A very unpleasant experience

SYRACUSIAN

A couple of weeks ago, a very reputable European firm held an auction with many impressive lots as usual. I was particularly interested in one coin, an extremely rare Greek 1851 5 drs that looked as toned choice unc from the picture.A one year type crown sized coin and therefore very important for my collection, it usually shows up in F-VF conditions ,often cleaned or mishandled in some way. Even those coins manage to achieve $2000-$3000, because many collectors are determined to fill up the empty spot regardless of condition.The description was Von großer Seltenheit. Prachtexemplar. Herrliche Patina, fast Stempelglanz ,which I suppose means "of the highest rarity, superb example, nicely toned, about uncirculated", but as we all know, German auction houses often undergrade their coins, my own grade was somewhere between MS62-63 judging from the photo.





My personal estimate for it was around $15000. Although I was truly interested in it, I have lately become extremely reluctant to pay small fortunes for one single coin, so I could not make up my mind. For a coin of this caliber, it is always worth being present at the auction, or if this is impossible, having an experienced agent examine the coin on site and bid accordingly for a small commission. I finally decided not to bid on it, and one of the reasons was that my own trustworthy agent was not going to attend. Another reason was that I had heard rumours that this was an artificially toned coin.

The coin was bought by a fellow collector,at around $12800 plus the commission of the agent that was on site,a self appointed expert whom I despise and don't trust. It did not take long before the truth was uncovered. The consignor had previously sold this coin to another collector who sent it to NGC but it came back BBed ,not as AT but as a FAKE! A second submission to NGC produced the exact same results. Finally, the coin was submitted to ANA's authentication bureau and two months later the report was ,FAKE,FORGERY, MINTED IN MILAN, ITALY, 1960, FROM ILLEGAL DIES, RETONED. Obviously the first buyer returned the coin and then the owner consigned it to this German auction house. When the previous buyer saw it among the lots, he emailed the German firm telling them that it was a fake and that it should be withdrawn. After ignoring the first couple of emails, the firm finally responded that if the coin was indeed a fake they would honour the buyer's return privilege.

I don't know how the innocent,inexperienced and unfortunate buyer will deal with this, I just wouldn't want to be in his shoes. The German firm does not accept returns if the coin was bought on site, even if the buyer was acting as an agent for a third party. The only exception to this is if the coin is proved to be non authentic, but the old ANA documents will not be accepted as they could have been issued for a different coin,so the buyer needs to produce new ,fresh documents that the coin is a fake. In anycase, the hefty comission of the "expert" will not be refunded, that's for sure.Let's note here, that these agents, usually dealers, benefit from a professional discount,they do not pay the full 22%, so they already make a profit from this,especially at these levels. My own agent does not charge any extras because of this discount.

If there's any lesson to be learned here for me, is to stay away from very expensive raw coins. Frankly, I doubt that I would have been able to detect that it's a forgery, I could have seen the AT, reason enough not to bid on it, but the forgery is an entirely different ballgame. And this is why I cherish TPG services and feel that they provide an invaluable service to the collector.

cosmicdebris

SOunds like a firm I would not want to do business with. Care to name them?

SYRACUSIAN

Well, it's not very difficult to find out which firm i'm talking about, I have used their own photo.

cosmicdebris

Got it lot 1958 in the 104-106 auction.

SYRACUSIAN

I would like to clarify that this is not a post against this particular auction firm from which I have bought very nice coins in the past. I want to believe that the buyer will act swiftly, submit the coin to NGC or PCGS and use their verdict as a proof to get a refund and that the firm will honour their guarantee. I'm afraid that the ANA takes too long and by the time they issue a new report the time limit will have expired. This was more a post to think about this case,this is a real story that could have happened to any of us and reflect on the role of all these intermediary agents and self appointed experts. What more can be done to make people sick of coin collecting ,discourage them and drive them out of the hobby forever?

I'm saying this because now that the story about the forgery is out, nobody denies the artificial toning, including the agent, it's a minor offense compared to the fake. But what if it was not a fake and the coin would have still gotten a BB due to its AT? What refund would we be talking about?

Preussen

Dimitri:
Wow, that's an incredibly sad story; not only for your friend (or fellow collector), but also for the hobby. I never would have expected this particular auction firm to proceed in selling a known fake. I too have bought many nice raw coins at their auctions, both with and without benefit of an onsite agent.

