RECYCLERS DEFRAUD U.S. MINT WITH CHINESE COUNTERFEIT COINS Publique Deposited
- Everybody's got a get-rich-quick scheme, it seems. Apparently some recyclers were taking advantage of a U.S. Mint program to purchase mutilated coins by passing off mutilated counterfeits. -Editor
Federal investigators in New Jersey say they have uncovered a $5.4 million plot to defraud a U.S. Mint-run program that redeems unusable dimes, quarters and half dollars.
In court papers filed last week, federal prosecutors lay out a daring scheme led by several U.S.-based metal recyclers - one based in New Jersey -- to import counterfeit coins from China in an effort to take advantage of the U.S. Mint's century-old Mutilated Coin Program.
The program pays recyclers nearly $20 per pound for dimes, quarters and half dollars that have been bent, broken, corroded or no longer can be counted by machine.
The suspicions of investigators with U.S. Customs and Border Protection were raised in 2009 after they witnessed an uptick in shipments of mutilated coins coming through the Port of Los Angeles, prosecutors say. They reported their concerns to Homeland Security Investigations.
Most of the shipments were coming from China, with recyclers claiming the coins were discovered in cars exported to China as scrap metal, prosecutors say.
Among the tip-offs for investigators was the number of half dollars coming in from China for redemption outpaced the total the U.S. Mint has made, they say.
"Interestingly, United States Mint personnel also believe that more half dollars have been redeemed by China-sourced vendors in the last 10 years than the United States Mint has ever manufactured in its history," according to a forfeiture complaint filed in U.S. District Court on March 20 by Assistant U.S. Attorney Lakshmi Srinivasan Herman.
A sampling of the coins, valued at nearly $400,000, showed that they contained aluminum and silicon, elements not present in coins manufactured by the U.S. Mint, they say.
And the coins were all "mutilated" in a similar fashion, prosecutors say. They were "mechanically cut or deformed and corroded by some type of unknown chemical before being washed," the court papers say.
Prosecutors say Loung, along with other metal recyclers, have claimed that the coins they redeemed in the U.S. were found in cars exported to China for scrap metal.
But a 2009 analysis by Customs and the U.S. Treasury's Office of the Inspector General compared the numbers of cars exported to China against the number of damaged coins imported from China, court papers say.
"There would have to be approximately $900 in coins in every vehicle ever exported to China as scrap metal in order to account for the total amount of waste coins imported from China for redemption," Herman writes.
The second largest importer of scrap metal from the U.S. is India and, to date, the U.S. Mint has not received any mutilated coins from there, the complaint says.
Each year, according to the complaint, the U.S. Mint loses money with its mutilated coin program "because it only makes a profit on the metal it recovers, which is much less than the redeemed value."
Exactly HOW LONG would it have taken for the Mint to catch on to this? They bought more half dollars than the Mint itself manufactured in its history?Why did another government agency have to be the one to discover this? -EditorTo read the complete article, see:
Recyclers try to defraud U.S. Mint with counterfeit coins from China, feds say (www.nj.com/news/index.ssf/2015/03/feds_uncover_scheme
_to_defraud_us_mint_out_of_54m.html) - 2015-03-29
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