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All Posts Tagged With: "coin fraud"

California Gold Dealer, Superior Gold Group LLC is seized, assets frozen

On Monday, a California judge froze the assets of Superior Gold Group LLC of 100 Wilshire Boulevard, as well another office in Woodland Hills,  after it was accused of fraudulent business practices in a civil lawsuit filed against the company and owner Bruce Sands by the Los Angeles County district attorney and the Santa Monica city attorney.
Editors Note: This company has NO relationship to Superior Galleries, a well known and respected numismatic firm.

Superior Gold Group, which sold gold coins and bullion and other precious metals, is alledged to have taken  payments from customers but never delivered the gold ordered, charged prices much higher than fair market value and misled customers into buying expensive specialty coins according to the lawsuit, filed Friday.

In their lawsuit, the agencies said Superior Gold took advantage of investors who flocked to gold as the price of the precious metal rose and the value of many other investments fell in recent years.

“By fostering fear and confusion among its customers, Superior has induced them to pay far above market prices for various gold products,” the complaint said.

In a report by The LA Times, they recounted one victims story…”

Steven Siry, 61, of Los Angeles is one customer who believes he was ripped off. Siry said he invested $20,000 in a “gold IRA” through Superior Gold. But company representatives sold him collector’s coins at an inflated rate rather than offering him bullion, and it took more than a year and numerous phone calls before the coins were delivered to the trust company that was to hold them, he said.

Siry estimates the actual value of the gold, when it finally arrived, as a little more than half of what he paid for it.

“It was a big mess, it was uncomfortable, and I felt kind of stupid, quite frankly, because I didn’t do enough shopping before I used them,” he said.

In another complaint the victim stated: “Nearly two years ago (Mar. ’09), I purchased approx. $47, 000 worth of gold and silver coins (my entire life savings). I have yet to recieve (sic) a single coin! I have been calling for years and they refuse to give me my money back or to buy my coins,” (more…)

Gold Coin Scam Victims: Where To Turn For Help

What do you do when a gold seller fails to deliver or the merchandise you received was not as described when you ordered it?  Who can you contact for help when you don’t receive payment for gold you’ve submitted to sell?

In two recent cases, “Howard” in Mississippi wired $20,000 several months ago to a California coin and bullion dealer to purchase gold coins, and “Richard” in Virginia sent $150,000 to the same dealer.  With the recent run-up in bullion prices they both would have made a nice profit, except they still have not received any gold from the dealer.  Howard laments, “All I’ve gotten is the run-around.”

“If you don’t know gold coins, you’d better know your gold coin dealer,” is the advice to collectors and investors from three nonprofit organizations: the American Numismatic Association (www.money.org), the Industry Council for Tangible Assets (www.ictaonline.org) and the Professional Numismatists Guild (www.pngdealers.com).

“There are many reputable, professional numismatists in the United States,” the three organizations emphasize.  “Before you make a purchase or offer something for sale, do your homework and check the dealer’s credentials.  For example, contact the Better Business Bureau to check the company’s BBB rating or if the company is even accredited by the BBB.”

A listing of Better Business Bureau accredited and rated companies nationwide can be found online at www.bbb.org.

The dealer that received the combined $170,000 in unfulfilled purchase orders from “Howard” and “Richard” had an “F” rating from the BBB.

Typically, dealers who are unresponsive to reasonable requests from customers seeking resolution of disputes are not involved in the mainstream of numismatics, but may advertise in prominent, mainstream news media.

Based on the experiences of the ANA, ICTA and PNG, and in consultation with law enforcement agencies, the three organizations suggest that buyers or sellers of gold coins who encounter problems consider taking these actions:

  • Make copies of all correspondence, receipts and transactions and if possible have copies of advertisements or the dates and times ads were broadcast.
  • Always contact the company directly to try to resolve the dispute.  Ask for the manager or company owner.
  • Take thorough notes of your conversation(s).

If the problem is still not resolved after a reasonable amount of time, contact the Customer Service and/or Advertising Departments of the news media organization(s) that published or broadcast the company’s advertisements and let them know about the problems.

