Counterfeit coins’ menace on the rise again, advocate says

NCLT fakes abound, but RCMP’s interest has waned

By Jesse Robitaille

Imagine you’ve worked for decades on your hobby – gaining knowledge, material and friendships along the way – only to lose it all on a few counterfeit coins.

That’s the situation facing many Canadian collectors today, says Trenton, Ont.’s Mike Marshall, who began his campaign against counterfeit coins in 2007.

“They’re everywhere, and it’s every day,” he said, quickly calling out names like eBay, Alibaba and Dhgate, all prominent e-commerce companies, each with numerous vendors offering counterfeit coins. “The online markets have been inundated with them.”

Marshall, a well-known counterfeit coin researcher and educator, is essentially the last line of defence for collectors of Canadian non-circulating legal tender (NCLT), or collector coins. And after a decade-long upsurge in overseas counterfeit production, he said the problem now threatens the investments of all Canadian coin collectors.

“What’s really scary is that no one among the powers that be is getting involved. The Royal Canadian Mint won’t work with anyone,” he said, adding that the Mint stopped working with him in 2011 after RCMP Pacific Region counterfeit co-ordinator Sgt. Tony Farahbakhchian was reposted. “As far as I know, the Mint isn’t doing anything.” 

INSIDE THE ONLINE  COUNTERFEIT MARKET

On the day we speak, April 2, Marshall says he has already removed 39 coins from eBay – a daily ritual for the lifelong collector – but he’s certain there are more to find.

He instructs me to type “ebay.ca” into the address bar of my web browser, and we’re off to the races. From there, he says to select the category “Coins & Paper Money” and search for “plated.” After clicking search, he says to select the “Coins: Canada” category from the left-hand side and then sort the search by time, with auctions ending soonest showing first.

Before you know it, Marshall has a hit. The first listing is for two 1976 one-cent coins plated in silver and tin and offered for 99 cents US.

“The big issue is what are buyers doing with these coins?” he asks. “Are they reselling them, for profit?”

According to section 11(1) of the Canadian Currency Act, plating coins for resale is illegal: “No person shall, except in accordance with a licence granted by the Minister, melt down, break up or use otherwise than as currency any coin that is current and legal tender in Canada.”

As such, there are consequences involved, including a fine of up to $250, a prison term of up to 12 months and the forfeiture of the counterfeit coins in question to none other than Queen Elizabeth II.

Marshall quickly moves on to the next listing, this one for both the 2013 and 2014 sets of Superman coins. Unfortunately, the coins are fakes, made with a “silver and gold plate” and sold in a convincing metal box to fool unsuspecting collectors.

“The Superman coins are widespread online,” he said. “They appear every day, without fail.”

While a quick search shows a genuine set of these coins will run you about $2,400, both counterfeit sets were being offered for less than $40 US.

“Someone is going to lose a lot of money some day.”

The next listing Marshall finds is a doozy.

First, he directs me to some “rare” 2012 one-cent coins that were plated in silver to look as if they were mistakenly struck on 10-cent planchets.

“Rare?” he asks rhetorically. “He made the damn things! They’d be valuable errors if they were genuine, but instead they’ll be costly mistakes.”

A genuine “wrong planchet” error, like the one offered in the listing, is estimated at around $100; however, the seller was asking only $3 US for a pair of the fakes.

“They’re illegal, and he knows they’re illegal,” he says. “If some scammer gets his hands on these, they could move lots. The people who plate these coins do a good job.”

Marshall then looks at what else the seller was offering and finds “27 altered and/or counterfeit coins” in total.

While showing me around the online counterfeit market, Marshall reports each listing he knows contains counterfeits.

“If I’m not 100 per cent certain, I do nothing about it.”

All were promptly taken down by eBay, potentially saving hundreds of Canadian coin collectors from big losses and endless headaches.

“On top of those 39 coins earlier today, we probably just did close to 100 coins,” he says. “Of course, some days there are more than others.”

Alarmingly, he claims to have reported more than 1,000 counterfeit coins in the past week alone.

