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Burnsville, Minnesota Coin Dealer Indicted For Fraud Scheme  
 

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1681 Posts
 Posted 04/13/2018  1:26 pm  Show Profile   Check jdmern's eBay Listings Bookmark this reply Add jdmern to your friends list Get a Link to this Reply
Hmm... Here is the text:


Quote:
Collectors Universe has initiated a lawsuit in federal court that accuses a Minnesota rare coin firm and a Minnesota dealer of selling to customers counterfeit coins in counterfeit Professional Coin Grading Service holders that were made to order from Chinese manufacturers.

The lawsuit was filed in United States District Court, Central District of California, on Dec. 7, against Burnsville, Minn., rare coin firm Burnsville Coin Co., dealer Barry Skog, whose LinkedIn professional profile lists him as the firm’s chief executive officer, and up to 25 unnamed John Does.

The complaint alleges violations of the Hobby Protection Act, the Lanham Act, violation of RICO, common law fraud, conspiracy and violation of California’s unfair competition law.

Collectors Universe is the parent company of PCGS.



The addition of unnamed John Doe defendants allows the litigation to expand to include more individuals as the discovery process reveals more about the alleged import and sale of counterfeit coins.

The complaint alleges that during the past four years the Burnsville Coin Co. and Skog have sold – and continue to sell – counterfeit rare coins not marked COPY, in violation of the Hobby Protection Act.

The lawsuit alleges that the defendants ordered counterfeit coins directly from manufacturers in
China, and that “Defendants request counterfeits of specific denominations and dates of coins from their supplier after receiving orders from customers …”

In CU’s first count for violations of the Hobby Protection Act, the filing cites the example of Robert Webber of Goldsboro, N.C., who purchased two coins from the defendants in April 2010 for $12,400. The coins – Seated Liberty dollars dated 1851 and 1858 – were counterfeits made to order in China.

The second count is for infringement of PCGS’s federally registered trademarks as the counterfeit coins were sold in false PCGS holders purporting to be genuine “with the purpose of passing off counterfeit Chinese-made coins in said holders to other dealers and the public as PCGS authenticated and graded coins.”

The third count is for violations of the Lanham Act, which protects trademarks.

The fourth count is for RICO racketeering violations resulting in the trafficking in counterfeit goods and services.

The fifth count in the suit alleges that the defendants violated California’s Unfair Competition law.

The sixth count is for conspiracy in that the defendants – including yet-unnamed John Does – agreed to manufacture and import counterfeit coins in counterfeit PCGS holders to sell to other dealers and the public.

Collectors Universe has requested that the court stop the defendants from manufacturing, importing and selling counterfeit coins in counterfeit PCGS holders and that they deliver for destruction all counterfeit coins in their possession, including those in counterfeit PCGS holders.

Collectors Universe also asks that the defendants pay CU “all gains, profits and advantages derived by them from their sale of counterfeit coins in counterfeit PCGS holders,” pay damages and restitution, and pay CU a sum equal to three times the amount of damages, in addition to exemplary damages and attorney’s fees.

The complaint requests a jury trial. #9632;
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 Posted 04/13/2018  2:22 pm  Show Profile   Bookmark this reply Add MikeF to your friends list Get a Link to this Reply
Thanks!
Hi, my name is MikeF and I'm a degenerate coin collector. I also like adventure, big trucks, long walks on the beach and the Kansas City Chiefs.
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 Posted 04/13/2018  2:39 pm  Show Profile   Bookmark this reply Add moxking to your friends list Get a Link to this Reply
Almost every day we have new members asking about fake coins. The majority of those are easy to spot - Morgan's with weird dates, Draped Bust Dollars made in an opium den, and the list goes on and on.

My grandma used to say that when you are buying antiques or collectables "Buy what you know, or learn what you don't".

The easiest pickings and most gullible buyers are greedy people. They think the 1909-S VDB offered on Craig's list for $100 is worth thousands. Greedy? They pay for their ignorance and greed.

Scams are a two way street.