The ANA, ICTA and PNG advise: “It’s your money, so do your homework before placing an order, and if there is a problem then don’t just sit back and wait.  Be persistent in your efforts to resolve the dispute. Follow up with the company you did business with and the agencies where you’ve filed a complaint.  You may also want to consult with an attorney.” (more…)

Opinion: Laura Sperber’s Hot Topics – SO WHATS (NOT) NEW?

By Laura Sperber – Hot Topics

MY HOW THINGS HAVE CHANGED!

NOT! I can not believe how lethargic and pathetic the leadership of the coin business has become. PCGS launched their lawsuit back in May. Other than scaring the greedy bastards into slowing their dirty deeds-NOT MUCH ELSE HAS HAPPENED. No hobby groups have stood up what so ever and done anything about the situation. The attitude among dealers still seems to that the grading services are there to be abused.

I think its a crime that the best the PNG could do is announce they have a definition of coin doctoring. Whuppie! Did they do anything? Apparently not a damn thing. They are hiding behind the lamest of lame excuses (they are a reactionary, not proactive group). The perpetrators named in the suit got caught (by their own stupidity) still trying to ruin coins yet again recently (the evidence was even posted in Coin World). Even better, at the ANA Show this past summer one of the parties in the suit set up and proudly displayed his PNG banner at his table! What a slap in the face to those of us who do care. I know the PNG’s time has come and gone. They do nothing and are nothing for this coin biz-in MY opinion. Their PNG Days prior to major shows not only have become a show case for the parts of their membership they refuse to punish, they are a complete joke anyway (one must be invited for admission-how arrogant and stupid). I hope the PNG tries to prove me wrong about their total waste and ineffectiveness.

My head hurts from shaking so much after seeing what they are NOT doing! Besides, we all know its not the entire group of PNG dealers who are bad-so where are the innocent ones? You telling me they have little to no powers on these critical issues? Just more of a point about the bad dudes who apparently control that organization. if they wanted too, they could chase after and maybe even prevent coin doctoring-btye clearly choose not too. Looks like I will never have to pay $1,000.00 I promised for anyone the PNG catches and expels for coin doctoring. Yeah PNG, I am grandstanding for attention (NOT)! -at least I am not sitting on the sidelines with rose colored glasses doing nothing about all this!

Its not just them. I have only seen a handful of smaller dealers-the ones who get screwed by the coin docs perpetually stand up and make statements. Where are all the other big shot retailers? Why I am the lone wolf speaking out? But then I guess when you have a coin doc who sits behind your table and who sells you a lot of coins cheap your not going to complain about them. This doesn’t rock the boat culture has to change. Its for the good of the hobby for the long term.

READ THIS AND WEEP

Many people ask me why I do not like so many other dealers. It has nothing to do with them being competition. It has to do with them not caring or worse, they are phonies. One of the problems in today’s coin market place-many of the “newer” dealers just can not grade. That’s right, give them a raw coin out of the holder and they are clueless. Sadly, they have the best web sites and act like they are kings and hook the public. They are just one more means keep to the coin doctors longevity going. These unqualified dealers certainly are not going to be involved in stopping the coin docs. But we can make them change since they are too dumb to know what to do. Yet again, I call for more public scrutiny of dealers. (more…)

GUEST COMMENTARY: Coin Doctors – CAN’T STOP NOW

All Editorial and Commentaries posted on CoinLink represent the opinions of the author(s), who are soley responsible for this content. All points of view are encouraged and comments are welcomed.

By Laura Sperber – Hot Topics Blog

I say a heart-felt thanks to everyone who has emailed me support concerning the fight against coin doctors the past several months. Due to my hectic travel schedule, sometimes I just can’t respond to all your emails-but do know I read EVERY SINGLE ONE!

EVEN IF YOU ARE A NOT BIG DEALER, YOU COUNT

Every single person counts and is needed in this fight. Every single person has a voice that counts. Do not think there is nothing you can do.

You do not have to right on a blog like I do, you can just talk to your fellow collectors or dealers, at shows, clubs, or wherever. Send an email or a letter to the grading services, the numismatic organization, or the coin papers. The more “pressure” that is put applied, the better the results will be. If people don’t speak up it will be back to biz as usual for these bad guys.

