Federal Lawsuit Filed Against “Coin Doctors” by Collectors Universe / PCGS
Filed Under: Coin Grading & Authentication, Coins and the Law, Counterfeits & Fraud, Dealer News, PCGS
Professional Coin Grading Service (PCGS) today sent out a Press Release announcing a major lawsuit has been filed in United States District Court, Central District of California, against six individuals claiming they engaged in a pattern of racketeering activity, breach of contract, conspiracy, unfair competition and fraud for allegedly submitting “doctored” coins to PCGS for grading on multiple occasions for a period of years.
The Defendants named in the suit include: Al Rossman of Nevada, Rick Wesslink of California, Robert Lehmann of Maryland, in addition to three members of the Professional Numismatists Guild ; Eric Steinberg of Florida, Silvano DiGenova of California, and Greg Krill of California
PCGS stated that as many as 10 other defendants could be added to the Complaint.
The suit claims the dealers violated federal laws, including the Lanham Act involving interstate commerce and RICO racketeering statutes, and also alleges “unlawful, unfair and fraudulent business practices” for submitting coins that were deceptively altered in an attempt to increase their value.
The Complaint states: “Defendants knew that these coins had been ‘doctored,’ by themselves and/or other persons engaged by them for that purpose. Their methods included lasering the surfaces of extremely rare proof gold coins to remove surface imperfections, building up commonly-worn or weakly-struck portions of coins, and other physical and chemical processes. Defendants represented to PCGS that these coins had natural surfaces, intending to deceive PCGS’s graders so that the ‘doctored’ coins would be certified by PCGS and then sold in the rare coin marketplace.”
A couple of examples given in the complaint include the following coins:
- 1885 $5 gold piece, originally submitted to PCGS on Dec 16, 2009 by Steinberg on behalf of Defendant Rossman. Foreign substance added to coin’s surface to cover marks.
- 1879 $4 Stella gold piece, Originally submitted by Heritage on May 8, 2008. Resubmitted on August 28, 2008 by DiGenova after having been laser treated to remove lines. PCGS refused to grade the coin.
The suit claims the “Defendants have caused, and are continuing to cause, substantial and irreparable damage and injury to Collectors Universe and to the public and Defendants have benefited from such unlawful conduct and will continue to carry out such unlawful conduct and to be unjustly enriched thereby unless enjoined by this Court.”
Collectors Universe is suing for triple damages as well as all profits made through these deceptive submissions.
“Every owner of a PCGS coin should be confident in the fact that PCGS stands behind its product guarantee 100%. Over the past 24 years PCGS has paid over $7 million under its guarantee program for coins which have developed some type of problem due to coin doctoring or some other issue,” said David Hall. “Occasionally our graders have been deceived by the very clever application of foreign substances only to have these substances eventually spoil the coin and necessitate our buying it back. We believe we have compelling evidence against several individuals who, working together and separately, have made a business out of this practice. We hope the courts will provide a suitable remedy to this problem.”
“We firmly believe coin doctoring to alter a coin’s appearance is clearly illegal under the law,” Hall continued, “and we know that it often ruins coins long term and certainly deceives grading services and future coin buyers. Today’s announcements of the development of scientific doctoring detection and also the lawsuit filed against alleged coin doctors is another big step in this process, but we will not be finished until we eliminate this unsavory practice once and for all.”
PCGS is a division of Collectors Universe, Inc. (NASDAQ: CLCT)
About the Author
PCGS is the world's largest rare coin authentication company and a division of Collectors Universe, Inc. (NASDAQ: CLCT). Additional information is available from Professional Coin Grading Service at (800) 447-8848. E-mail: info@PCGS.com Web site: www.pcgs.com
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