While the scammers are evil, the scammed never seem to want to acknowledge that they were greedy (not all the time, but frequently) and that they put money on a horse that was actually a goat.
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 Posted 04/14/2018  07:26 am  Show Profile   Check chafemasterj's eBay Listings Bookmark this reply Add chafemasterj to your friends list Get a Link to this Reply
Well said Moxking.
http://goccf.com/t/303774
Check out my counterstamped Lincoln Cent collection:
http://goccf.com/t/303507
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United States
141 Posts
 Posted 04/14/2018  07:42 am  Show Profile   Bookmark this reply Add Lionel90 to your friends list Get a Link to this Reply
This kind of stuff makes me think twice about buying expensive coins. Kind of scary to a beginner like me. Moxking, I agree about greed somethings are to good to be true but what about paying normal price and getting scammed? Beginners like me have to trust in the dealers until we get more knowledge and experience. Sometimes I make a bad deal but hopefully it won't cost me too much money. So I don't take the advice of buying the key coins first. That advice sounds like a good way to get into trouble instead of saving money.
Edited by Lionel90
04/14/2018 07:54 am
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 Posted 04/14/2018  07:47 am  Show Profile   Check jdmern's eBay Listings Bookmark this reply Add jdmern to your friends list Get a Link to this Reply

Quote:
The easiest pickings and most gullible buyers are greedy people. They think the 1909-S VDB offered on Craig's list for $100 is worth thousands. Greedy? They pay for their ignorance and greed.

Scams are a two way street.


I could not disagree more with the idea that scam victims somehow deserve it.

Not only do I find that sentiment to be incredibly myopic and shortsighted, but in regards to this particular case, as I understand it, this 'dealer' operated by selling fake pieces at fair market value. We're not talking about buyers looking to hit a home run, buying a $2.30 fake from China and expecting it to be a $50k coin.
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 Posted 04/14/2018  08:49 am  Show Profile   Check Collects82's eBay Listings Bookmark this reply Add Collects82 to your friends list Get a Link to this Reply

Quote:
Ban the no no site and other counterfeit shill sites from selling goods in the United States would be a start. It can be done.

We all know where this crap is manufactured.


A couple thoughts here. US authorities shutting down the no no site is going to create a litany of issues due to so many companies using it to legitimately procure product across all industries. A shut down to appease coin and handbag collectors while messing with tens of thousands of legit business isn’t going to happen. Recent to the news is the US shutting down a certain illicit services site. Obviously it’s possible. (Thankfully was done!) But certainly easier when the scope of user was very narrow and none of it was good.

A counterfeit operation like they had going goes beyond easy access through a website. This kind of a setup results from real offline factory relationships.

The US has very limited options. China has to be a part of the solution, at least an equal partner in leading the way. The recent trade war goes to show they have bigger macro economic fish to fry than counterfeit coin operatives.

Logistically, if the US shuts down coin imports from China and a list of other countries, traders will just route via elswhere and fudge origin paperwork. The margins on these are so high this would simply become an irritating cost of doing business. Banning all coin imports would be an LOL move, certainly be the end of the hobby for all of us who prefer world coins.

We could try to implicate the factory, but local authorities are unlikely to get the motivation to do anything, thats reality. In all likelihood, the factory and trading company exporting the coins just change their names. Maybe it’s an opportunity for a new address down the street. The stakeholders in China aren’t really going to change anything. I’m sure there is a new dealer in the US excited to take over the business line from this guy going to jail.

There will always be a subset in any market of unscrupulous dealers and ignorant buyers. It sucks. Been that way since the beginning of whatever. Just like there will always be a few friendly dealers who have to put up with incorrigible buyers. It’s a thorn bursting the hobby’s bubble that will persist. Neither is more or less at fault than the other. Just back to the age old question of why we can’t be good to be at each other.

I’m glad they caught this guy. Countdown is on to the next one. It surely will be.

My hoard of '82s is up to 130! 18 BC x 1, 182 x 1, 282 x 1, 682 x 1, 782 x 2, 882 x 1, 982 x 3, 1182 x 7, 1282 x 2, 1382 x 1, 1482 x 4, 1582 x 9, 1682 x 11, 1782 x 33, 1882 x 35, 1982 x 18
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 Posted 04/14/2018  09:58 am  Show Profile   Bookmark this reply Add Conder101 to your friends list Get a Link to this Reply

Quote:
Ban the no no site and other counterfeit shill sites from selling goods in the United States would be a start. It can be done.


