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Lost in the Seat Cushions (WSJ article)

CatbertCatbert Posts: 6,549 ✭✭✭✭✭
The quarter stuck to the blob of gum in the ashtray, the dime wedged between the driver’s seat cushions, these are the coins of Ronnie Shahar’s realm.



The U.S. ships hundreds of thousands of tons of scrap to China each year, much of it comprising the aluminum remains of broken-down vehicles that have been fed through industrial shredders. The scrap is so laden with coins, many of them battered beyond recognition, that a new industry has emerged to reclaim and repatriate them.



Mr. Shahar, a 46 year old entrepreneur, was among the first to realize the potential in pocket change more than 25 years ago. Today, he buys U.S. coins in bulk from Chinese salvage yards and exports them to his Oregon based partner, who exchanges the coins at the U.S. Mint for a lump sum.



The Mint redeems coins that are bent, burned, fused, chipped or otherwise uncountable by machine at nearly their face value, under a program established more than a century ago.



The program has paid out more than $100 million since 2009, the year customs officials in Los Angeles noted a sharp increase in large coin shipments from China. The uptick was so sharp that federal law enforcement officials have come to believe some of the dimes, quarters and half dollars arriving from the Far East are fakes.



Mr. Shahar’s business was thriving until U.S. officials shut down the coin reimbursement program last year, detaining about $664,000 worth of his and his business partner’s coins, according to a lawsuit he filed earlier this year asking a judge to release them.



While Mr. Shahar hasn’t been accused of wrongdoing, federal prosecutors have alleged three of his competitors imported counterfeit coins.



Mr. Shahar, an Australian, said U.S. officials have simply underestimated the amount of money Americans consign to the trash heap, he said. And anyway, he said, it would be folly to make fake coins of such low value.



“No one counterfeits small value coins,” said Mr. Shahar, who lives in Israel with his wife. “It doesn’t make any economic sense.”



A spokeswoman for the Justice Department declined to comment, as did a spokesman for the U.S. Mint.



Mr. Shahar said he discovered the coin trade while traveling in Thailand in 1989. During a tour of a temple, the 19-year-old Mr. Shahar spotted tourists flipping coins into a wishing well.



After the tour, the guide introduced him to a temple caretaker, who took him into a room filled with bags of coins sorted by country, Mr. Shahar recalled.



Mr. Shahar was headed to London and planned to return to Australia, via Thailand, in a month’s time. He and the caretaker made a deal. If Mr. Shahar agreed to take 6,000 one pound coins with him to the U.K., exchange them for cash and bring the money back to the temple, he could keep 900 pounds for himself.



“I thought, ‘This is something I could do so I could finance my travels,’ ” said Mr. Shahar.

He began buying coins from other temples across Asia, and then from charities, secondhand stores and metal recyclers.



These days, “he has contacts all around the world,” said Adam Youngs, who imports U.S. coins from Mr. Shahar through his company, Portland Mint.



Mr. Shahar said he has developed coin sources in 25 countries, but much of his business drifted to China, amid its rise as a global metal recycler, a $50 billion industry in China, according to research firm IBISWorld.



A vehicle donated or sold for scrap in the U.S. generally passes through a multimillion dollar shredder that reduces it to fist sized pieces of metal and plastic, according to Scott Horne, counsel for D.C. based Institute of Scrap Recycling Industries.



A conveyor system then sorts the pieces using technologies including electric currents, magnets and X ray and infrared, said Mr. Horne, leaving behind a hash of aluminum, known in the industry as zorba.



Inevitably, zorba is seeded with bits of other metals, including coins, which are too small for the systems to filter.



“The Chinese figured out that they could handpick this material very efficiently and very cost effectively and segregate it even better than the machines,” Mr. Horne said.



Mr. Horne recalled a visit a few years ago to a Chinese recycling plant, where he saw “a thousand women sitting there just picking like mad.” Each had a bucket for coins, he said.



Chinese recyclers sell coins retrieved from the scrap to people like Mr. Shahar for 20% to 30% less than face value, according to Mr. Shahar and others in his industry.



Under the U.S. Mint’s Mutilated Coin Redemption Program, established in 1911, the government pays a standard rate of $20 per pound for mutilated dimes, quarters and half dollars.



Bulk coins shipments are hauled to one of two foundries on contract with the government. They melt the metal down to be made into new coins.



The Mint halted the program in November after federal prosecutors accused coin importers America Naha Inc., Wealthy Max Ltd., and XRacer Sports Co. Ltd of trying to defraud the U.S. Mint with counterfeit coins.



