Over the past two years, my associate, Jerry Jordan, here at Universal Coin & Bullion, has ordered numerous rare coins and bullion bars for educational purposes from the Wish platform. These coins and bars, professing to be extremely rare and valuable finds, were all obvious fakes from Chinese vendors.
With social media platforms growing in popularity, peddling counterfeit products is only becoming more pervasive. Facebook and Instagram have overtaken eBay and Amazon as the key marketplaces for selling counterfeit goods to the public.
According to Forbes, counterfeiting is the largest criminal enterprise in the world, greater than illicit drugs or human trafficking. It’s expected to grow to $2.8 trillion by 2022, costing 5.4 million American jobs.
For our part, Jerry and I have forwarded these fake items to the National Anti-Counterfeiting Task Force and its leader, Doug Davis, to get the help of law enforcement.
There was a “Credit Suisse 1-ounce Gold Bar” costing $2, plus $3 shipping. It would have been worth $1,500 when he ordered it and nearly $1,900 today, but it’s essentially worthless because it was fake[LB4] . Jerry also ordered an 1899 “Queen Morgan Silver Dolar” (sic)—that would have graded XF (Extra Fine) and been worth $140—for just $3.89 shipping. The counterfeit coin was listed at no charge.
A $10 Million Coin for $1.83
Then he ordered a gold coin that would be worth $10 million or more if it were genuine: a 1933 Saint-Gaudens Double Eagle—but it sold for $1.83, plus $2 shipping. You can’t fault them for greed.
They chose some extremely valuable coins and sold the knockoffs for a ridiculously low price. But none of these fake coins had the word “COPY” stamped on them, as is required by the updated 2014 U.S. Hobby Protection Law for counterfeits.
Despite assurances that it would crack down on counterfeit goods and intellectual property flowing from its country, the Chinese communist regime continues to reap billions from the sale of fake merchandise, and it’s now affecting an area of the U.S. economy that many wouldn’t suspect.
Counterfeit precious metal items rob many Americans of their life savings, which is an indirect health risk, or can cause machinery to malfunction at high speed, which can cause serious injury or death. The Federal Aviation Administration (FAA) estimated that 520,000 counterfeit or unapproved parts are installed in aircraft each year, and U.S. military aircraft are reportedly “riddled with counterfeit parts,” of which around 70% come from China.
Some of the health dangers included alarming amounts of heavy metals in health and beauty products. One lipstick had 751 times the amount of lead that Health Canada considered acceptable for cosmetics. As scientists have shown, lead affects a person’s cognitive ability, and it’s especially dangerous for children.
Experts interviewed by the Canadian Broadcasting Company (CBC) were concerned not just about the health issues related to counterfeiting—but about the funds being used for nefarious activity. Interpol states on its website that there is a clear link between illicit trade and human trafficking, drug trafficking, corruption, bribery and money laundering.
In the past few years, I’ve reviewed several customers’ coin collections and, sadly, detected one or more counterfeit coins. In one instance, the majority of one person’s collection consisted of “counterfeit proof” Buffalo one-ounce gold coins, with all coins appearing in what looked like genuine NGC holders. The holders themselves were fraudulent.
In April 2021, U.S. Customs and Border Protection (CBP) officials seized $685,000 counterfeit U.S. notes that all originated from China. The fake U.S. currency included $5, $10, $20, $50, $100 bills that were all turned over to the U.S. Department of Homeland Security and the U.S. Secret Service. Included in the overall total number of bills were 976 $100 bills head to New York, according to the CBP.
Even more egregious, during the first three months of 2021, officials seized over 100 shipments of counterfeit bills totaling $1.64 million from a single international mail sorting facility in Chicago. There are nine such sorting facilities across the United States.
“From Jan 1 to March 31, (2021), officers seized 80 shipments of counterfeit currency, 24 shipments containing fake silver dollars and five shipments containing counterfeit foreign currency,” states a press release from the CBP. “CBP officers seized 24 shipments containing fake silver dollars.”
The addition of collectible coins and silver dollars is not new, as our own investigations have revealed similar results.
Millions of normal circulating U.S. coins, such as quarters and half dollars, as well as bullion and rare collectible coins, have now been counterfeited by Chinese interests. More recently, U.S. law enforcement seized over $1 million dollars’ worth of counterfeit circulated George Washington quarters believed to have been made in China.
NBA Promotes ‘Wish’
It’s well known that the online sales platform “Wish,” which sources most products from China, was rife with counterfeits, yet the NBA’s Los Angeles Lakers accepted $36 million, less than LeBron James’s annual salary, to adorn the Lakers uniform with a large “Wish” logo for a three-year period. This comes from a league that seemingly discourages players or executives from criticizing Chinese humanitarian and labor practices or taking a stand against China’s authoritarian acts to usurp a democratic Hong Kong. Then there’s China’s alleged mistreatment of the Uyghur community.
On March 2, 2020, H.R.6058 (dubbed the “Shop Safe Act of 2020”) was introduced in the House of Representatives. It would amend the “Trademark Act of 1946” to give certain e-commerce platforms contributory liability when counterfeits are sold that pose a health risk to consumers. The key phrase is “health risk,” which seems to shut coins and some other important products out of the equation, even though some fake coins and precious metals coming from China contain traces of cyanide, which could pose a significant health risk.
For our purposes, leaders in the numismatic community will work hard to see that this bill is modified and reintroduced in 2022 so that it would cover counterfeit coins, most of which are made and delivered from China. Specifically, we would like to see it contain a reference to the Hobby Protection Act, as amended in 2014, to cover counterfeit coins.
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Michael Fuljenz, president of Universal Coin & Bullion, has appeared on Fox Business News and CNBC and is the American Numismatic Association Dealer of the Year.
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