That's not the Justice Department, that's commerce department.
Gary Schmidt
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 Posted 04/14/2018  12:00 pm  Show Profile   Bookmark this reply Add paxbrit to your friends list Get a Link to this Reply
Most counterfeits are sold at less than market prices to collectors drooling over a rarity at a bargain price.

You can't cheat an honest man.

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 Posted 04/15/2018  12:57 pm  Show Profile   Bookmark this reply Add ron6788 to your friends list Get a Link to this Reply
Conder101:
Quote:

What you expect the Justice Department to do?...

There is a law already on the books that says a replica of a US coin needs to have that word stamped on it or the word Copy. We can enforce this. Selling fakes is getting to be a ridiculous thing here. I'm seeing it more and more. It's usually not a malicious thing, just ignorance.

The Chinese industry of imitating brand names is nefarious. By its very nature it violates patent and proprietary rights. Certainly, the sovereign right of a country to be the sole producer of its own currency is not questionable. Don't forget, even our oldest money, is still legal tender. Do you think China would like it if we counterfeited their money and then sold it over there, pennies to the dollar?

Trump, or any president, or other official with jurisdiction in such matters (Secret Service or FTC, perhaps) could speak out publicly on this, condemn the country's that condone it, and at least make more people aware. Non-collectors likely don't even know to what extent- nor, how well- counterfeited US coinage has become.
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 Posted 04/15/2018  1:05 pm  Show Profile   Bookmark this reply Add ron6788 to your friends list Get a Link to this Reply
thisistheshow:
Quote:
If he knew they were fakes, as implied by the indictment, then he is the real criminal. We all suffer if dealers intentionally sell fakes. It's only speculation in regards to this instance, but holds true when applied in general.

Yes, I agree, but I would take it one step further. A dealer should be held accountable even if he didn't know he was selling a fake- at least to the extent that the buyer is completely made whole, the coin is turned in to the authorities, and the seller takes the fall (hopefully, he's insured against such things). Sure, it's tough but that what being in business should be all about. Dealers should be a cut above the rest and need to make every effort to be knowledgeable about what they're selling.
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 Posted 04/16/2018  09:17 am  Show Profile   Bookmark this reply Add Conder101 to your friends list Get a Link to this Reply

Quote:
There is a law already on the books that says a replica of a US coin needs to have that word stamped on it or the word Copy. We can enforce this.


Yes there is, and the Justice Department could enforce that, but that's going after the people here that are marketing them not the people manufacturing them which is what the other gentlemen wanted them to do. I'm all for enforcing the hobby protection act, but it only has teeth against people in this country.


Quote:
Yes, I agree, but I would take it one step further. A dealer should be held accountable even if he didn't know he was selling a fake- at least to the extent that the buyer is completely made whole,


The dealer would be held accountable, he can't pass good title, and legally he can't sell unmarked copies, so he would be required to make full restitution to the buyer. Even if he sold it in good faith.
Gary Schmidt
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 Posted 04/16/2018  09:21 am  Show Profile   Bookmark this reply Add nfine to your friends list Get a Link to this Reply

Quote:
Ban the no no site and other counterfeit shill sites from selling goods in the United States would be a start. It can be done.


What they are doing is already against the law. I'm not sure passing another law to make it "more" illegal will stop them. Criminals don't obey laws and new laws just make things more difficult for law abiding people.
Remember, what the Dormouse said.
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 Posted 04/17/2018  8:43 pm  Show Profile   Bookmark this reply Add Bryan78 to your friends list Get a Link to this Reply

Quote:
What they are doing is already against the law. I'm not sure passing another law to make it "more" illegal will stop them. Criminals don't obey laws and new laws just make things more difficult for law abiding people.


Exactly! No point passing another law on top of an already existing law if we won't enforce the first one in the first place.

The problem is we don't have a set punishment for crimes and we don't make them serve their full sentence when they do get sentenced.
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 Posted 04/18/2018  11:29 am  Show Profile   Bookmark this reply Add Conder101 to your friends list Get a Link to this Reply

Quote:
What they are doing is already against the law. I'm not sure passing another law to make it "more" illegal will stop them.


Except most of the sites hosting those websites are not in the United States, and what they are doing is not illegal there. So what they are doing is NOT against the law.
Gary Schmidt
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