EDITORIAL

NEWS

A "Hoard" of Late Roman Copper, LRC, counterfeit coins appears

Weeding out the "Franklin Hoard" and other spurious western coins

British one-pound coin counterfeiting reaches a "level of political significance"

COUNTERFEITING SNIPPETS FROM AROUND THE WORLD

Circulation coin

Collector coin

MY COIN DIARY

IN PRINT

"Newton and the Counterfeiter" by Thomas Levinson

"Using the optical mouse sensor as a two-euro counterfeit coin detector"

"Laser and electron beams physical analysis applied to the comparison between two silver tetradrachm Greek coins"

Welcome

Once again the Counterfeit Coin Newsletter, CCN, has attempted to bring together a cross-section of counterfeiting news from across the numismatic world.

Misinformation on the internet

The danger associated with the rapid reproduction of out of context information across the internet was illustrated in November 2009. An article appeared in "Science Daily" describing a Spanish research paper that had appeared in the scientific journal, "Sensors" [see IN PRINT below]. This article stated that, "..some optical mice can be used to easily and cheaply detect counterfeit euros". The information in this "Science Daily" article was then reproduced in general and coin magazines and forums across the web e.g. Numismaster.

The problem with this is nobody appeared to go back to the original scientific article. This clearly states that the method was able to identify the vast majority of local class (usually cast) euro counterfeit coins but only 24 percent common class (struck) euro counterfeit coin. Regular readers will be aware the vast majority of euro counterfeit coins are the struck, common class types. So despite the fuss on some of these sites, this technique, as reported, is of limited use in identifying counterfeit euro coins. It is to be hoped that this type of reporting will not undermine the investigation of automatic, visual techniques for identifying counterfeit coins. CCN certainly hopes that this may be the way forward in automatically identifying the many counterfeit one-pound coins that currently cannot be identified by electronic sensor methods.

Photograph of a Serbian "Hoard" fake Constantius II with gateway reverse, reproduced with the kind permission of Wildwind website from http://www.wildwinds.com/coins/ric/fakes2009.htm

A "Hoard" of Late Roman Copper, LRC, counterfeit coins appears

PCGS coin grading and authentication services have posted an article about their guarantee and changes in the way it deals with World coins and copper coins. PCGS now limits the guarantee on non-U.S. coins to $10,000 per coin, with a limit of $1,000 per coin for Chinese coins.They state that, "In the past 24 years, PCGS has paid out $7,320,437 under the terms of the PCGS Grading Guarantee". This amount is so large because, "if we make a mistake...[we compensate] with an actual cash guarantee for the market value of the coins we grade and authenticate." The press release then describes the twelve most expensive mistakes they have made. These include authenticating five coins that subsequently were identified as counterfeit. PCGS described these counterfeits as:

"1849 Mass & Cal $5 AU55 $150,000, June, 2006. This is a very rare territorial gold coin that turned out to be counterfeit."

"1861/57-S Clark Gruber $20 MS63 $75,000, November, 2007. This coin had been known to the coin community for decades. In fact David Hall had it at coin shows for sale in the mid-1970s. But research eventually showed that this coin, and several other Clark Gruber rarities, were actually counterfeits that were probably made in the 1950s or 1960s."

"1861 Clark Gruber $20 (three) MS62s $55,000 each, January, 2008. Same type of circa 1950s counterfeits as coin above."

PCGS have not been prepared to tell the CCN details of the research evidence against these items. Presumably it is part of the belated attempts by the USA's coin community to deal with the legacy from the "Franklin Hoard" and other spurious early western coins. The "Franklin Hoard" originated with Paul G. Franklin and was marketed by John J. Ford. Some of the research on these items was commendably documented in the E-Sylum in 2008, volumes 31 to 34. The main forum for considering some of these early western pieces has been the Pioneer Gold Forum. This group of experts was brought together by Don Kagin under the auspices of the "Society of Private and Pioneer Numismatists", SPPN. Kagin told the ESylum that, "the $20 1861 Clark Gruber & Co. Proof-like ... issues...were discovered in the late 1950s but the origins seem to have been Jack Klauson from an old guy in Denver, or so he told me...A unanimous determination was made that the coins in question were 20th century Fantasies made for collectors." This decision was made in the early part of 2008. PCGS are now labelling these proof-like 1861 Clark Gruber $20 coins as fantasy pieces in their registry.