A small dealer came up to me at the PCGS Invitational. He told me “I support you 100%”. He told me how badly he HATES the docs and anyone who is a mule for them. He told me how he has told one dealer friend why he won’t do business with him anymore and how he shoos away the docs from buying his coins. But he was upset because he felt he has no where to speak out. I told him if he can write a letter to an editor of a publication that’s great. I also told him-his voice has already spoken and he is a HUGE help. He definitely has the “RIGHT” attitude. Just imagine if very non doc did what he did-or had his attitude. I believe he also told me he is quitting the PNG.

At this point, the PNG has PROVEN (to me, in my opinion) with out any doubt to be the most WORTHLESS organization ever formed in coins when it comes to protecting the consumer and the coins themselves. As predicted, the PNG came up with a definition of coin doctoring and then all has been quiet since. I was totally disgusted that one of the PROVEN trouble makers of the PCGS lawsuit proudly displayed his PNG flag and was set up and doing business PNG day. That is a slap to EVERYONE (from the smallest collector to the biggest dealers). Meanwhile a high ranking PNG official told me he thought I was grandstanding on these issues for publicity. That’s why nothing makes me prouder than NOT being a PNG member.

I BELIEVE THIS IS THE BACKBONE OF TODAY’S PROBLEMS

Nothing disgusts me more than how dealers-especially young dealers disrespect the coin business. I watch the brightest potential talent all lean toward being “crack out” dealers and eventually fading in to full coin doctoring. Why isn’t the PNG working to scare them straight? Why can’t they educate them that coins are a treasure that need to be carefully saved in their original form? We desperately need to break this negative attitude or in 20-30 years it is a real possibility that the % of coins that will have been messed with in as high as 50%. The docs are all about making money. They will do whatever they can to a coin to gain a profit.

All the dealers refuse to blame their buddies or are in pure denial about the issues. So many dealers tell me I am so wrong and that its the grading services who should catch the bad coins. Here is what they need to wake up too: DEALERS WHO FEEL ITS THEIR RIGHT TO VIOLATE THE GRADING SERVICES SUBMISSION CONTRACTS AND FRAUDULENTY SUBMIT “WORKED ON” COINS. Key word: FRAUD. These guys should not only be exposed, but they should be forced to pay back ALL their ill gotten gains in multiples and perform numismatic community service of retraining and supporting dealers from NOT being doctors.

THE PCGS LAWSUIT HAS STARTED TO SHOW SOME CHANGE

I was speaking with John Albanese (the founder and finalizer at CAC). He confirmed to me that the amount of “messed with” coins he has seen since the lawsuit has been seriously reduced. That’s a huge plus. But that does not mean these rats are on the run. As evidenced in a Coin World Article recently, even after the lawsuit was filed one of the defendants still had the disgusting audacity to be ready to doctor more coins. So as you can see, this is nasty and serious war against sick and greedy individuals. (more…)

Coin Rarities & Related Topics: Defining Coin Doctoring and Dipping, Additions to the PCGS Lawsuit Against Alleged Coin Doctors

News and Analysis regarding scarce coins, coin markets, and the coin collecting community #17

A Weekly Column by Greg Reynolds

I. The filing and re-filing of this lawsuit

Over the last forty years, especially from the late 1990s to 2006 or so, the coin collecting community has suffered from the terrible problem of coin doctoring; coins are deceptively altered for the purpose of tricking experts, particularly those employed by the PCGS and the NGC, into concluding that a coin is of higher quality than it was before it was doctored. The process of doctoring a coin reduces its level of quality and, in many (though not nearly all) cases, permanently damages the coin. Coins ranging in value from less than $50 to more than $1 million have been doctored.

In many instances, doctored coins ‘turn’ at a later time, as unintended byproducts of doctoring processes result in unsightly delayed chemical reactions or the decomposing of added matter on the doctored coins. It is not unusual for a coin doctor to deliberately harm (often permanently) a coin that grades MS-64 in order to try to deceive experts into believing that it grades MS-66.

John Feigenbaum is president of David Lawrence Rare Coins (DLRC), and has been involved in the coin business for more than twenty years. In 2004 and 2005, DLRC sold one of the fifteen greatest collections of classic (pre-1934) U.S. coins ever to be publicly auctioned. Feigenbaum says, “in general I [John] applaud PCGS for taking action on this matter, and I think they should take any and all actions in the future towards parties that are trying to slip doctored coins past them.”

