Interesting gold counterfeit story

Goldfinger · March 18, 2004 2:54AM

I purchased a gold lot that included 3 counterfeits (out of 29). I suspected, but couldn't tell for sure, so I brought them to Stack's for an evaluation, which confirmed my suspicions. The seller is a square dealer - he didn't know they were fakes and is refunding my money. These are coins from the estate of a relative of the seller, which were purchased from a dealer (which dealer I do not know).

The seller spoke with the same Stack's numismatist and learned a bit more about these coins ($5 and $2.50 Indians and Liberties). It seems many fakes were struck in real gold in Lebanon and Syria and are sold to tourists and distributed in the U.S. most frequently North Carolina, California and Texas.

I'd never thought before about the origins of gold counterfeit coins; I just assumed generic crooks were making fakes. This information is a bit more interesting. Does anyone know more about this?

-Jay

Shamika · March 18, 2004 3:15AM

"It seems many fakes were struck in real gold in Lebanon and Syria..."

That is interesting.

JadeRareCoin · March 18, 2004 3:23AM

The US Government sold old US Mint equipment to Lebanon in the early 1960's, if my memory serves me correctly. Not the smartest decision ever made. At that time, it was illegal to import gold bullion into the United States, but it was not illegal to import collectible coins, including those struck in gold. My understanding is that the counterfeits were made as a loop hole to import gold bullion into the US. A lot of counterfeit gold was/is also struck in Bulgaria, Turkey, et. al. We buy counterfeit gold coins whenever possible. Some are of equal or greater value than the real thing. Neat stuff.

Goldfinger · March 18, 2004 3:34AM

Bulgaria is an interesting connection as well, given the type of good smuggled through there. But doesn't it seem like a lot of trouble to mint fake quarter eagles as a way to smuggle bullion into the U.S.?

mercurynut · March 18, 2004 3:45AM

I didn't know that thanks for sharing!

1jester · March 18, 2004 4:34AM

Jade, can you please give us some examples of counterfeits worth more than their real counterparts? That's really fascinating. You're buying all counterfeits? What for, if I may ask? Is the price lower than for real coins? I bought a double eagle a year ago and sent it to ANACS and it came back as a struck copy. I was a bit upset.

JadeRareCoin · March 18, 2004 4:50AM

Well, for the same reason that some bust half counterfeits are worth more than genuine bust halves, some gold counterfeits are more desireable than their generic counterparts. It just depends. We had a counterfeit Indian quarter eagle in our case with the following note on the holder: "not for sale". A guy walked-up and wanted to buy it. I told him that it was for educational/display purposes only and we did not want to sell it. He really tried to get me to part with it and his final offer was greater than what the real thing would cost. It turns out that he was a collector of counterfeit gold coins and very knowledgeable on the subject. We talked for awhile and he pointed to a few dealers who had, unknowningly, counterfeit US gold in top tier slabs. The coins in the slabs were examples that he already had and was not interested. In those particular cases, the counterfeit is worth less than the real thing.

You guys do realize that counterfeit gold sometimes will be slabbed, don't you? Some of the counterfeits that we own are very deceptive and would easily fool most dealers/collectors. The best ones are the die struck examples on spec planchets, with the dies having been made with spark-errosion (EDM) technology.

We have many counterfeits, mostly halves, dollars and some gold. I even own some incredible counterfeit Colonial Currency and even a few government issued Colonial Currency "counterfeit detectors". The main purpose of stocking them is that we have collectors interested in counterfeits. Other benefits are that they are nice conversation pieces and great educational tools (better than a book!). It's an interesting area of numismatics that is not reasearched well enough and there is a several lack of documentation on the subject.

Goldfinger · March 18, 2004 5:37AM

Jade, it sounds as if you can address the lack of documentation if you wanted to write on the subject.

