These discoveries are immediately forwarded to the other grading services and some appear in print in ANACS’ Senior Grader Michael Fahey’s Coin World column, “Detecting Counterfeits.”

At ANACS, any coin that we believe may be counterfeit or altered may be returned to the customer with a note calling the piece “Questionable Authenticity.” This would mean we are not absolutely certain the coin is a counterfeit, but we believe it is.

If we are absolutely certain that a the coin is a counterfeit or an alteration, pursuant to federal law and in accordance with our legal obligations we reserve the right to turn the piece over to the U.S Secret Service. The Secret Service’s standard procedure is to contact the current owner and the previous owner and have the previous owner return the purchase price to the buyer. The Secret Service’s ultimate goal is to trace the coin back to the original perpetrator.
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When the TPGers put that label on it, that legally changes the status of the coin. See the consumer protection laws I posted.

If you're not certain that the coin is either a forgery or or ATed, and you send it in without full disclosure, yes, that is fraud (assuming you will sell it or otherwise use it in commerce), and you are on the hook. When you resell that coin, you can be sued by the new owners, under the law for fraud.

Now, lets look at a different condition. Lets say you search through auctions and sales for for coins that you strongly suspect are artificially toned, but you don't know for sure. And in this case, you even have people telling you that the coins are artificially toned, and you have a pattern of turning in such coins to the TPGs, then YES, that is a pattern of business and makes it additional fraud, and is criminal in most states (especially if you try to then sell them). If it is only for yourself, it probably doesn't matter. Consult a lawyer. But when you try to sell them, you have legal tort, and possibly criminal liability.

And being prior informed of a possible problem further makes it fraud. If you have reputable information that coins are AT, If you turn around these coins and throw them back on the market regularly, which is largely what these ebay sellers are doing, IF you can convince a prosecutor to take it (good luck with that), this can rise to the level of criminal fraud.

Sending something into a TPG is not like asking an expert for an opinion, because they slab the coin and turn it into a commodity, which is guaranteed by them. If you fail to have full disclosure, it is what it is, fraud.

It is no different that winding the odometer backwards on a car and then sending it in to be appraised in the hopes of it being evaluated more favorably, or getting a car from someone else who you suspect or knew did that.

Now, lets say you are a collector of toned coins, well you are on a razors edge. When a fraudster purposely artificially tones a coin, that is without question fraud. If that coin reaches the market without clear statement as to the facts of the toning. He is perpetrating fraud. You examine that coin without a description and without adequate due diligence, and you suspect it is a coin that has been tampered with. But you think ... hey I think I have a chance of getting this by PCGS. Well, what the heck do you think that is called? Playing the Lottery?

And you consult with people with experience in these matters and they warn you that the coins are AT, or even might be AT? You won't have a leg to stand on.

If you sell those coins to another person and they crack out those coins and resend them to another vendor and they come back detailed, you are going to be held responsible.

How do you avoid from committing an act of fraud? Well, I wouldn't collect these coins to begin with, but if I was, and I was an honest collector, I would send a note in with the coin explain that I acquired these coins in the raw with whatever limited pedigree information, or whatever pedigree I could find, and tell them that some people I have consulted with felt that these coins are AT. I would tell them bluntly my findings and suspicions. Say, "I have doubts as to their authenticity" and say it in writing. Ask, "Can you authenticate that this is natural toning and grade them and slab them if need be, based on the coins condition and what I told you? " It would also be helpful to tell them from whom you purchased them from. They may very well know a seller, for better or worst. You want a CHAIN of honesty and transparency throughout the process.

I know that is a strange idea in the coin business where silver bullion transactions for cash at local pawn shops and small dealer across the country.. but C'est La Vie.


There is no "Don't Ask, Don't Tell" in business, or in coin collecting, which is what you are implying.

And BTW, Coins don't have civil rights. The circumstances by which a coin arrives to you is imperative EVERY TIME. And it is doubtful that TPGers can effectively tell AT coins from NT on many edge cases. They just don't do a thorough enough physical inquiry, which is really the point here. And they sure as heck don't do a thorough enough investigation as to the unique circumstance of such coins.

 

Has that happened to you?

 

BTW Museums don't take artifacts and slab them and grade them and turn them into commedity investment item on the market. They sort of keep their stuff, usually in the basement.

 

In the case of a US Coin, in which no series has ever been de-monitized, the only 2 relevant facts are these (imo). 1) is the coin genuine and originally struck by the US Mint? 2) Did any alleged alteration change the denomination or date and mint mark or attempt to deceive as to a variety or error? If the coin was struck by the US mint and can still technically be used for commerce for face value, then any toning AT or NT is between the buyer and seller. The coin can be sold above face value for whatever a buyer and seller agrees to. IMO. Buyer beware.

 

He definitely is. NYS Consumer protection law (as I am sure it does in every other state), and federal law BOTH cover altered products and coins specifically. And the TPGers address altered coins specifically. So he said that all the TPGer do is authenticate the coin is genuine, which by his definition includes altered coins. So you might agree with him, but he is in direct conflict with statuary law and the policies of the TPGers themselves.

Furthermore, once TPGers slab and label the coin, it now falls under 20-701 of NYC administrative code, among other places in the law. You have now taken someone else in to have the coin further misrepresented AND the slabbed coins has a different legal status because it has been commoderized((sic) and can be used for investment purposes and trading based on the status of the coin within the slab and the statement of a trading type and grade.