The civil complaint, filed in federal court in Philadelphia, said tests of coins revealed the presence of silicon and aluminum, “two elements not found in authentic coins.”



Also the numbers didn’t add up, prosecutors wrote. Each vehicle exported to China as scrap would have had to contain an average of 746 coins or about $105 to account for the Mint’s reimbursements.



The government lab report, obtained by the companies, showed silicon and aluminum present only in trace amounts and that the control coins against which they were tested also contained trace amounts, according to Wealthy Max’s lawyers.



America Naha and Wealthy Max, which are contesting the lawsuit, said their coins are genuine. The government has ignored other sources of coins, such as old washing machines and vending machines, they said.



XRacer Sports agreed to settle the claims against it earlier this year without admitting wrongdoing, forfeiting $129,000 of the $220,000 the U.S. Mint owed it for mutilated coins. The company and its lawyers didn’t respond to requests for comment.



A federal judge is expected to weigh the remaining claims at a hearing in May.



Mr. Shahar, meanwhile, is waiting to cash in his detained coins and purchase thousands more that his suppliers have been piling up during the Mint program’s suspension.



“We essentially purchase scrap metal and return it to the country of origin,” he said. “It was a very good business before this issue occurred.”
"Got a flaming heart, can't get my fill"

Comments

  • TopographicOceansTopographicOceans Posts: 6,535 ✭✭✭✭
    Originally posted by: Catbert
    The program has paid out more than $100 million since 2009, the year customs officials in Los Angeles noted a sharp increase in large coin shipments from China. The uptick was so sharp that federal law enforcement officials have come to believe some of the dimes, quarters and half dollars arriving from the Far East are fakes.

    And anyway, he said, it would be folly to make fake coins of such low value.

    “No one counterfeits small value coins,” said Mr. Shahar, who lives in Israel with his wife. “It doesn’t make any economic sense.”




    Seems pretty profitable to me.
  • oih82w8oih82w8 Posts: 11,868 ✭✭✭✭✭
    Always cite your sources...sometimes there are images!



    http://www.wsj.com/articles/lo...pare-change-1461939253

    oih82w8 = Oh I Hate To Wait _defectus patientia_aka...Dr. Defecto - Curator of RMO's

    BST transactions: dbldie55, jayPem, 78saen, UltraHighRelief, nibanny, liefgold, FallGuy, lkeigwin, mbogoman, Sandman70gt, keets, joeykoins, ianrussell (@GC), EagleEye, ThePennyLady, GRANDAM, Ilikecolor, Gluggo, okiedude, Voyageur, LJenkins11, fastfreddie, ms70, pursuitofliberty, ZoidMeister,Coin Finder, GotTheBug...
  • CatbertCatbert Posts: 6,549 ✭✭✭✭✭
    Originally posted by: oih82w8

    Always cite your sources...sometimes there are images!



    http://www.wsj.com/articles/lo...pare-change-1461939253





    I usually do, but kept getting the infamous "error code 113". So, I did reference the WSJ in the thread title, but was doing all kinds of things to figure out how to get the darn article copy/pasted into this wonderful forum software. Deleting the link was one of the alterations I did (along with deleting hyphenated words), but have no idea if that was the reason behind the problem.



    "Got a flaming heart, can't get my fill"
  • LanceNewmanOCCLanceNewmanOCC Posts: 19,999 ✭✭✭✭✭
    Originally posted by: Catbert

    I usually do, but kept getting the infamous "error code 113".





    try copy/pasting just this



    wsj.com/articles/lost-in-the-seat-cushions-theres-100-million-in-spare-change-1461939253





    fwiw,



    there is a thread(s) in the archives talking about this subject . fwiw - if anyone wants to read more.



    Seems pretty profitable to me.




    amazes me how people cant wrap their mind around how some people do it cuz they can and/or dont need $1000 usd a day to live.



    a lot of places, a family can live on $10 a month or less.



    with these amounts, not difficult to believe it is "financially beneficial" to counterfeit low-value items.

    .

    .

