Poll: Would you consider this action criminal fraud?
K6AZ
Posts: 9,295 ✭
This actually happend about 18 months ago, and it's documented. A seller on eBay who also runs their own certification service bought a PCGS AU55 1934-S Peace Dollar for just under $800. Three weeks later it turned up in one of his slabs as a MS63 on eBay, where it sold for $3000. Would you consider this seller criminally responsible?
Edited to add the grade on his holder, but most surmised it was a 63.
Edited to add the grade on his holder, but most surmised it was a 63.
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Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>This actually happend about 18 months ago, and it's documented. A seller on eBay who also runs their own certification service bought a PCGS AU55 1934-S Peace Dollar for just under $800. Three weeks later it turned up in one of his slabs on eBay, where it sold for $3000. Would you consider this seller criminally responsible? >>
Definitely!!!
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
BST successful dealings with:MsMorrisine, goldman86
<< <i>Well, I know Russ would never work on such tight margins... >>
I lose money on every sale, but try to make up for it in volume.
Russ, NCNE
<< <i>No fraud, no different then upgrading an NGC to PCGS and selling for a profit. "Let the buyer beware". >>
Actually, it is different since Eric points out the slab "company" is the same as the seller. The person does both.
So, there is conflict of interest and deception
I've been told I tolerate fools poorly...that may explain things if I have a problem with you. Current ebay items - Nothing at the moment
<< <i>No fraud, no different then upgrading an NGC to PCGS and selling for a profit. "Let the buyer beware". >>
But he did his own upgrading!!
Nothing wrong with your statement. I agree with you that if you can do it your way then so be it as long as you do it legitimately.
<< <i>I buy a PCGS 55 coin for $500, crack it out, put it in a home made slab, grade it 63, put it on ebay, stating all the facts, also stating that I disagree with PCGS , and that's why I give it a 63. It ends up selling for $3000. Am I criminally responsible? >>
You certainly are if you claim the coin was independantly graded by a "third party" grading service, when in reality, you slapped the MS63 on the label.
<< <i>
<< <i>I buy a PCGS 55 coin for $500, crack it out, put it in a home made slab, grade it 63, put it on ebay, stating all the facts, also stating that I disagree with PCGS , and that's why I give it a 63. It ends up selling for $3000. Am I criminally responsible? >>
You certainly are if you claim the coin was independantly graded by a "third party" grading service, when in reality, you slapped the MS63 on the label. >>
But I wouldn't claim that.
<< <i>I buy a PCGS 55 coin for $500, crack it out, put it in a home made slab, grade it 63, put it on ebay, stating all the facts, also stating that I disagree with PCGS , and that's why I give it a 63. It ends up selling for $3000. Am I criminally responsible? >>
Exactly. What crime has been commited? Coin grading is purely subjective with no LEGAL basis, standards or requirements.
When does an opinion become a crime? Here's another thought...
By removing the seller as the responsible party....
When you send a (enter third world TPG service here) MS66 slabbed coin to PCGS for a crossover and it comes back in a MS62 slab, should PCGS be held criminally responsible for reducing the value of that coin?
Fraud either way IMO. I think a criminal case would be stronger if it were a recognized TPG.
collections: Maryland related coins & exonumia, 7070 Type set, and Video Arcade Tokens.
The Low Budget Y2K Registry Set
<< <i>Exactly. What crime has been commited? Coin grading is purely subjective with no LEGAL basis, standards or requirements. >>
You're wrong. See:
US vs. Kayne
Representing yourself as an independent and authoritative tpg. Yes.
Stating your opinion (as ER states above), and that you disagree with PCGS' assessment. No.
To imply that your opinion as to grade carries some sort of "industry acknowledged" weight by self-slabbing is outright criminal, especially if your "opinion" is backed up by no form of warranty or guarantee. That is the fundamental difference between the majors and all the "lesser" tpg's. Grading standards, service, price, quality of product and everything else aside, PCGS and NGC put their money on the line if they are proven wrong. Try getting that, in writing or otherwise, from the (services we all know he's referring to
CG
<< <i>You keep trying to go off track. I'm not talking about a one point MS difference. I'm talking about a coin that has obvious wear (AU55) being broken out of the PCGS holder, then this seller grading the coin as a MS63 and putting it in his plastic, then offering it on eBay and claiming that the holder it is now in is a "third party" grading service. >>
That is the point that matters here. The implication that your opinion is authoritative and accurate according to accepted industry standard.
