(Santa Ana, California) – Professional Coin Grading Service (PCGS) is advising its authorized dealers of the existing terms and policies regarding submission of so-called “doctored” coins, and is reinforcing the application of those policies.
“We’re seeing more and more coin doctoring than we’ve ever seen, and the methods used to alter the coins are more and more sophisticated,” said Ron Guth, President of PCGS, a division of Collectors Universe, Inc. (NASDAQ: CLCT).
“We are constantly trying to keep up with new and sophisticated techniques, such as micro surgery with lasers and various chemical treatments to alter the surfaces of coins. You name it, and the coin doctors are trying it. We’re giving public notice to those who alter coins that we’re clamping down on them.”
Guth said PCGS graders are frequently updated on what to watch for when analyzing coins submitted for certification. He compares the continuing education to combat coin doctoring and counterfeiting to anti-virus software makers who are on constant vigil against computer hackers and new viruses.
In addition to close examination and scrutiny by PCGS graders, coins suspected of tampering in violation of Title 18 of the U.S. Code, Section 331, may be submitted by PCGS to the Federal Bureau of Investigation (FBI) for review to determine if U.S. law has been violated. PCGS will cooperate fully if the FBI believes there is sufficient information to warrant an investigation.
“We are fighting the coin doctors who are trying to take advantage of the marketplace, deceive the public and perhaps pursue our money back guarantee.”
PCGS is reminding dealers of the specific language of their Authorized Dealer Agreement regarding impaired or altered coins. The contract states in part:
Dealer shall not “doctor” coins or knowingly submit to PCGS coins which have been “doctored”. Coin “doctoring” involves the alteration of the appearance of a coin to attempt to increase its value, and may involve, among other things, adding substances to coins (such as, among other things, putty, wax, facial oils, petroleum jelly or varnish); treating coins with chemicals (such as, among other things, potash, sulfur, cyanide, iodine or bleach); heat treating coins in any way to alter their appearance; re-matting (“skinning”) proof gold; “tapping” and “spooning” ( i.e., physically moving surface metal to hide marks); filing rim nicks; or repairing coins (re-tooling metal).
Dealer and PCGS agree that PCGS would suffer irreparable damages if Dealer were to engage in coin “doctoring” and that PCGS shall be entitled to not only compensatory damage but also preliminary and final injunctive relief for any breach of Dealer’s obligation not to “doctor” coins or knowingly to submit “doctored” coins to PCGS. Dealer agrees that in the event PCGS incurs any attorney fees and/or cost and expenses as a result of said “doctoring,” including but not limited to investigating claims of alleged “doctoring,” and engaging in legal proceedings with Dealer or any third party relating to same, PCGS shall be entitled to reimbursement of such fees and costs from Dealer.
“PCGS Authorized Dealers are encouraged to review and understand the dealer agreement and to understand the scope and application of Title 18 of the U.S. Code, Section 331,” said Guth.
Title 18, Section 331, involves the mutilation, diminution and falsification of coins, and states:
Whoever fraudulently alters, defaces, mutilates, impairs, diminishes, falsifies, scales, or lightens any of the coins coined at the mints of the United States, or any foreign coins which are by law made current or are in actual use or circulation as money within the United States; or
Whoever fraudulently possesses, passes, utters, publishes, or sells, or attempts to pass, utter, publish, or sell, or brings into the United States 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.