“I believe that I reported over 2,000 counterfeit coins in a one-month span in February of 2013 on eBay alone,” he said, adding that most were NCLT. “I cannot put an accurate total number since 2007, but if you include all it must be over 100,000 coins.”

KNOWING YOUR COINS

How does one man report 100,000 counterfeit coins?

Marshall said counterfeiters create the dies used to produce the fakes, so there are markers flagging each counterfeit coin, if you know where and how to look.

“I personally trust my eye to pick out the markers of the counterfeit coins, but I trust my ability through education to recognize when something is wrong with an effigy or the legends.”

He said he mainly looks at the size, weight and individual markers of a certain coin to determine its genuineness.

“The manufactured dimensions are key. This is where the individual’s education of the series of coins they are interested in comes into play. There’s no rocket science in what I do – it’s just being patient enough to do it.”

Marshall said counterfeit coins have remained a constant problem since he started his seek-and-destroy mission in 2007. Still, counterfeits of all kinds are readily available every day in online markets and even on bourse floors.

“At the Toronto Coin Expo in 2013, I laid out a bunch of the $5 silver maple leaf coins and asked dealers how much they’d pay.”

Marshall said the dealers were practically rushing to purchase the coins, with most offering to pay $25 for each.

“So I said, ‘Good thing I only paid a dollar for them!’ They were all fakes, but if you looked closely, you could tell. There are markers.”

He said this highlights how widespread the issue of Canadian counterfeit coins has become.

“From known fraudsters to the actual manufacturers of the fakes, a little effort searching will uncover literally hundreds of counterfeit coins,” he said. “They show up at small-town auctions like clockwork.”

Over the past two years, there has been an increase in Chinese-made counterfeits with NCLT replicas.

And this “new wave” of counterfeits has ramifications for a large base of collectors, he said.

“In 2007, it was primarily Canadian and Newfoundland decimal counterfeit coins surfacing, which are still common today, but now you must add in the NCLT group along with the bullion collectors.”

He said education should be of “paramount importance” to any buyer, and if the price is too good to be true, it probably is.

“Buy a reputable book like Charlton’s, study it and learn from reputable dealers and clubs as well as chat boards like numissociety.com or coincommunity.com. Educate yourself before you buy. Only buy from trusted individuals or from reputable auction sites with good return policies.”

Marshall, a lifelong collector himself, said purchasing coins online and in person should be an “exciting, rewarding experience” and again recommended word of mouth and reputation in determining where and when to buy.

“Buying online increases the inventory you are able to view astronomically. That said, buying at your local coin store or show allows you to actually hold the coin before you buy, thus eliminating any surprises when your coin arrives in the mail.”

Alex Reeves, senior manager of communications for the RCM, says the Mint does take the issue of counterfeiting seriously.

“The investigation of counterfeiting activity is a law enforcement responsibility and monitoring that activity is outside the Mint’s mandate,” said Reeves. “We do take the issue of counterfeiting very seriously and such activity is addressed (once detected) with the assistance of domestic and international law enforcement authorities.”

Reeves said the Mint encourages anyone in possession of counterfeit products to reach out to law enforcement authorities without delay.

“And finally, we always advise collectors to only buy from reputable sources and we do follow-up with websites that host pages selling counterfeit of Mint products when we become aware of such activity.”

In 2011, the RCMP launched a counterfeit Canadian coin website at counterfeitcoins.bc.rcmp.ca. to promote public awareness around detection of counterfeit Canadian coins. However, when Farahbakhchian was reposted, the site went down, and nothing has taken its place.

“There’s nothing I’d love more than to have a conversation with the Mint’s new president so I could show her and explain the situation,” Marshall said.

Marshall is currently in discussion with several coin clubs in Ontario to hopefully conduct seminars in the fall.

“People are shocked when they see the diversity and the sheer quantity of the counterfeits in person,” he said. “I only fought when I knew I was gonna win – I fought with facts. Now eBay.ca works with us, and I can reach Canadian coins that are on all of eBay’s platforms.

“This is just one little grey-haired old guy sitting in Trenton, Ont. Now imagine what we could do with the bureaucracy – the Mint, the border control, the RCMP. All they have to do is look for them and stop them.”  W

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