I voted yes because of this particular instance given the scenario as presented.
I believe it (the grade/grader) was intended to deceive (the public)
What does the coin actually grade?
Fraud? probably not. But it appears unethical as he!!. But then again so does David Hall's relationship with DHRC and PCGS.
Why does everyone just assume that if PCGS graded the coin AU55 that it is more accurate than MS63. We constantly argue on the board whether a coin is low grade MS vs. AU.
<< <i> And to make matters worse it was graded by a guy whose only 23 years old. >>
Would that statement apply to PCGS as well?!?!
Directly from Homerunhall's fingertips...
I believe grading talent is not dependent on age, though the older graders certainly have more experience. Ryan Carroll of Heritage is a world class grader and I think he's 23 or 24. Michael Wriethe of our grading staff is an absolutely world class grader and I think he's 25 or so.
See it here.
<< <i>according to accepted industry standard. >>
What accepted industry standard? Who sets that? Does PCI grade to the same standard as PCGS? Does NGC? Read all of the threads here about how NGC is a point or half a ponit etc looser on grading certain series. Does that make PCI and NGC criminal enterprises that put coins on the market that would garner a lower grade at PCGS? What about the belief in "grade flation" that says that a 66 today is yesterday's 65. Oh, so maybe the standard keeps shifting around. Now what?
Edited to add: What is missing in Eric's poll is a relationship between the seller and buyer that makes the seller a fiduciary.
CG
<< <i>
<< <i>according to accepted industry standard. >>
What accepted industry standard? Who sets that? Does PCI grade to the same standard as PCGS? Does NGC? Read all of the threads here about how NGC is a point or half a ponit etc looser on grading certain series. Does that make PCI and NGC criminal enterprises that put coins on the market that would garner a lower grade at PCGS? What about the belief in "grade flation" that says that a 66 today is yesterday's 65. Oh, so maybe the standard keeps shifting around. Now what?
CG >>
I don't know. Honestly.
But, as my own judgement call only, I place more credibilty on those who back it up with a guarantee. If said coin is found to be grossly over graded, or counterfeit, or "messed with", PCGS will cut me a check. That means something to me, and apparently quite a few others. I am more inclined to pay money for coins in NGC and PCGS slabs, as are many others, because they have set a standard that others find acceptable. Does the standard shift some? Certainly, it's still a subjective issue. But on average, it's held up well enough that, as a whole, coins in their slabs command higher prices, and most others trade at a discount.
<< <i>Why does everyone just assume that if PCGS graded the coin AU55 that it is more accurate than MS63. We constantly argue on the board whether a coin is low grade MS vs. AU >>
While I've seen a lot of PCGS AU58s that could be argued this way, I've never seen a 55 that did not have wear, in other words a 55 that looked MS.
<< <i>While I've seen a lot of PCGS AU58s that could be argued this way, >>
But the differnce in value between Au58 and MS63 can be huge. That is why I don't like the idea of people flippantly calling for criminal prosecution of coin sellers. Sure there are a lot of sleeze bags and rip off artists. But there are also consumer protection laws that have civlil remedies such as monetary penalties and injunctions. Criminal prosecution is a very different matter.
CG
Obviously one could not pass off a G06 as MS65. But in the higher grades say AU50 and up it gets real murky. How does one tell the difference between a high grade MS65 and a low grade MS66? The cost (value) difference can be significant and run into the hundreds of thousands of dollars - just look at the PCGS price data for a 1895-O Morgan dollar in MS65 and MS66. In the ANA grading standards book the definition of an MS65 Morgan dollar reads (under Contact Marks) “Light and Scattered without major distracting marks in prime focal areas”. For the MS66 Morgan under contact marks it reads “several small; a few may be in prime focal areas”. What is the difference between "light and scattered" and "several small"? The standards list four parameters to be used when grading Morgan dollars and each category is equally arbitrary and open to interpretation. Under “Eye Appeal” the standards are “very pleasing” for MS65 and “above average” for MS66. If I am the seller the eye appeal is way above average - if I'm the buyer the eye appeal is "looks good, about average for an MS65".
I believe these are mostly worthless standards. Phases like "very pleasing", "several small", "light and scattered" are worthless when it comes to describing something that may mean paying or saving $100,000. The alternative is to depend on the experience of an "expert" to tell you - "yeah, that one really is an MS66". Then you try to sell it and another "expert" tells you "well, that one is really an MS65".