He is entitled to his opinion, but it has no status in the law and no status with the TPGer and doesn't reflect the market which depends on standard grades and slabs for establishing value.

 

No, I just didn't pay that much attention to you blowing hot air at me. If you would make a crediable argument, I would answer it in greater detail. You were in the ignore box.

 

This opinion was tried in court and failed and that is strictly on From Title 18—CRIMES AND CRIMINAL PROCEDURE, CHAPTER 17 -331, which is only ONE of many statues that come into play.

Show me Buyer Beware in the Commercial Law?

In fact it is the opposite. The market is regulated. For example in NY

20-701. Definitions.a.Deceptive trade practice. Any false, falsely disparaging, or misleading oral or written statement, visual description or other representation of any kind made in connection with the sale, lease, rental or loan or in connection with the offering for sale, lease, rental, or loan of consumer goods or services, or in the extension of consumer credit or in the collection of consumer debts, which has the capacity, tendency or effect of deceiving or misleading consumers. Deceptive trade practices include but are not limited to: (1) representations that goods or services have sponsorship, approval, accessories, characteristics, ingredients, uses, benefits, or quantities that they do not have; the supplier has a sponsorship, approval, status, affiliation, or connection that he or she does not have; goods are original or new if they are deteriorated, altered, reconditioned, reclaimed, or secondhand; or, goods or services are of a particular standard, quality, grade, style or model, if they are of another; (2) the use, in any oral or written representation, of exaggeration, innuendo or ambiguity as to a material fact or failure to state a material fact if such use deceives or tends to deceive; (3) disparaging the goods, services, or business of another by false or misleading representations of material facts; (4) offering goods or services with intent not to sell them as offered; (5) offering goods or services with intent not to supply reasonable expectable public demand, unless the offer discloses to limitation of quantity; and (6) making false or misleading representations of fact concerning the reasons for, existence of, or amounts of price reductions, or price in comparison to prices of competitors or one's own price at a past or future time; (7) stating that a consumer transaction involves consumer rights, remedies or obligations that it does not involve; (8) stating that services, replacements or repairs are needed if they are not; and (9) falsely stating the reasons for offering or supplying goods or services at scale discount prices.

 

Just to emphasis it

the use, in any oral or written representation, of exaggeration, innuendo or ambiguity as to a material fact or failure to state a material fact if such use deceives or tends to deceive;

 

And we should be familiar with this:

Garrett v. BankWest, Inc., 459 NW2d 833 (SD 1990). There, this Court held for the first time that “[e]very contract contains an implied covenant of good faith and fair dealing which prohibits either contracting party from preventing or injuring the other party’s right to receive the agreed benefits of the contract.”

Good faith is defined as “‘honesty in fact in the conduct or transaction concerned.’” Id. (quoting SDCL 57A-1-20(19)); Restatement (Second) of Contracts § 205 (1981). See also Mahan v. Avera St. Lukes, 2001 SD 9, ¶¶30-31, 621 NW2d 150, 159-60; Nelson v. WEB Water Dev. Ass’n, Inc., 507 NW2d 691, 698 (SD 1993). “Good faith is derived from the transaction and conduct of the parties. Its meaning varies with the context and emphasizes faithfulness to an agreed common purpose and consistency with the justified expectations of the other party.” Garrett, 459 NW2d at 841 (citing Restatement (Second) of Contracts § 205, cmt. a (1981)).

 

You are misinterpreting the law. A buyer and seller can agree to any price of an object they want. In the case of coins struck for commerce as long as they are genuine I can sell them to a buyer for a mutually agreed upon price.

 

That is not at issue.

 

All the ad says is stunning toned UNC. How is that fraudulent? Is it toned? Is it UNC? Is it stunning?

 

That is not what it says... whatever it is... I assume you are talking about his ebay advertrisement which is about 200 words and many photographs. Don't ignor the rest of his selection, and his history. I really am not up for a back and forth of selective reading of the evidence. Save that tacket when your the defense attorney and can bill by the minute.

 

Then what is the issue? A TPG graded a coin in hand and you have seen a picture on the internet and you think your opinion is correct and PCGS' is wrong?

 

I am not going to repeat this all. I love you Razz, but the issues have been explained ad nusium.

The issue is if he is artificially toning coins and trying to slip them past the TPGers and sell them for extreme premiums. If you are going to argue that this activity would not be fraud, I am just going to point you to what was already written.

If you want to argue that the law doesn't afford this kind of consumer protection in standard business commerce, I'm all ears to any case law.

 

Yes, and it’s only with toned coins, QC every time. I no longer submit any coins even remotely toned.

 

And no way to know if the customer is telling the truth or even knows the truth. Nothing good would come from this.

 

They shoul.d do more than that. They should have the information entered into a database to help protect clients from coin thefts, and to help law enforcement find patterns of aubse and fraud, if called upon. As for the costs of this, it is what it is. They will have to charge whatever fee structure that they have to. That is my opinion. Its another topic really, but the TPGers should be taking much more responsibility to assure their authenticated slabs are first off all correctly graded and autheticated, and secondly to be a deterent to crime by tracking the pedigree of all the coins that they grade. They should also be using AI coin recokognition software. This way if a coin is cracked out, it can be reasonably identified. Years ago this wouldn't be possible. Today it is somewhat forward make the market far more secure for collectors and investors.