Over the years this issue has become interwoven with personality clashes etc so it is important to name those making these decisions. Kagin reported that the members of the Forum were:

* Andy Lustig
* Robert Rhue
* David McCarthy
* Don Kagin
* Fred Holabird [see note 1]
* John Dannreuther
* Mary Sauvain
* Stuart Levine
* Robert Leonard
* J.P. Martin
* Tony Terranova

Members not attending the Forum (but participating in viewing and chatting):

* David Camire
* Tom Delorey

Non-members invited to attend who participate by either examining the coins and material or commenting at the meeting:

* George Fuld
* Q. David Bowers
* John Kleeberg [see note 2]
* Ira Goldberg

Counterfeit Coin Newsletter No.11 reported, "In August 2008 a press release from Kagin's announced that the SPPN had determined that the so-called United States Assay Office proof gold $20 were "Transfer Die Forgeries"." The E-Sylum reproduced a discussion "in the Colonial Newsletter Foundation Google groups, where George Fuld revealed:

"I started this coin study of the so-called proofs in early 1964 with a group Made up of Dr. James O. Sloss, Abe Kosoff, Eric Newman and myself. As a public service, the Metallurgy Research Laboratory of the Goodyear Tire and Rubber Co. did x-ray studies and photomicrographs and back scatter x-rays. All data was transmitted to Eric about six months later and he carried the ball up to the 1967-8 PNG hearing. One proof was sent to the Secret Service--but they declined to study it as they claimed that the USAO was not a government Mint until 1854 although the USAO was a US government agency."

Eric Newman recounts in the E-Sylum that:

1. "Paul Garland of Tennessee as a claimant asserted that a "proof" 1853 $20 USAOG coin sold to him in 1965 for $3,000 by Tom Ryan of Illinois was a fake and an arbitration was arranged by PNG in 1966... When Paul Franklin was a witness he was asked the details of the source of the "Franklin Hoard" $20 USAOG pieces including the coin under review. Franklin refused to answer and his representatives asserted that no dealer should be required to disclose his business sources."

2. "During the arbitration proceedings it was pointed out that the coin under review and all other known pieces from the "Franklin Hoard" $20 USAOG pieces had 170 reeds on the edge rather than 164 reeds on previously known 1853 $20 USAOG pieces: and also that on at least one of the "Franklin Hoard" pieces there appeared on the face a thin weak incused compact helical or spiral line which seemed to be on the planchet prior to striking. The helical line was asserted to be have been applied by an automatic crosscut lathe."

3. "Two of the arbitrators informally agreed that the piece under review was a forgery but the third would not agree. All three arbitrators finally agreed in 1967 that the coin was not a "proof" as stated on the invoice".

4. "Many years passed before the forgery issue arose again. Some of those asserting forgery included Fuld, Bressett, J. P. Martin, Buttrey, Kleeberg, and Dannreuther. Others continued to urge genuineness. There were several vigorous debates and extensive publications. When the identical dents were noticed about 1994 on all known "Franklin Hoard" $20 USAOG pieces the diagnosis of forgery seemed reconfirmed. Then at the 2008 Baltimore session the prototype piece for the forgeries (containing the same dents and with 164 reeds on the edge) was presented, having been located by a member of Don Kagin's firm. A span of over 40 years was needed to produce general acceptance of forgery of "Franklin Hoard" $20 USAOG pieces."

Don Kagin said that, "Our next project will probably be another subset of .Ford discovered. issues ... USAOG coinage and ingots. As you know Ford, who was one of my advisors for my Pioneer book, could be very persuasive and most of us including Harvey Stack, Dave Bowers, my father and I believed most of what he said. Others, like Walter Breen, I now conclude, while having issues with John, feared him."

Note 1: see the paper Western Precious Metal Ingots: the Good, the Bad & the Ugly Aug. 2003, by Fred Holabird, Bob Evans & Dave Fitch.

Note 2: Kleeberg and Buttrey's site on the "False Western Bars" etc. does not appear to be currently accessable but Kleeburg has a pdf document covering similar ground. For those still wishing to consult Kleeberg and Buttrey's "How the West was Faked" Google this title and click on the Google cache rather than the website.

[Sources: PCGS, Kagins Inc., E-Sylum]

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The above photographs show a 2007 dated counterfeit one-pound coin found in Shepherd's Bush Market, London, in August 2009. The coin had the correct alignment and weighed 9.295g.

 

 

 

This video, showing Professor Colin Gagg of Britain's Open University talking about counterfeit one-pound coins, was posted on YouTube in 2009.