    <--- look what's behind the mask! - cool link 1/NO ~ 2/NNP ~ 3/NNC ~ 4/CF ~ 5/PG ~ 6/Cert ~ 7/NGC 7a/NGC pop~ 8/NGCF ~ 9/HA archives ~ 10/PM ~ 11/NM ~ 12/ANACS cert ~ 13/ANACS pop - report fakes 1/ACEF ~ report fakes/thefts 1/NCIS - Numi-Classes SS ~ Bass ~ Transcribed Docs NNP - clashed coins - error training - V V mm styles -

  • epcjimi1epcjimi1 Posts: 3,489 ✭✭✭
    WSJ pic looks like this....and you thought grading coins @ pcgs was bad, lol,....ciggie butt, wrist support, water, pile of deformed coins, lower right, look @ mid central, all these coins are bent, not a good gig

    image

    Battered coins can be redeemed?? through a program of the U.S. Mint. Photo: FormerFedsGroup.com

    image

    right click image, select properties, copy image address, use forum image icon in thread response, paste image address, voila
  • cladkingcladking Posts: 28,307 ✭✭✭✭✭
    It was reported last year that some of these shipments were half dollars. It's not only that they are apparently fakes but that they get more half dollars than quarters. Apparently the Chinese counterfeiters aren't aware that half dollars don't circulate in the US. Still the government has paid out many millions of dollars for these "coins".



    Now that the government has been burned by fake Chinese coins they'll try to do something about the millions of dollars of Chinese fakes in the numismatic hobby.



    Favored nation indeed.
    Tempus fugit.
  • csdotcsdot Posts: 669 ✭✭✭✭
    The U.S. should consider changing the law. If you google this businessman's name, you will see that his business is causing a stir in a number of countries.
  • BryceMBryceM Posts: 11,721 ✭✭✭✭✭
    I very much doubt they're looking for varieties. What they call work some of us here call a relaxing evening.....



    image

  • Another article that is a bit longer and has different photos:
    http://news.amm.com/chasing-th...americas-waste-stream/

  • ambro51ambro51 Posts: 13,580 ✭✭✭✭✭
    I can vouch for "coins in junk cars". In the 80's when silver skyrocketed I went through local "you pick" car junkyards and uprooted rear seats and looked around generally and in one days haul made over 400$, a lot by selling the silver coins.
  • coindeucecoindeuce Posts: 13,471 ✭✭✭✭✭
    Originally posted by: ambro51

    I can vouch for "coins in junk cars". In the 80's when silver skyrocketed I went through local "you pick" car junkyards and uprooted rear seats and looked around generally and in one days haul made over 400$, a lot by selling the silver coins.




    So what was your profit after paying the junkyard proprietors for the property you removed from their cars, or did you just take the coins ?

    "Everything is on its way to somewhere. Everything." - George Malley, Phenomenon
    http://www.americanlegacycoins.com

  • ConnecticoinConnecticoin Posts: 12,473 ✭✭✭✭✭
    An average of 746 coins per car and the large number of half dollars does seem suspect. A lot of money can be made from adding fake clad quarters, halves, and Ike dollars to the mix of mutilated coins.
  • BStrauss3BStrauss3 Posts: 3,109 ✭✭✭✭✭
    All the mint has to do is reduce the price paid per pound to something more in line with the average value of the scrap less refining costs. Nobody is saying it's not scrap metal with some value, just not $20/pound.
    -----Burton
    ANA 50 year/Life Member (now "Emeritus")
  • rickoricko Posts: 98,724 ✭✭✭✭✭
    When I was young, we often found old cars scrapped in the woods on the mountains...

    we did find coins, but the danger was bees....for some reason, yellowjackets love old cars to nest in ....Cheers, RickO
  • SaorAlbaSaorAlba Posts: 7,466 ✭✭✭✭✭
    Reminds me of my father buying a second hand car in the 1970s when we moved to New England, my brother and I took out the seats one day and found a mini-stash of Canadian dimes, quarters etc. Only wish I had thought of that when my mom owned the '64 Ford Galaxy - that might have had some silver in it.
    In memory of my kitty Seryozha 14.2.1996 ~ 13.9.2016 and Shadow 3.4.2015 - 16.4.21
  • epcjimi1epcjimi1 Posts: 3,489 ✭✭✭
    Back in 1976, I bought a TR7 brand new. British Leyland was the manufacturer. $6300.

    I removed the carpets to clean. Unused fasteners, ciggie butts crushed out into the paint and a coin.

    No wonder 1970s BL / Britiish sports car industry failed. The quality was horrible. Nice design, though.

    Looked like this.

    image
  • libertydudelibertydude Posts: 243 ✭✭
    I want to see an automobile shredder!

    EDIT: Surprisingly quite a few videos of them in action on YouTube [ example ]
  • SaorAlbaSaorAlba Posts: 7,466 ✭✭✭✭✭
    Originally posted by: epcjimi1





    I removed the carpets to clean. Unused fasteners, ciggie butts crushed out into the paint and a coin.









    In Soviet Russia car drive you!

    In memory of my kitty Seryozha 14.2.1996 ~ 13.9.2016 and Shadow 3.4.2015 - 16.4.21

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