I was torn over what to do if I had ended up stuck with the counterfeits. I'd be inclined to sell them with full disclosure, but I'd be hesitant out of concern that a buyer would resell them as genuine. One answer is to have "COPY" or some other mark stamped on the coins, but then they'd lose some appeal as historical artifacts. Another answer is to charge more for them than for genuine coins! Are prospective buyers vetted? Do you ask those interested in counterfeits "Are your intentions honorable?".

JadeRareCoin · March 18, 2004 5:59AM

Jade, it sounds as if you can address the lack of documentation if you wanted to write on the subject.

I am not qualified in this area, but there are a few that I know who could write on the subject. Lonesome John wrote a decent book about counterfeit gold detection many years ago and I still use it occassionally. Unfortunately, most of the book simply states how difficult it is to detect well crafted counterfeits. The bad jobs can be spotted by most collectors and dealers without a reference book.

The important thing to realize is that most of the gold counterfeits out of Lebanon are of the approximate gold weight and purity. Most common date, common grade U.S. gold is traded as bullion, so your counterfeits will always have intrinsic value. It is important to know what the intent is of the person buying the gold, but I would NOT mark the gold as "copy". Besides, they aren't technically copies, imo, but counterfeits. There's a difference, imo. We have a $20 Liberty gold coin that looks very convincing and is of the approximately correct weight, but it is not gold. It is a really neat coin that I paid $75 for. I have showed it to customers and it has fooled most people who have seen it. The guy I bought it from is a vest pocket dealer who had a 2X2 box full of counterfeits. That coin is one that could cause some financial damage, as it is only worth about $75, but it could be sold for $400 easily.

Another quick story: a couple of years ago, a collector friend bought a group of about 10 bust halves. He stopped by our table to show us. As I flipped through the stack, I yanked one out and said, "oh, this is a counterfeit". He got mad and started walking back to the dealer to get a refund. I stopped him and explained that it was the most valuable coin in the group of mostly VG-F halves. We bought the coin from him and he made a nice profit. The bust half counterfeits are easy to spot. US gold is a whole different story. $1 counterfeit gold is too common for comfort. Same with $2.5 and $5. Keith Davingnon (sp?) wrote a great book on counterfeit bust halves and I am told that a revised version is either out or coming soon, due to the 100 or so new varieties that surfaces after the first edition.

1jester · March 18, 2004 7:12AM

Jade, thanks for the information. It's a fascinating field of study. I've bought a lot of coins in Eastern Europe, and I've come across more than my fair share of counterfeits, of all metals and countries. It really gets you thinking about not being cheated! As you mention, some are so good that it's nearly, or completely impossible (for me) to detect. I wonder if I've missed some? Usually I send all my counterfeits to a dealer who has a collection, for educational purposes. I have an electronic scale accurate to 0.01 grams, but that is only one tool of many to aid in the detection of counterfeits. I believe experience is perhaps the best method, and I'm far down on that learning curve.

The gold double eagle I mentioned is essentially perfect. I studied it for hours, in fact, and compared it to others (real ones). All indicators are right on, including the exact weight. Granted, I don't have a high powered microscope; perhaps that would have helped. Plus, I know it was in the possession of one family for 30 years, so that means it must have been produced in the very early 1970s, at the latest. I can only believe the counterfeiters have gotten better since then.

JJSingleton · April 25, 2017 11:35AM

Note: This is a very old thread!

I came across one of these Syrian counterfeit quarter eagles this week at the GNA show. It fooled me in that although I was not willing to call it authentic it looked pretty good to me. The only tip I saw was the color was a bit off for a 19th century motto qtr eagle.

Randy Campbell (ICG) looked at the coin for me and immediately identified it as counterfeit and said it was most likely made in Syria in the late 1950s. I might also mention that another second tier TPG at the show said it looked good and would probably holder if submitted. I've know Randy for years and I am quite sure he is correct.

The good news is the dealer that owns it has been collecting counterfeits for years, and being a 22 carat counterfeit he saw it as a big win as it was a generic date and he would be adding it to his collection.