The British Treasury posted a number of documents onto their website in January 2010 in response to a "Freedom of Information" request by an unknown party. The documents consist of a thirty-page narrative group of minutes and memos from November 2008 to May 2009. Also posted were the last three of the Royal Mint's reports of their six-monthly surveys on the number of counterfeit one-pound coins found in circulation. Individual names and the names of propriety instruments and equipment have been hidden in the documents. However apart from this, they presumably present all the documented information concerning the counterfeit one-pound coin problem involving HM Treasury over this period. It is usual to exempt advice to ministers in such cases.

The first narrative group document is the minutes of a meeting between HM Treasury and the Royal Mint, APAC (the group representing banks, cash centres etc.) and SOCA (the Serious Crime Agency) on the sixth November 2008. The meeting chairperson opened the meeting by stating that it was, "the first opportunity that all parties had met to discuss the issue". The meeting chairperson also advised that, "the issue of counterfeits had achieved" (a) "level of political significance and the Treasury Minister had been briefed accordingly." For those wondering what had caused this "level of political significance" they should remember that on 22nd September 2008 Ben Ando's BBC News report was broadcast and subsequently picked-up by most of the British media. So although the problem of one-pound coin counterfeiting had been becoming more and more serious since 2002 it was only after it became a major news story that HM Treasury felt the need to rouse itself.

For the record these documents tabulate all the results of the Royal Mint's surveys of the number of counterfeit one-pound coins in circulation.

Survey Date	Percentage counterfeits found
November 2002	0.92%
November 2003	0.92%
November 2004	0.98%
November 2005	1.26%
May 2006	1.46%
November 2006	1.69%
May 2007	1.96%
November 2007	2.06%
May 2008	2.23%
November 2008	2.58%
May 2009	2.52%

These documents also record the annual number of counterfeit one-pound coins withdrawn and sent to the Royal Mint for destruction. It is obvious that in 2008-2009 the banks and cash handlers suddenly awoke to the need to start removing more of the counterfeit coins from circulation. The documents appear to imply that this increase came with a problem of increasing numbers of genuine coins being wrongly identified as counterfeit.

Year	Number of counterfeits withdrawn
2003-2004	85,500
2004-2005	117,500
2005-2006	84,500
2006-2007	153,800
2007-2008	97,000
2008-2009	891,956

The documents show that only about ten percent of the one-pound coins passing through the cash centres were authenticated in automatic machines. These machines were only identifying about thirty percent of the counterfeit coins they examine. There did not appear to be much confidence that this figure could be increased with the current technology. APACS which has now renamed itself the Payments Council said in a letter they sent to HM Treasury on the 27th November 2008 that, "..the unpalable fact is that good quality counterfeits cannot be identified by machine". The Royal Mint in a briefing paper to HM Treasury admitted that full authentication by the current machines would, "..reduce the counterfeit level to around two percent." This estimate seems to ignore the future input of further "good quality counterfeits" into the system.

Other points from the documents include:

• In November 2008 SOCA, "..estimated that currently there is only one major group of counterfeiters in operation."
• SOCA also stated, "Counterfeits are usually distributed in bulk at supermarkets or laundered through legitimate accounts or over time, through small businesses."
• HM Treasury is of the opinion that the Banking industry etc. has a responsiblity not to pass on counterfeit coins under the Counterfeiting and Currency Act. This appears to be disputed by the Payment Council.
• HM Treasury authorised the payment of up to £50,000 to non-Payment Council members to cover the cost of transportation of any counterfeit coins found to the Royal Mint for destruction. It would appear financial arrangements already existed for Payment Council members.
• The Royal Mint was of the opinion that the measures planned: new literature, training courses for cash handlers, a hopeful increase in the counterfeit withdrawals by the cash handlers, increased activity by SOCA etc. "..should reduce the high profile nature of the problem for the time being."

Another six months news on one-pound counterfeiting

August 2009 to January 2010 provided news of many developments in the UK's counterfeit one-pound problem. This news seemed to vary from the serious through the frivolous to the farcical.

In September 2009 the operator of the Mersey Tunnels, Merseytravel, announced that £86,000 of counterfeit one-pound coins had been passed in their tollbooths in the previous six-months. A spokesman said that the counterfeits, "were detected by sophisticated electronic equipment in the cash collection system." It is believed this equipment was used after the counterfeit coins had been accepted by the operator.