Perhaps the firm disagreed that the coin was fake, or even AT. From looking at the pics, I'm sure it would have fooled many "experts." I certainly hope a full refund is obtained. I agree a refund should also be issued in the case of a genuine but AT coin, but I have no idea how that would have been handled. I also agree the TPG services are extremely helpful, but has no fake coin ever slipped through and gotten slabbed?

This almost makes me glad I cannot afford to buy such expensive coins. - Preussen

wybrit

I agree that TPGs do provide a valuable service for this purpose (as well as for screening out cleaned coins, especially useful for mail order and internet transactions). They really can help drive fakes out of the market. This provides some level of protection for buyer and seller, although TPGs are certainly not infallible.

coinkat

great thread a worthy of A DOPTD Award. Congrats. I think that may be number 3 for you? Thanks for sharing the story. I think this is the type of information that is shared that makes this forum what it is. Well done...

I know it is not a typical plug for TPG, but with World rarities that in fact may be tougher than previously thought, it helps with both grading and authenticity.

ajaan

<< <i>TPG services are extremely helpful, but has no fake coin ever slipped through and gotten slabbed? >>


True, but any honorable TPG will buy back any fake coin in their holder.

What really sucks is the buyer is out 10%? ($1200) given to the agent who represented him at the auction.

newsman

I wonder what the slab-haters will have to say about this ...

Aethelred

Fakes have slipped past the major grading services, but not often. One example is the micro-O Morgan Dollars, PCGS was quick to admit the coins were fake and offer to buy them. In all, the major services offer a service that is of great value in cases like the one Dimitri talks about.

oldshep

Very interesting and informative post Dimitri!!! Sad story but one that needed to be shared.
Shep

coinpictures

Ergf. Sounds like the original owner was doing everything in his/her power to avoid being stuck holding the bag, by resubmitting so many times. At what point does that crack-out-and-submit process turn into "knowingly committing fraud?"

This is one of the reasons I rarely buy coins over $100 that aren't slabbed. Too much of a risk.

About 7 years back I bought I beautiful 1870s (I forget the date) Italian 5 Lire piece. It was a nice UNC that looked and weighed legit. It came back bodybagged as a fake. Both the dealer and I were shocked by it. The dealer made good on the coin, but we were both shaking our heads. He ended up putting it in his collection of counterfeits; he's accumulated a nice "reference collection" over the years, ranging from ancients to the current range of phoney Chinese crown-sized pieces that are all over the place.

1jester

I'm saddened by the whole proceedings.

The auction house does indeed have blood on its hands; they were fore-warned and chose to ignore the warnings. Furthermore, they won't honor a return, or at least they will do everything possible to avoid their responsibility to do so. I can just see them saying that the new TPG bodybag "isn't sufficient; therefore we won't pay...", and what's stopping them? How on earth can someone prove that a slip of paper goes with any particular coin? They can always say that the bodybag slip doesn't pertain to the coin sold at auction. Just watch. The auction house should be held liable in court for selling a known counterfeit, but I don't see that happening given that legal climate.

The middleman should also be taken to court and fined as well.



PS: All this is no reason to avoid raw, expensive coins. Most goodies are still sold that way. However, if this kind of shenanigans continues to take place, it will give rise to more people demanding slabs before they buy.

SYRACUSIAN

The middleman should also be taken to court and fined as well.





In a perfect world, yes. I've also dealt with such people, maybe I was luckier, sometimes they might sell you a good coin too. I guess they're the equivalent of what Legend calls in the US coin forum,the wannabe dealers. Like Jester noticed and as this is still a current case many things might still happen, I promise to keep this thread updated. But it really comes down to whom I can trust? The coin might have escaped the firm expert, migh even escape the TPGs sometimes, although more rarely. A slab and numerical grade confirms the value of a coin, noone denies that. I can certainly not trust these wannabe guys, without a shop and rent and bills to pay, not exactly making a living out of coins, but interfering especially at these high levels. What are they there for? My own agent is the biggest coin dealer in town.



edited to add that I didn't add the last sentence to sound pompous. He is simply more honest, and most importantly, he will stand by his coins, he will accept returns and refunds and won't try to rip you off.

MacCrimmon

<< <i>....FAKE, FORGERY, MINTED IN MILAN, ITALY, 1960, FROM ILLEGAL DIES, RETONED. >>


Obviously, with this description, this particular fake has a well known history. The TPGs probably have the most extensive compendiums of counterfeit data anywhere, and actual experience ferreting out their key diagnostics.

This probably comes from the same shop(s) in Milan where the UK sovereign forgeries were being manufacted back in the 1950-60s.