Be careful out there when dealing with raw gold. Although most counterfeits are relatively easy to see, some are very good and only the most professional can catch them.

Insider2 · April 25, 2017 12:09PM

@Goldfinger said: "The seller spoke with the same Stack's numismatist and learned a bit more about these coins ($5 and $2.50 Indians and Liberties). It seems many fakes were struck in real gold in Lebanon and Syria and are sold to tourists and distributed in the U.S. most frequently North Carolina, California and Texas."

Sorry, whoever told you: "...most frequently NC, CA, TX." is misinformed.

@JadeRareCoin said: "A lot of counterfeit gold was/is also struck in Bulgaria, Turkey, et. al."

While this may be true in the recent past, Bulgaria and Turkey were not producing fake U.S. gold in the 50's, 60's, 70's, and I'll bet not the 80's or possibly even the 90's either!

@JadeRareCoin said: "The important thing to realize is that most of the gold counterfeits out of Lebanon are of the approximate gold weight and purity.

Unfortunately, this is not entirely correct. "Approximate" makes the post somewhat accurate I suppose. Depends on what range that word covers.

ALL of the gold coins produced in Lebanon were below standard. That's why their color is "wrong." The Lebanon "mints" were put out of business by the war and it was not until sometime around 1978 to 1982 that the decent counterfeits were of the correct tolerances as their numismatic value exceeded the value of the gold needed to make them more passible.

@JJSingleton Matt, the part-time ANACS employee who looked at the coin in Dalton, does not claim to be an authenticator or grader but he is a smart fellow and he is trying to learn to grade better. I think he will do it.

1630Boston · April 25, 2017 12:19PM

@Goldfinger
Thanks for the info and all of the other info posted here

OT but about a month ago I noticed that the bagel chips at a local convenience store here on the east coast were made in Bulgaria. The same company also had croissants, made in Bulgaria.

tommy44 · April 25, 2017 12:27PM

@JJSingleton said:
Note: This is a very old thread!

I came across one of these Syrian counterfeit quarter eagles this week at the GNA show. It fooled me in that although I was not willing to call it authentic it looked pretty good to me. The only tip I saw was the color was a bit off for a 19th century motto qtr eagle.

Randy Campbell (ICG) looked at the coin for me and immediately identified it as counterfeit and said it was most likely made in Syria in the late 1950s. I might also mention that another second tier TPG at the show said it looked good and would probably holder if submitted. I've know Randy for years and I am quite sure he is correct.

The good news is the dealer that owns it has been collecting counterfeits for years, and being a 22 carat counterfeit he saw it as a big win as it was a generic date and he would be adding it to his collection.

Be careful out there when dealing with raw gold. Although most counterfeits are relatively easy to see, some are very good and only the most professional can catch them.

Interesting, thanks for sharing

Coincidently I brought a counterfeit $5 Indian (it scanned 0.9000 or 21.6K fine) to the GNA show on Friday, Randy also verified that it was counterfeit and "the other" TPG rep said it looked good but also said he wasn't a gold expert. Wes Mull also said the color looked off to him. I ended up selling it as a counterfeit to a dealer I do business with on a fairly regular basis.

Timbuk3 · April 25, 2017 12:51PM

Thanks for sharing this valuable information !!!

ricko · April 26, 2017 6:29AM

This is a very information packed thread, and for those of us who like - and buy - gold coins, very useful. I only buy from very trusted sellers... at the same time, I realize that with the high quality counterfeits today, even they may occasionally be duped. Well... life itself is full of risks... We do the best we can... Most of us anyway... Cheers, RickO

oih82w8 · April 26, 2017 6:37AM

I can't tell you how many times I get into these threads a few posts and rarely do I look at the posting dates to find out that these are old threads that someone revisited. Interesting topic though.

Interesting gold counterfeit story

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