In my column of June 2, I analyzed the CU-PCGS lawsuit against alleged coin doctors, which was filed in late May. I encourage readers who wish to learn about this lawsuit, its importance and its implications, to read my column of June 2nd. On Aug. 10, CU-PCGS filed a “second amended complaint” along with a new motion.

II. The basics of the lawsuit

Although technically PCGS is a subsidiary of Collectors Universe (CU) and it is CU that filed this lawsuit, the PCGS predates CU and the PCGS is the core of Collectors Universe. Further, the PCGS certifies coins. So, it is clear and helpful to refer to the plaintiff as the PCGS as the lawsuit concerns allegations that dealers deliberately submitted doctored coins to the PCGS, without disclosing intentionally added defects, for the purpose of deceiving graders at the PCGS into assigning higher grades to such coins than the coins would have merited before they were doctored. Coin doctoring, of course, reduces the grade of a coin, often to the point where the coin no longer merits a numerical grade.

The submission contract that each dealer signs to be a dealer-submitter of coins to the PCGS for grading and authentication prohibits dealer-submitters from sending in doctored coins for numerical grading. At the very least, it is argued that dealers who submit doctored coins for numerical grading have breached their respective contracts with the PCGS. Moreover, the PCGS argues in the lawsuit that such coin doctoring is in violation of several Federal and California State laws. Curiously, attorneys for the PCGS declare that conspiracies to doctor coins and submit them to the PCGS fall under RICO statutes, and are thus said by the PCGS to constitute racketeering.

Importantly, attorneys for the PCGS argue that coin doctoring is not just a civil offense, a racket and a breach of contract. Attorneys for the PCGS maintain that coin doctoring is a crime under Title “18 U.S.C §331,” which is cited in the lawsuit as follows, “Whoever fraudulently alters, defaces, mutilates, impairs, diminishes, falsifies, scales or lightens any of the coins minted at the mints of the United States … [or] … Whoever fraudulently possesses, passes, utters, publishes, or sells, or attempts to pass, utter, publish or sell … any such coin, knowing the same to be altered, defaced, mutilated, impaired, diminished, falsified, scaled or lightened … Shall be fined under this title or imprisoned not more than five years or both.” (more…)

Federal Lawsuit Filed Against “Coin Doctors” by Collectors Universe / 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.

Click Here to view a Copy of the Complaint

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.” (more…)

Millions Lost From Coin Fakes, Hobby Leaders Warn

Chinese-made counterfeit coins pose a significant financial threat to unsuspecting consumers, according to leaders of five of the country’s most influential rare coin organizations. They warn the public is spending millions of dollars on fake U.S. coins offered in online auctions and elsewhere, such as flea markets and swap meets.

fake_1915-D_5In a jointly-issued consumer advisory (below) the groups caution the public not to purchase any so-called “replica” coins because they may be in violation of federal law. They also urge consumers to only purchase genuine rare coins from reputable, professional dealers or face the risk of losing money on copies that are illegal to re-sell.

Below is the consumer protection warning issued by (in alphabetical order) the American Numismatic Association (www.money.org), the Industry Council for Tangible Assets (www.ICTAonline.org), Numismatic Guaranty Corporation (www.NGCcoin.com), Professional Coin Grading Service (www.PCGS.com) and the Professional Numismatists Guild (www.PNGdealers.com).

Hobby periodicals report that more than a million counterfeit coins manufactured in China have been fraudulently sold in the United States posing a significant financial risk for unsuspecting consumers. Buyer beware! Consumers who buy an item based only on its perceived rarity and who have no knowledge as to how to determine whether the coin is genuine subject themselves to great risk of losing their money

The American Numismatic Association (ANA), the Industry Council for Tangible Assets (ICTA), Numismatic Guaranty Corporation (NGC), Professional Coin Grading Service (www.PCGS.com) and the Professional Numismatists Guild (PNG) urge consumers to educate themselves before making purchases: know what you are buying and purchase only from reputable, experienced rare coin dealers (professional numismatists).

“We believe many of these counterfeits subsequently are being resold as genuine rare coins in online auctions and at flea markets and swap meets,” said Clifford Mishler, ANA President.

“Millions of dollars already have been spent on these fakes and potentially millions more may be unwittingly lost by consumers who mistakenly think they’re getting a genuine rare coin,” warned Paul Montgomery, PNG President.
(more…)