PCGS Sues Coin "Doctors"

I read the article today outing the coin doctors and PCGS's attempt to recompense the money that they have paid out for this groups altered coins that have ended up in their slabs through a lawsuit. I'd really be interested in hearing everyone's thoughts on what's going down.

Lets try to have a civilized discussion about this and not turn this into a PCGS bashing thread please.

 

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You mean like in this thread - both the topic and the "civilized" discussion. http://www.cointalk.com/t110474/

 

I think being able to prove that the defendants acted willfully, fraudulently, maliciously, and in wanton disregard of CU’s rights is going to be very difficult. Maybe the coin docs are customers of these dealers and all the dealers are doing is submitting coins for their customers w/o knowing they are doctored.

 

I suspect that it is going to have a lot more to do with their contract not to submit any altered coin than it has to do with fraud

 

Am I missing something? These doctored coins ended up in PCGS slab - right? Then somehow these coins ended up in collectors hands and PCGS had to buy them back? Is that what happened? I would want to know why PCGS did not catch them to start with, but could understand if they were that good. I need more details.

 

That is exactly what happened. This was a high tech crew using lasers to remove surface abrasions on gold... really high tech stuff. They were also using putty and patching coins with issues and cutting full bands onto dimes.

 

Who ended up catching the doctoring? Just wondering how it was found if it was good enough to get by PCGS.

 

The article didn't really who said caught them... Just that they were responsible for the doctored coins... and that they still had some in their possession to be used as evidence in court.

 

I'd be really interested in this group, how they did it, how it got past pcgs, how the coins got found out, etc. Then I could render a proper analysis on the situation.

 

I agree with BQ. I need more input before I can "rush" to judgement.

 

From what I read somewhere, the putty and stuff became noticeable over time as the fixes were only temporary at best.

 

As I read it 2 (possibly 3) never got slabbed. See the list here http://www.cointalk.com/t110474-3/#post903057

 

You can read a lot more "opinions" here: http://forums.collectors.com/messageview.cfm?catid=26&threadid=776604

 

Remember that only recently has PCGS started using "publicly" their method of using a laser to read surfaces on a coin ( I forget if the laser rotates or the coin , but same result) to establish the surface "fingerprint". Any alteration by another laser or other physical means could then be validate by comparing a second "fingerprint". I suspect they have been using their device in house for a significant amount of time, especially on high end coins such as these, Now if they did so because of suspicions or just got lucky , or even did it at all, only they and the court will soon know in discovery. IMO.

 

If PCGS wins this does the 3X ammount of monetary damages get put back into the business?
If so, should we expect to see a rise in stock prices on judgement day?

 

Your statement would suggest that the dealers in question aren't as knowledgeable about coins as they should be.

 

Or maybe they were really busy that day and didn't look over the coins carefully.

 

I have followed this story with intrepidation and believe Collectors Universe is not only interested in recouping the guarantee buy back costs, but their action is a hard core cease & desist public proclamation that we as a publicly traded company now have the tools to identify manipulated coins and have the willingness to legally go after those authorized PCGS Dealers who submitted them.

I say it was a risk that will play out in the future of our hobby and give those who wish to deceive for profit, second thoughts.

The one thing that astounds me is one of the defendants named is a co-founder of PCGS.

Career criminals always find ways to circumvent current methods of detection, so the TPG's need to be ever diligent.

Happy Collecting

 

It may not be that hard to prove. This scanning technology they recently announced has been around for awhile and PCGS has probably been playing with it and testing it for months before they announced it. I suspect that they have a record of coins that were submitted back when they were running their tests which a month later were coming back through again from the same submitters and the equipment was flagging them as being the same coin but they are now "different" than they were the first time through. The flagging made them take a closer look and the found the alterations or features which were there the first time are no longer there (certain bagmarks etc) Add to that coins that have been submitted by those same people which later turned in the holder and PCGS had to buy back casts more suspicion. In the past PCGS just bought them back because there would be no way to prove they knowingly submitted altered pieces, but now the new equipment is allowing them to say yes they ARE altering the coins to try and get an unwarranted higher grade.

 

In order to do this, PCGS would have to "fingerprint" each submission of the authorized dealers as a matter or course, and I assume that there are royalties involved for each each by the developing company, so I feel that for the time being, only those so graded as SECURE will be protected against modification and resubmission, and could be used as evidence if re-submitted.

Now is the new procedures that the submitter pays well for, to help protect the submitter or PCGS buy-back ratio and corporate bottom line? If the latter, it should be done cheaply for all coins submitted. IMO, which may not be that of PCGS or their "followers".