scott

Second chance to Help Fight Against Fakes

coins, counterfeit, legislative, policy 2 Responses »

Jun 092013

Following the failure of the House of Representatives to even consider the Collectible Coin Protection Act in the 112th Congress (H.R. 5977), Representative Lamar Smith (R-TX) kept his promised and re-introduced the bill into consideration for the 113th Congress. On May 7, 2013, H.R. 1849 was assigned to the House Energy and Commerce Committee. The bill was introduced two days before the National Money Show, the current co-sponsors are Reps. Bill Cassidy (R-LA), Steve Scalise (R-LA), and Henry Waxman (D-CA). Fred Upton (R-MI) is the Chairman of the Energy and Commerce Committee and Waxman is the Ranking Member. Both Cassidy and Scalise are members of that committee.

The bill is exactly the same as H.R. 5577 that was introduced late in the 112th congress.

Rep. Steve Scalise is a new addition to this bill. He represents Louisiana’s 1st District that covers an area north and to the west of New Orleans that includes Metarie and Slidell. Scalise attended a reception at the National Money Show where he expressed his commitment to see the bill pass.

Scalise is the newly elected chairman of the Republican Study Committee (RSC), a caucus of House Republicans “organized for the purpose of advancing a conservative social and economic agenda in the House of Representatives.” In an interview during the National Money Show reception, Scalise said that would be H.R. 1849 an effective tool to help the hobby and since it is revenue neutral, he will recommend it to the 174 members of the RSC.

Currently, the Hobby Protection Act (15 U.S.C. §§2101-2106 and 16 CFR 304) does not allow for enough protection for the buyer. Aside from requiring the word “COPY” to appear on a copy, it does not allow for buyers or the government to take action against resellers, only the manufacturers.

When the Hobby Protection Act was first enacted in 1973 and updated in 1988, the online world did not exist the way it does today. It was easier to trace the manufacturers and the overseas sellers than the distribution channels are today. By the time a counterfeit coin reaches the United States, it could have been bought and purchased several times before being noticed. Then there is no remedy for those who have been duped.

Another problem is that the counterfeiters are learning to counterfeit slabs. Both NGC and PCGS have seen their slabs counterfeited or altered holding counterfeit coins. Both NGC and PCGS have the same problems with trying to protect their brands against counterfeiters.

The introduction of the bill is the result of the work of the Industry Council for Tangible Assets (ICTA) and Gold and Silver Political Action Committee (GSPAC), and the numismatic community working with key representatives to craft an effective legislation. It is also written to ensure support from congress. Benefits of the new law are as follows:

Include the distribution and sale of items not properly marked as being a COPY
Expands the provisions to include “any person who provides substantial assistance or support to any manufacturer, importer, or seller” who knowingly engages in any act or practice that violates the Act;
Expands the ability for those who were sold counterfeit items to include the counterfeiter, their agent in the United States, or anyone who knowing “transacts business” in violation of this Act;
Extend trademark violations and remedies to help third-party certification services protect against counterfeit holders.

These new provisions will allow collectors, dealers, and grading services to bring legal actions that are much more effective, with much stronger remedies than previously existed. It will allow those harmed to work with the Justice Department to bring criminal actions, where apporpriate.

WE STILL NEED YOUR HELP

The only way to ensure that H.R. 1849 becomes law, especially since we are approaching the end of this session in an election year, is to contact your member of congress will let them know that the numismatic community supports this Act and that their support is important.

To contact your representatives, visit house.gov and enter your Zip Code at the top right of the page. When you contact your representative, you should mention that H.R. 1849 is revenue neutral and will not require additional appropriations. The bill will go a long way in combating counterfeit rare coins in the marketplace, saving collectors and investors millions of dollars in fraudulent transactions.

To read a copy of the bill and to track its progress, you can use govtrack.us. Sign up for a free account then visit this link for information about this bill and how to track its progress.

An example of a Morgan Dollar cut in half to match a date with a mintmark to have the coin appear something it is not. Coin was in a counterfeit PCGS slab and caught by one of their graders.

DISCLAIMER: I am working as Political Coordinator for the Gold and Silver PAC.

A look inside the U.S. Mint at West Point

bullion, coins, Eagles, gold, news, silver, US Mint, video 2 Responses »

Jun 072013

This year, the U.S. Mint Facility at West Point, New York turn 75 years old. When opened in 1937, it was to be the nation’s silver bullion depository giving it the nickname “The Fort Knox of Silver.” In 1988, West Point was granted mint status.

The “W” mintmark on U.S. coins is highly prized since it is the only mint not to strike circulating coins with its own mintmark. While the West Point Mint did strike cents from 1973 through 1986, the coins produced were not struck with a mintmark.

Today, the West Point Mint only strikes precious metal coins. From commemoratives through bullion American Eagle coins, West Point produces more precious metal coins than any other Mint in the world, including the San Francisco Mint.