SYRACUSIAN

Mac, you're probably right. I'm so disgusted by this story that I haven't yet fell the need to email friends to hear if there were any news, but I will do it soon. Another detail I didn't mention, is that there was a second agent intervening, this one didn't even go on site.I don't know why his presence was needed, maybe the bidder did not know the other agent in person, or he felt more secure with someone he knew better. A surprising chain of middlemen, for what otherwise seems like a simple bid that could have been placed through the internet. But of course the agent's job is to confirm that the coin is as described or not,otherwise the buyer takes the decision and responsibility to attend on his own and examine the coin by himself,a round trip to Germany is well worth the fees.

In anycase, if the coin is indeed a fake and this is reconfirmed by a TPG, it maybe facilitates everybody's role. A genuine but artificially toned coin would not have been accepted by the firm and there would be no question of refund. And I have reasons to believe that the agent spotted at least the AT but went ahead with the purchase.

SYRACUSIAN

I promised to update this. I talked with the NGC rep on the phone today and he told me that NGC confirmed once again the already known fact: fake. The question now is if the buyer is willing to start procedures to get his money back, first from the firm, then from the agents. His job is head of a private security team, a big guy,I think he should be more agressive to these people.I would have started by shaking the agents upside down, until I get my money. But I wouldn't be surprised if he decides to do nothing and just keep this coin. Strange world.

MrEureka

If there's any lesson to be learned here for me, is to stay away from very expensive raw coins.

I disagree. The lesson should be that one needs to choose an agent very carefully.

SYRACUSIAN

You're right Andy. I just reread this thread as it's already one month old, and I see that all my rage is towards these self appointed experts and agents. This is what everything is about, whom are we dealing with, not the raw or slabbed argument. If you want to build a nice collection, or even buy some nice pieces, you'd better hook up with the right people.

Conder101

<< <i>I'm afraid that the ANA takes too long and by the time they issue a new report the time limit will have expired. >>


The ANA no longer has an authentication service. It folded three years ago.

SYRACUSIAN

So this means that if ANA issued a report for this coin, it's already three years old at least. Which says what Mac said: the coin has a long bad history and many people knew about it as I later found out. And yet it appeared at auctions of at least two more European auction firms before this last one.

Also, if ANA no longer issues certificates, the TPG services' verdict becomes even more important. In this case,I know that the coin has been seen again and again by well known US and Greek experts residing in the US ,before NGC gave a verdict.

shirohniichan

I'm saddened by the whole proceedings.

The auction house does indeed have blood on its hands; they were fore-warned and chose to ignore the warnings. Furthermore, they won't honor a return, or at least they will do everything possible to avoid their responsibility to do so. I can just see them saying that the new TPG bodybag "isn't sufficient; therefore we won't pay...", and what's stopping them? How on earth can someone prove that a slip of paper goes with any particular coin? They can always say that the bodybag slip doesn't pertain to the coin sold at auction. Just watch. The auction house should be held liable in court for selling a known counterfeit, but I don't see that happening given that legal climate.

The middleman should also be taken to court and fined as well.


Yea, verily. It looks like fraud to me on a number of levels. I'm glad to hear you weren't burned on this one.

docday2003

very ugly story...and I'm afraid that fraud happens in this business all too frequently, but usually on a smaller scale, and to the unwitting.

SYRACUSIAN

I saw NGC's dreadful letter today. I did not ask to keep a copy of it, so this is what I remember:

"Dear Mr XXXX,

I'm afraid that this coin presents some very troubling characteristics. The weight of this type of coin is approx 22.68 gr, (? not sure if I remember this number correctly) and this one is 22.00 grams. The edge reeding is unevenly spaced and at various points fades away completely. The number 8 in the date has been tooled. The lettering on both sides is double struck and presents various anomalies, some letters are not well struck or parts of them are missing. Some devices are not very sharp, and some others have an artificial frosty appearance which is in contrast with the coin's condition. The spaces between the lettering is also uneven but mostly different from other coins of this type and year......
.......

For these reasons we believe that it is not a genuine Greek 1851 5 drachmai coin.

Sincerely YYYYYYY"

This document ,dated 10/20/05 was signed by an NGC grader, I believe the director of their World service and vice president of the company, personally addressed to their Greek representative who submitted the coin.



And yet the new owner still believes his agent who tells him that HE guarantees that the coin is authentic. Also, like Jester predicted, the auction firm is not recognizing NGC's verdict as a proof. I won't comment on it, and this was my last post in this horrible story.

Shiroh, thanks for your comment, it means a lot to me.

crito

very scary story. maybe there's a future for darkside slabs after all.