Police forces in a number of areas of the UK issued warnings about high levels of counterfeit one-pound coins circulating. These areas included Lancashire, the Isle of Man and Ulster. An initial police warning in Ulster caused chaos when the counterfeits were identified as being bright and shiny and with no beads around the rim. This resulted in many shops and customers refusing to accept the genuine 2008/9 Matthew Dent designed one-pound coins. These, of course, are bright and shiny and have no beads around the the rim. It required the Royal Mint to issued a clarifying statement to prevent this farce deteriorating further. A BBC Northern Ireland news story and video covers this very well.

Court cases

In December 2009 two cases involving the manufacture of counterfeit one-pound coin came to court. The first case at Maidstone involved an illegal mint found in Kent. A 49-year old man pleaded guilty to two charges of making counterfeit £1 coins, and having counterfeiting materials. His uncle was found not guilty and the jury could not reach a verdict on his father. There is likely to be a retrial of the 70-year-old father. £8,000 of struck counterfeit coins were found at this mint along with 14,000 coinage blanks.

In the second case, Yasin Patel, 45, of Blackburn, pleaded guilty at Sheffield Crown Court to three charges of conspiracy to supply counterfeit currency. The case involved both counterfeit banknotes and coins. Patel was accused of being part of the gang supplying the north-west of England with counterfeit bank notes obtained from London. He was also accused of manufacturing one and two-pound counterfeit coins. He supposedly melted metal on a stove and cast it into molds to produce the counterfeit coins. He then used electroplating equipment to coat the counterfeits. 6,000 counterfeit one-pound coins were seized. Mr. Patel's sentencing was deferred. He had previously been part of the so called "Heckmondwicke counterfeiting case" in 2000.

Miscellaneous

Coin handling equipment company, Willings Services Ltd, have posted on to the web a catalogue of the counterfeit one-pound coins they have identified.

"Brian" has started a FaceBook site calling for a boycott of one-pound coins because of the counterfeiting problem. He aims to get two million members for the group but at the time this newsletter was being published only 130 people had signed up for the group. CCN shares "Brian's" concerns but does not agree with his proposed solution.

Also see the November entry in the Diary section.

[Sources: HM Treasury, BBC News, Click Liverpool, Wirral News, Newry Democrat, Belfast Telegraph, Kent On-line, This is Kent, Blackburn Citizen, Willings, YouTube, Facebook]

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Countries that in recent times have needed to change their currency due to coin counterfeiting

In one of the briefing papers referred to in the report above on one-pound coin counterfeiting, the Royal Mint gave a brief summary of countries that had recently had to make changes in their currency because of coin counterfeiting. They said:

"There is no industry standard as to the number of counterfeits to warrant a recoinage. In 2002 both Jordan (1 dinar) and Hong Kong ($10) decided to issue banknotes when the counterfeit levels of the coins steadily increased towards five percent. South Africa decided to upgrade their 5 rand coin in 2004 at a lower level. Malaysia withdrew their one dollar coin in favour of a note in 2005. Whereas informal discussions with overseas Issuing Authorities indicate the maximum acceptable percentage is five percent, the countries listed earlier took action at a lower level."

An altered Canadian 1942 "filled die type error" 1 cent surfaces

Canadian collector, Peter Preston, sent details of an error coin he bought on eBay. The error was a supposedly 1942 coin having been produced with a 1912 date due to a manufacturing mishap. When Peter received the coin in-hand he posted images on to the discussion forum at http://www.canadiancoin.com/. The contributors soon expressed disquiet was about the coin. This caused Peter to get his local coin dealer to check it under a digital microscope. The opinion was that the coin had been altered from a standard 1942 one cent. Happily, Peter was able to return the coin and get a refund.

Peter also added that Canadian collectors still have problems with copy or counterfeit tokens especially Hudsons Bay Company tokens.

Donn Pearlman has sent to CCN details from NGC and PCGS of counterfeit and altered USA coins they have recently identified.

Firstly from NGC are photographs of two counterfeits sold on-line

A photograph of the obverse side of a fake USA 1916-D dime.
Photo credit: Numismatic Guaranty Corporation.

A photograph of the reverse side of a fake USA 1916-D dime.
Photo credit: Numismatic Guaranty Corporation.

A photograph of the obverse side of a fake USA 1915-D gold Half Eagle.
No Denver Half Eagles were produced in 1915.
Photo credit: Numismatic Guaranty Corporation.

A photograph of the reverse side of a fake USA 1915-D gold Half Eagle.
Photo credit: Numismatic Guaranty Corporation.