Located just outside the United States Military Academy, the West Point Mint does not allow visitors or tours for security reasons. However, exceptions are made. With the facility celebrating its 75th anniversary, the U.S. Mint has been allowing journalists to visit and take pictures of their operations.

Thus far, the best set of images were published in the Daily News. In the article, “West Point Mint, with $80 billion in precious metals, celebrates 75th anniversary,” the reporters visit the West Point Mint and bring back some very interesting picture. You can read the story on the Daily News’s website or if you just want to see the pictures, you can see this board I created on Pinterest.

The Daily News also created a two-minute video looking inside the facility. The video follows (if it begins with a commercial, it is being sent by the Daily News—the cost of embedding their video):

If you are having problems seeing the video, go here.

All images and the video courtesy of the Daily News.

Unintended consequences

coins, gold, history, US Mint 4 Responses »

Jun 052013

Franklin Delano Roosevelt was inaugurated on March 4, 1933 at the height of the Great Depression. Unemployment was over 25-percent, inflations was rampant, farm prices have plummeted so low that it was cheaper for farmers to plow under crops, and banks were failing at record numbers.

Two weeks prior to his inauguration, FDR asked his old friend and Wall Street executive William H. Woodin, to be the Secretary of the Treasury and help implement a new monetary policy. Woodin rushed to Washington to work with Ogden Mills, President Herbert Hoover’s Secretary of the Treasury, in order to understand the issues. On the day of FDR’s inauguration, Mills resigned and voluntarily stayed in Washington to help Woodin with various policy changes.

Hours after FDR’s inauguration, the Senate approved the appointment of Woodin as the Secretary of the Treasury. With his new Treasury Secretary in place, Woodin’s first act was to declare a three-day bank holiday in order to try to stop the failures.

Handbill that was displayed in Post Offices calling for the recall of gold with the text of Executive Order 6102

One of the problems facing Woodin was the amount of gold leaving the United States and being used for overseas trade. More gold was leaving the Treasury than they were taking in. At Woodin’s urging, FDR signed Executive Order 6102 recalling all privately held gold. This executive order required everyone to return his or her gold to the Federal Reserve by May 1, 1933 in exchange for $20.67 per troy ounce (equivalent to $369.72 when this was written).

Executive Order 6102 specifically exempted certain industrial uses of gold, art, and allowed people to keep up to $100 in face value in gold coins. It also exempted “gold coins having recognized special value to collectors of rare and unusual coins.” The protection of collectible coins was credited to Woodin since he was a collector of coins and patterns he acquired while director of the New York Federal Reserve Bank.

Although most of the country complied with the executive order, some challenged the law and started to sue the government to stop the gold recall. With the challenges mounting, on June 5, 1933, congress formally takes the United States off the gold standard by enacting a joint resolution (48 Stat. 112) nullifying the right of creditors to demand payment in gold.

For weeks after FDR issued EO 6102, the U.S. Mint continued strike gold double eagle coins because they did not have an order to stop. After receiving the stop work order, the coins were stored until they were ordered melted in 1934.

Even though the double eagles were melted, several examples of the 1933 Saint Gaudens double eagle gold coin did find its way out of the Mint. While most were tracked and confiscated, one example found its way to Egypt into the collection of King Farouk. This was the coin that eventually was sold in 2002 for $7,590,020 ($20 given to the government to monetize the coin) to a private collector. Half of the proceeds were paid to the government as part of a settlement with British coin dealer Stephen Fenton, who was arrested trying to sell the coin at the Waldorf Astoria Hotel in 1998.

: 1933 Saint Gaudens Double Eagle (obverse).
Last sold for $7,590,020 in 2002.

: Reverse of the iconic 1933 Saint Gaudens
$20 Double Eagle gold coin

But that does not end the story of the 1933 Saint Gaudens double eagle. Since the sale of the only legal tender 1933 Double Eagle, ten coins found by the family of the late jeweler and coin dealer Israel Switt. The coins were sent to the U.S. Mint for authentication and were subsequently confiscated when they were determined to be genuine.

These coins are known as the “Langboard Hoard,” named for Joan Landbord, the daughter of Israel Switt, who claims to have found the coins while searching through her father’s old goods. On more than one occasion, Switt has been accused of being the source of the 1933 Double Eagle coins that made it out of the Philadelphia Mint.

In July 2011, a jury ruled that the 10 coins in the Langboard Hoard belong to the government. The case is currently being appealed.

The story of 1933 Saint Gaudens double eagle is truly an example of the law of unintended consequences. In an effort to rescue the economy, the cascading series of events that took the United States off the gold standard turned what was supposed to be an ordinary coin into one of the most intriguing stories of the 20th and now 21st century.

