President Trump could use a guardian angel before he sometimes rudely or crudely tweets or comments, but he isn’t often given credit for being the first President to strongly resist China’s product piracy and massive counterfeiting efforts. His appointment of a respected anti-counterfeiting expert, David Ryder, is one more step in this direction. I believe David Ryder will make an excellent director of the Mint. (He also served as Mint Director during the 1992-93 transition from President George H.W. Bush to President Clinton.) In the business world, he has valuable experience as CEO of Secure Products Corp., in developing highly advanced anti-counterfeiting technologies for the protection of global currencies and other valued documents. This experience fits right in with President Trump’s stated desire to stop China’s assault on America with counterfeit products, including counterfeit rare and circulating coins. In my opinion, many in the media don’t give the President sufficient credit for this hiring and successful efforts in addressing China’s transgressions in business and trade.
Craig Crosby, founder of The Counterfeit Report, detected millions of knockoffs on eBay and Alibaba and 32,000 counterfeits on Amazon. Apple reported that 90% of all “Apple” products they purchased from Amazon were counterfeit. Counterfeiting is now the largest criminal enterprise in the world, netting $1.7 trillion per year, greater than illicit drugs or human trafficking. The volume is expected to grow to $2.8 trillion and cost 5.4 million jobs by 2022, and China produces about 80% of these counterfeits. The Chinese also steal the technology of many U.S. companies doing business there.
Intellectual property theft is not limited to those American companies operating in China. Chinese agents are positioned all throughout America stealing corporate secrets. Last July FBI Director Christopher Wray said that the FBI has 1,000 active investigations into attempted intellectual property theft within America, mostly involving China. (For examples, see “China’s Techno-Kleptomania” in the Wall Street Journal, October 15, 2019).
In the past year, I have 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. Many of these counterfeits seem to have been “Made in China.”
Other collectors I helped had counterfeit American Eagle gold coins, as well as counterfeit Morgan, Peace and Trade dollars. Some counterfeit Trade dollars were easily spotted, in that they used dates when no Trade dollars were minted. In other cases, the counterfeit Morgan and Peace dollars were made of nickel, copper and zinc and rang with too high a pitch compared to a real silver dollar when tapped with a pen.
The Chinese have counterfeited millions of normal circulating U.S. coins, like quarters and half dollars, as well as rare collectible coins. Recently, United States law enforcement seized over a million dollars’ worth of counterfeit circulated George Washington quarters believed to be made in China. Among collectible classic U.S. coins, Morgan silver dollars were the most frequently counterfeited coins (reported by 71.7% of dealers), followed by Trade dollars (66.6%) and Seated Liberty dollars (48.6%). The most frequently counterfeited rare U.S. gold coins were the $2.50 (42.1%) and $5.00 gold (36.2%). Among bullion coins, 43.3% of surveyed coin dealers said that some customers had tried to sell them counterfeit silver American Eagle bullion coins, while 41.2% reported customers trying to sell them fake gold American Eagle coins.
Some of the easiest “tells” on fake coins is that they have a bogus weight. We all know the weight of one ounce .999 gold or silver bullion coins, so that is easy to check. Many counterfeits are discovered by a simple “ring” test. The biggest giveaway, however, is the asking price. Fake coins are often sold at very low “bargain” prices. In Asia, fake gold and silver dollars are often peddled at flea markets in Hong Kong and mainland China for $1 to $3 each. Over the Internet, if you see a price that is “too good to be true,” it is too good to be true. If the seller is willing to accept a price significantly below spot, that is a clear giveaway.
In October, the U.S. Mint held its annual Forum, which I was again invited to but could not attend this time. Those in attendance told me the biggest news to come out of the Forum was that the U.S. Mint will be redesigning the American Eagle bullion coins in 2021. That has not happened since they were first minted in 1986. I think the ending of this 35-year series will increase interest in these coins for collectors and investors.
This is being done, in part, to fight Chinese counterfeiting, as has been done by other world mints. This is why it is so important that the New Mint Director David J. Ryder has such an exceptional professional background in corporate security measures.
The Mint also noted that they will be redesigning all our circulating coins, from 1¢ to 50¢, by 2026, so collectors and investors should note this added attention should be good for the collectible coin market and counterfeit deterrence.
When you buy or sell coins, deal with recognized experts who know how to spot counterfeits and how to validate the quality and grading of the coins they buy and sell. For example, I have taught national seminars on fraud and counterfeit detection to collectors, dealers and law enforcement officers for the Numismatic Crime Information Center and authored the consumer alert on safely buying coins and precious metals for the Attorney General of Texas.