Until the coin industry wakes up and develops meaningful, measurable, and repeatable standards for coin grading it's going to continue to be every man for himself. And the same coin can be graded AU58 by one expert and MS66 by another, and you can argue, and piss, and moan, but there is nothing to go by but opinions.
<< <i>
<< <i>Well, I know Russ would never work on such tight margins... >>
I lose money on every sale, but try to make up for it in volume.
Russ, NCNE >>
<< <i>
<< <i>While I've seen a lot of PCGS AU58s that could be argued this way, >>
But the differnce in value between Au58 and MS63 can be huge. That is why I don't like the idea of people flippantly calling for criminal prosecution of coin sellers. Sure there are a lot of sleeze bags and rip off artists. But there are also consumer protection laws that have civlil remedies such as monetary penalties and injunctions. Criminal prosecution is a very different matter.
CG >>
Well, in another thread I posted about Armand DeAngelis who ripped off dozens of people to the tune of $5 million and you didn't think any laws were broken there either. Fortunately for the hobby a couple of US Attornies thought otherwise.
Fraud in numismatics is out of control, and it's about time federal law enforcement stepped in. I did not post these threads by accident. There will be a major development shortly that should put all the fraudsters in our hobby on notice.
<< <i>.........
Obviously one could not pass off a G06 as MS65............ >>
You'll never know how the human brain operates a few hundred years from now.
Well this is a legal question that can go both ways and would need to be brought to a court to adjudicate.
Such as; as you say a seller on eBay who also runs their own certification service bought a PCGS AU55 1934-S Peace Dollar for just under $800. Three weeks later it turned up in one of his slabs as a MS63 on eBay, where it sold for $3000. Questions need to be asked and intent needs to be established. It could be unethical and/or illegal.
Such as:
1. Who graded the coin?
2. What policy does the grading service have when grading coins?
3. Did the buyer slab the coin himself?
4. Is there a conspiracy at the grading service?
These are a few questions that need to be asked; and hard to prove without a lawsuit or the DA taking action. If the grading company is a legal recognized company in a state; then that company falls under the laws of that state.
On the other hand; If I buy a coin and put it in my own slab such as “Joe’s Slab” and graded it MS-63 and you buy it. Well you are out of luck ;;;;; Buyer beware.
<< <i>you didn't think any laws were broken there either >>
Once again you have totally misrepresented my statements in the other thread. I guess you should go to jail for that.
I said in the other thread that I had no opinion about that guy's guilt. I also asked repeatedly for you or anyone else to point to facts disclosed in the newspaper article you posted that indicated that any crime was committed. All the article said was that he sold gold tyype sets having a face value of $37.50 for $3,500. In the world of coins the face value is not relevant. The journalist used the face value to mislead the readers as to the disparity between the price paid and the market value of the coins. According to the "victim" whose webcite you linked, the coins were worth about a third of what he paid--or more than $1,000. But the article said nothing about the real value, condition or anything else.
CG
collections: Maryland related coins & exonumia, 7070 Type set, and Video Arcade Tokens.
The Low Budget Y2K Registry Set
Perhaps the solution to the grading irregularities would be to resort back to a single uncirculated grade instead of the 11 we now use. And actually, with NGC using a star to indicate premium quality, and all grading companies using some form of PL and DMPL, it would seem that there are actually about 44 possible uncirculated grades... all based on opinion.
This case is vey similiar to selling used cars that were wrecked as not previusly wrecked, and somewhat similiar to lemon laws.
In this case, going from circulated to uncirculated with the intent to misrepresent is fraud. going from MS62 to MS63 or 4, may just be a judgement call.
Is there a timetable for this development?
<< <i>To me the scenario should be illegal and criminal. Whether our current justice system would convict someone of this is another matter. >>
Neil, there are laws on the books that cover this. See the thread about Armand DeAngelis, and also US vs. Kayne that I posted to that thread.
<< <i>There will be a major development shortly that should put all the fraudsters in our hobby on notice.
Is there a timetable for this development? >>
I can't say more than I already have. Just keep an eye out.
It's a scummy thing to do no matter what; whether or not it rises to criminal fraud is a tough call and depends on whether or not the perpetrators (a) knowingly overgraded coins for (b) personal gain.
<< <i>Wouldn't it depend upon what you claim "your TPG" ms63 actually stands for? Sounds like a familiar ploy eh? >>
If you are going to use the ANA designated grade then you should grade to that standard. Why would anyone say that their ms63 really means ANA or Sheldon 61.