Chinese coin counterfeiter legal in China
Selling fake U.S., world and Chinese coins worldwide
Part 1 of a 2-part series
By Susan Headley
Special to Coin World
All images courtesy of Jinghuashei.
Chinese businessman “Jinghuashei” is proud of striking high-quality items such as these counterfeit Morgan dollars.
Images above show wide range of counterfeit numismatic items made in the Big Tree Coin Factory, including bars, ingots, sycee and ancient Chinese coins and artifacts. The manufacturing includes expert aging of items, making it difficult to distinguish genuine items from fakes. All shown are fake.
Chinese workers (whose faces have been blocked from the image supplied) strike coins on a vintage press. At right, a close-up of the coining chamber shows newly struck Morgan dollars that appear to have a Proof surface. Upper right is a wide-angle image inside the die vault containing counterfeit dies of various denominations.
Big Tree Coin Temple Coin Shop shelves are laden with counterfeit coins, both ancient and modern. Also in evidence are fake albums to house various series. The same pride of craftsmanship is evident with the “knock-off” binders and albums as with the coins. Note counterfeit paper money on shelf in photo at the top of the page.
Close-up of coins in albums show a counterfeit U.S. Trade dollar and counterfeit Morgan dollar in holder. Both coins have been aged to mimic wear.
Jinghuashei buys genuine coins and genuine PCGS slabs to use as models from which to make counterfeit coins. He also sells fake coins in fake slabs.
Big Tree Coin Factory produces complete sets of counterfeit Morgan dollars as well as fake Dansco albums to house the collections. Plastic pocket pages accommodate 2- by 2-inch holders. At the shop one can purchase “raw” coin rolls. Note the care given to the reeds on the edges of counterfeit Morgan dollars in image at left.
Container is full of counterfeit Indian Head and large cents produced in the Big Tree Coin Factory in Fujian Province in the People’s Republic of China. Dates on the fake Coronet cents are 1854 and 1857. Dates on the counterfeit Indian Head cents display a wider range: 1869, 1870, 1871, 1872, 1877, 1908-S and 1909-S. Although Jinghuashei claims to mark all such coins as “replicas,” no markings are detectable on any of the coins shown in bins in this photo and others he provided. Nor is a “replica” inscription evident on coins in smaller packaging options.
Close-ups of coins in silk-covered trays, at right and below, show a wide array of newly minted counterfeit U.S. coins, including Standing Liberty quarter dollars, Barber quarter dollars, Indian Head cents, large cents and smaller silver and gold coin denominations. The trays are used to house the coins sold in the Big Tree Coin Factory’s storefront operation, the Big Tree Temple Coin Shop, located in a different city. The trays are also used for transporting the fake coins to shows and other retail outlets in China. However, retail buyers seldom see coins packaged in the silk trays. The coins are usually sold individually or housed in fake coin holders that mimic third-party coin grading services’ plastic slabs. They are also commonly sold in fake famous-brand albums.
Liu Ciyun (who prefers to be known by his eBay handle, “Jinghuashei”) is a typical young upwardly-mobile Chinese suburbanite. Married, with a 2-year-old son, Jinghuashei has worked hard the past few years to build a business.
Like most legitimate businessmen, Jinghuashei operates within the laws of his country, and has earned official certification for his small production facility, which employs up to 30 people. The products he sells are properly licensed, where appropriate, and absolutely, 100 percent legal to produce and sell in China.
The only fault that most Americans might find with Jinghuashei’s business model is that he is in the business of producing counterfeit coins.
Jinghuashei’s company is called the Big Tree Coin Factory. It is located in the Fujian (also known as Fukien) province in the southeast portion of the People’s Republic of China. This area is well known to be a hotbed of counterfeiting activity and Jinghuashei acknowledges being aware of approximately 100 competitors who are manufacturing fake coins.
Jinghuashei says that his coin factory is probably the largest of its type in China. It produces in excess of 100,000 fake coins per month for Chinese coin types alone.
He says he is currently only selling about 1,000 counterfeit U.S. coins per month, mostly on eBay. His primary motivation for servicing this comparatively small volume business is that he is making contacts with people he hopes will come to China to buy counterfeit coins on a wholesale basis.
Jinghuashei also claims a sales volume of several thousand counterfeit coins per month in world coin types.
Legal business
Jinghuashei is forthcoming about his business practices. He is certain that he is operating legally in China, which requires that the coins he makes are dated 1949 or earlier. As long as he sticks to this one important regulation and maintains his business certification (license), he says he has nothing to fear from the authorities in China.
