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Fake Mutilated U.S. Coins from China

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Fake Mutilated U.S. Coins from China

One of the three firms based in China that have been accused by the U.S. Mint of submitting fake coins to the Mutilated Coin Redemption Program is trying to clear its name.

Wealthy Max Ltd. invited members of the House Financial Services Subcommittee on Domestic Monetary Policy and Technology as well as officials from the Treasury Department, Department of Justice, and Department of Homeland Security to attend a live audit of the company's current stockpile of mutilated U.S. coins.

Image courtesy of FormerFedsGroup via CoinWeek Image courtesy of FormerFedsGroup via CoinWeek

None of the government officials invited chose to attend. However, a group of retired FBI agents did participate in the audit. Wealthy Max had some 13 metric tonnes of what they claim are mutilated coins, stored in 13 separate wooden crates.

Strong Rapport

US Mint LogoWhile less is known about the other two companies (America Naha Inc. and XRace Sports Co. Ltd.) the mint alleges to have defrauded the Mutilated Coin Redemption Program, Wealthy Max has actually been dealing with the U.S. Mint for a dozen years. This sort of rapport could loom large in proving the company's innocence. There was never a problem with the previous 160 shipments of salvaged coins that Wealthy Max sent to the mint.

Moreover, by being forthright with its audit process and inviting interested parties to attend, Wealthy Max appears to be taking the high road and following regulations. One of the retired FBI agents, who is the director of an organization called FormerFedsGroup, had this to say of Wealthy Max's audit:

"This unsealing and audit followed a very strict set of rules established by U.S. federal law enforcement agencies to ensure a clear chain of evidence that will hold up in court. Our agents have a deep understanding of these rules as they have conducted hundreds of investigations and are experts in the proper handling of physical and documentary evidence."

Redemption Issues

scrap_metal_1The whole mess arose when the mint realized that some of its shipments of salvaged U.S. coins from China had problems. For starters, the compositions were off. U.S. coins are copper-nickel alloys, but some of "coins" sent to the mint included aluminum and silicon, implying it was simply scrap metal.

Another red flag was an increasingly suspicious number of mutilated half dollars being sent. The mint began to realize that it had received more bent, broken, clipped, or melted half dollars from China in the past decade alone than it had ever issued in its history! This is not unlike when scammers produce fake casino chips (see #7 herein), but the casinos catch on over time because the number of chips begin to exceed how many they have issued. It also makes sense that someone looking to defraud the U.S. Mint's redemption program for mutilated coins would focus on half dollars, the largest-sized copper-nickel coins it produces.

The U.S. Mint is seeking a civil forfeiture to recover the suspicious shipments from the last several years. Meanwhile, Wealthy Max Ltd. is demanding to be compensated for the $5.4 million worth of shipments it sent in 2014 and 2015. While the situation has still not been resolved, it would seem that Wealthy Max is the only one of the three accused firms that is cooperating.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.

About the Author

Everett Millman

Everett Millman

Analyst, Commodities and Finance
Managing Editor

Everett has been the head content writer and market analyst at Gainesville Coins since 2013. He has a background in History and is deeply interested in how gold and silver have historically fit into the financial system.

In addition to blogging, Everett's work has been featured in CoinWeek, Advisor Perspectives, Wealth Management, Activist Post, and has been referenced by the Washington Post.

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