All images courtesy of Wikimedia Commons.

What is Shepherd really up to?

ANA, commentary, legal No Responses »

Jun 052013

I know I have not been writing a lot as of late. Those of us in the Washington, D.C. area know the problems that sequestration has caused on government agencies. It might take another month before we regain a rhythm that will allow me to plan my time better. I have a nice To-Do list of stories I want to post including four book reviews and a few iPhone apps that are interesting.

I also do not want to use this blog as a campaign vehicle because that would be boring for you to read and for me to write. But when something as big as the most recent news comes out and I am asked for a comment, I have no choice but to use this blog to answer the many email inquiries once so we can get on with life.

Contemplation of Justice by James Earle Fraser, outside of the U.S. Supreme Court, Washington, DC

Yesterday, the latest edition of Coin World began to appear in mailboxes. I knew this when I received several email notes about the article describing the amended lawsuit by former American Numismatic Association Executive Director Larry Shepherd. I opened the digital version of Coin World (the article is not online, yet), read the article with my mouth open, and found a link at the end of the story where you can download the amended complaint. I downloadedand read the amended complaint. [PDF]

The amended complaint is shocking and salacious. For those not familiar with the law and read that Shepherd is accusing the ANA of being a Racketeer Influenced and Corrupt Organization (RICO; 18 U.S.C. Chapter 96), it makes it look like the ANA is being compared to any number of organized crime figures you might have read about in the newspapers. Even though the RICO statutes were written to fight organized crime, using it is a common tactic by plaintiff lawyers to scare the defendants they are suing.

In order for a RICO charge to be accepted by the court, Shepherd and his lawyers will have to prove that a person as a member of an enterprise or the enterprise itself has committed to of 35 different crimes (18 U.S.C. § 1961). The crimes that Shepherd is alleging that the ANA has committed are racketeering, theft, and fraud.

Racketeering sounds like an ominous charge. Racketeering is a crime when two or more people conspire to fraudulently solve a problem. Shepherd alleges that a few employees of the ANA and members of the Board of Governors made up stories about Shepherd in order to find a way to relieve him of his duties for cause so they can invalidate his contract. The stories are salacious in nature and constitute Shepherd’s accusation of defamation that allows him to attach others to the case to show that there were more than two people involved.

The theft charge is from the guilty plea by former collections manager Wyatt Yeager. In January 2012, Yeager plead guilty to stealing items from the ANA Money Museum worth nearly $1 million. Yeager was sentenced to 27 months in a federal prison, two years of supervised probation, and ordered to pay restitution to the ANA.

With the theft charges already verified by a criminal court, Shepherd has to prove that the ANA committed fraud and at least two of the co-defendants conspired to fraudulently have him dismissed to resolve whatever issues the co-defendants perceived hurt the ANA. That would prove the case under RICO and hold the co-defendants and the ANA liable for Shepherd’s dismissal.

If you decide to read the pleading please remember that it is one side of the story. While the accusations are salacious and disturbing, we have not heard from the ANA or the co-defendants. This is a stark contrast to how they handled Shepherd’s dismissal when they could not stop talking. However, the ANA has a new general counsel who may be a little more cautious than the previous general counsel. The previous general counsel, Ron Sirna, is a co-defendant on this lawsuit.

Shepherd’s charges against the ANA and the co-defendants are disturbing. In fact, the nature of the salacious accusations is disturbing. If there is any truth in these accusations, those involved must be disciplined. Employees involved should be required to undergo remediation to keep their jobs or be dismissed if their action crossed the legal line.

According to the ANA Code of Ethics, members are required to “To base all of my dealings on the highest plane of justice, fairness and morality, and to refrain from making false statements as to the condition of a coin or as to any other matter.” Any member found to have be part of the racketeering that Shepherd’s lawsuit alleges, should be subject to an ethics review.

I was recently reminded of a quote from Inferno, the first part of Dante Alighieri’s epic poem The Devine Comedy: “The darkest places in hell are reserved for those who maintain their neutrality in times of moral crisis.” Therefore, members of the Board of Governors who did not “report any knowledge of waste, fraud, corruption or impropriety relating to the Association to all other Board members immediately upon learning thereof” (Code of Ethics, Section 12) should also be subject to an ethics review.

Shepherd is also not absolved from his part. While he may have a legitimate case, his timing is suspect. Why did he wait until the beginning of the election to amend his complaint laced with descriptions of salacious accusations at this time? Shepherd has to remember that while he makes accusations, it takes two to tango, which means that he may have had a part in acts that the pleading describes. It is also possible that Shepherd and his attorneys picked only examples that are in his favor. Until the ANA answers the charges levied by Shepherd we are left wondering what was left out?

