Executives of the Professional Coin Grading Service (www.PCGS.com) warn that the problems of Chinese-made counterfeits of rare coins are getting worse and could soon expand to include fakes of rare bank notes imported into the United States.
In personal meetings and messages conveyed to influential members of Congress in Washington, DC, PCGS officials cautioned that imported counterfeit coins have increased in quantity and quality, sometimes making it difficult to distinguish fakes from genuine.
"PCGS has detected over 5,500 counterfeit coins submitted in the last 12 months, a higher number by far than in any previous 12-month period," said, Don Willis, President of PCGS, a division of Collectors Universe, Inc. (NASDAQ: CLCT).
"Chinese counterfeiting is the most serious challenge faced not only by the collectibles markets and brand name products, but also by the United States Treasury. Entire industries have sprung up in China to manufacture virtually anything made in American including U.S. Government issued coins. These factories and industries operate in the open and with the full support of the Chinese government. By its lack of action to stop the activities, the Chinese government endorses the counterfeiting of US coins," Willis stated.
"Even worse, Customs and the US Government do little to stop counterfeits from entering the U.S. Once in the US little effort is made to arrest and prosecute individuals selling counterfeit material. Consequently the U.S. has been flooded with counterfeit products, including coins, resulting in the loss of billions of dollars in revenue each year."
PCGS attorney Armen Vartian is among members of a delegation of professional numismatists scheduled to meet in Washington on June 27 with Congressman Lamar Smith (R, Texas), Chairman of the House Committee on Judiciary who introduced legislation (H.R. 5977) on June 20 to extend provisions of the Hobby Protection Act to make it unlawful to assist or support anyone who violates the Act.
Under the current federal law first enacted in 1973, it is illegal to sell unmarked replicas of coins. The Hobby Protection act requires manufacturers and importers of imitation numismatic items to mark them plainly and permanently with the word, "COPY."
They are also scheduled to meet with Congressman Fred Upton (R, Michigan), Chairman of the House Committee on Energy and Commerce, and Congressman Howard Berman (D, California), the ranking Democrat on the House Committee on Foreign Affairs.
Vartian will show the congressmen examples of Chinese-made counterfeit coins that now are part of the PCGS reference collection.
Collectors Universe President and PCGS Co-Founder, David Hall, said counterfeiting rare coins is not a new problem, but the drastic increase in the huge quantity of counterfeits is new and potentially devastating.
"In the 1960s there was a rash of counterfeits of key rare coins, even rolls of them, such as 1909-S V.D.B. cents, 1916-D, 1932-D and 1932-S quarter dollars. Counterfeits from the Far East are not new. Fake 1804 dollars have been available in Hong Kong for decades. What is new is the tremendous volume of counterfeits coming out of China, the counterfeiting of grading service holders, and the quality of the numismatic counterfeits is much higher than in the past," Hall explained.
Since its founding in 1986, PCGS experts have authenticated, graded and certified more than 23 million coins from around the world with a declared value of over $26 billion. For additional information, visit www.PCGS.com or call PCGS Customer Service at (800) 447-8848.