The bottom line is that it is time to clean house. ANA members must elect a Board of Governors that will act more like a Board of Directors. People who will be professional, open, and work for the benefit of the ANA. The Board of Governors must treat the association like the $6 million business it is and set up programs for the professional office to support the association for the benefit of the members and not the benefit of the staff. While there may be a few people with issues, as described in Shepherd’s pleading, those few people are making the situation difficult for those who are doing a wonderful job.

If I am privileged to receive enough votes to be elected to the Board of Governors, I renew the promise I made previously that the first motion I will make will be to hire an executive management firm that has a verifiable background in helping non-profit organizations to review the entire ANA management structure. This stuff has to stop so that we can get on with the business of building our collections with all of the advantages the ANA can provide us, the members.

Image from Photographs from the Supreme Court’s Collection.

Summary of May 2013 Coin-Related Legislation

coins, legislative, policy No Responses »

Jun 032013

H.R. 1905: Mother’s Day Centennial Commemorative Coin Act

Sponsor: Rep. David McKinley (R-WV)
• Introduced: May 9, 2013
• Referred to the House Committee on Financial Services
Track this bill at http://www.govtrack.us/congress/bills/113/hr1905

H.R. 1071: To specify the size of the precious-metal blanks that will be used in the production of the National Baseball Hall of Fame commemorative coins.

Sponsor: Rep. Richard Hanna (R-NY)
  • This bill is a technical change to the National Baseball Hall of Fame Commemorative Coin Act.
  • Signed by the President on May 17, 213
  • This bill became Public Law 113-10
See the information about this bill at http://www.govtrack.us/congress/bills/113/hr1071

S. 1011: Boys Town Centennial Commemorative Coin Act

Sponsor: Sen. Mike Johanns (R-NE)
  • A bill to require the Secretary of the Treasury to mint coins in commemoration of the centennial of Boys Town
  • Introduced: May 22, 2013
  • Referred to the Senate Committee on Finance
Track this bill at http://www.govtrack.us/congress/bills/113/s1011

Voting has begun!

ANA No Responses »

May 302013

By now, those who are eligible to vote for the American Numismatic Association Board of Governors have either received their paper ballot or the information with instructions how to vote electronically. Please remember that all ballots are due back to the auditor by June 30, 2013.

For previous elections, I made it a point to learn about the candidates and provided readers with my endorsements and why I endorsed those candidates. Since I am on the ballot, I will not endorse any other candidate this year. I ask that my readers consider my candidacy and those who commit to growing the ANA through honesty, integrity, and a heavy dose to technology in order to attract collectors under 50-years old. Those potential members are the association’s future.

Last night, I posted a letter to ANA members on my election website, vote4scott.info. Please read it and if you have any question, drop me a note. I will be more than happy to discuss any of your concerns.

Thank you!

Memorial Day 2013

celebration, coins, history 2 Responses »

May 272013

Coin Collectors Blog supports:

HONOR THE FALLEN.
Go Silent.
Memorial Day 12:01 PM EDT.

Decoration Day was first celebrated by Freedmen, freed southern slaves, May 1, 1865 in Charleston, South Carolina to honor the service of the 257 Union soldiers buried at the Washington Race Course. Today, Washington Race Course is known as Hampton Park.

The next year, southern states began their own Memorial Days to honor their soldiers who died during the war. No specific date was used but occurred in late April through June. By 1880, there was a more organized Confederate Memorial Day. These celebrations honored specific soldiers to commemorate the Confederate “Lost Cause.”

In the north, the fraternal organization of Civil War veterans The Grand Army of the Republic began organizing Decoration Day celebrations in 1868. Decoration Day was the day to honor the fallen by decorating the graves of Union soldiers with flowers and flags.

The Nisei Soldiers of World War II Bronze Medal

Memorial Day did not take on national significances until after World War I. Rather than being a holiday to remember those of died in service during the Civil War, the nation began to recognize all those who gave the ultimate sacrifice during all conflicts. By the end of World War II, most of the celebrations were renamed from Decoration Day to Memorial Day. Memorial Day did not become an official holiday until 1967 and its date changed from the traditional May 30 to the last Monday of the month by the Uniform Holidays Act (Public Law 90-363, 5 U.S.C. § 6103(a)) in 1968.

On this Memorial Day, I want to take this opportunity to remember those who gave the ultimate sacrifice while defending freedom at home and abroad. Whether it was wars for this country’s freedom, helping allies overseas, world wars, or helping others settle armed conflict around the globe, it is important we take this day to honor their service that helped make this country what it is today.

World War II veteran Richard Overton, left, is seen in his Army uniform in an undated photograph provided by the City of Austin. Overton, 107, sits outside his Texas home earlier this month. (AP/Austin American Statesman)

To read more about 107 year-old Richard Overton, see this story at FoxNews.com.

Coin images courtesy of the U.S. Mint.
Pictures of Richard Overton courtesy of FoxNews.com.

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