But what about the United States of America?
Isn’t he worried that the Secret Service or some other U.S. government agency will come after him for making counterfeit U.S. coins? After all, the coins struck by the U.S. Mint, regardless of date, are all still legal tender, and thus subject to U.S. coin counterfeiting laws. It is illegal for him to sell these coins in the United States, even via eBay.
Jinghuashei responds by claiming that he is operating within the confines of the Hobby Protection Act, a U.S. law that requires all nongenuine numismatic items produced after 1973 to be permanently and conspicuously counterstamped with the word COPY. When informed that his eBay auctions are not in compliance with this law, because he is using a punch that says REPLICA, he seems unconcerned.
Despite numerous online chats and e-mail exchanges with him in which the U.S. law has been discussed, Jinghuashei still hasn’t changed his punch to be in compliance.
Although he has never said it outright, it is apparent he feels invulnerable to U.S. law enforcement because they are unlikely to go all the way to China to prosecute him for the relatively small sums of money his eBay sales generate.
The word “replica” was used in conversations with and questions of Jinghuashei since that is the term he prefers and he appears to be more open to talking than if the terms “counterfeit” or “fake” are used.
Production costs
Jinghuashei acknowledges that the minting equipment currently used in his Big Tree Coin Factory is old and the images he provided show a cramped and dirty environment. But that helps to keep Big Tree’s coin manufacturing costs very low. He says he has access to more modern presses when he needs them.
Jinghuashei says it costs him only 8 cents each to produce each fake Chinese coin using iron-based planchets. Counterfeit U.S. coins cost more – an average of 50 cents each – because the copper and nickel planchet alloys cost him more to make. Jinghuashei says these figures include his entire expense, including materials, labor and marketing.
On eBay, Jinghuashei’s single-coin auctions are usually listed with a starting price of 5 or 10 cents, and they usually close around those prices when he gets a buyer.
Asked how he makes a profit if it costs 50 cents each to make his coins, he explains that he makes most of his profit from the shipping expense he collects from buyers.
This is a common practice with China-based sellers on eBay. They sell the item very cheaply, but then charge as much as $70 or more for shipping. Doing this serves two useful functions. First, their Final Value Fee expense is minimal, since eBay bases this fee on the auction’s closing price. Secondly, if an item is returned to the seller for some reason, the buyer can only recover that minimal bid amount since shipping and handling is typically nonrefundable.
Most of the Big Tree Coin Factory’s current profits are coming from the large number of fake Chinese coins it produces. Many of these coins are replicas of ancient Chinese coins. There is a strong demand for them at flea markets and in tourist zones. Jinghuashei does an active wholesale business in fake Chinese coins, most of which are sold within China itself.
Some of the photos Jinghuashei provided of his storefront operation, the Big Tree Temple Coin Shop, depict fake Chinese artifacts, but he says that some of the goods for sale in the shop are produced by other counterfeiters.
Also evident in photos he provided are what appear to be slabs similar to ANACS slabs, and containing fake U.S. coins. When queried about the slabs in this photo, he became very wary.
“They’re not mine,” he said.
After examining the image, an ANACS spokesman noted the gasket used in the holder is black and does not properly fit the coin. He said ANACS has never used a black gasket in its holders. While the holder appears to mimic some ANACS holders, it does not appear to be an exact copy. All of the slabs in the image carry the same information on the grading tab and all of the coins are counterfeit 1877-CC Trade dollars. The number used is for a coin of a different denomination graded by ANACS in 2005.
Asked whether he has the capability of making “replica” Professional Coin Grading Service slabs, Jinghuashei repeatedly responds that he is not intentionally deceiving anybody with his coins. He insists that he sells them openly and clearly as “replicas,” but if other people do dishonest things with them, that is not his fault.
The subject of fake PCGS slabs generates an interesting response from Jinghuashei. He vehemently denies having anything to do with fake PCGS slabs, claiming that they are “big trouble.”
But during a recent conversation where fake PCGS slabs were the topic of discussion, a photo alert popped up in the instant messenger chat program. The photo shows a 1916 Chinese silver coin in a PCGS slab. Asked if the slab is genuine, he said, “Yes, and the coin is, too. I collect silver Chinese coins myself.”
Jinghuashei has been branching out in recent weeks, listing on eBay entire collections of fake U.S. Trade dollars, Morgan dollars, Barber half dollars and other larger diameter “silver” coins.
These collections are already housed in what appear to be Dansco albums. Asked if the albums are also fake, Jinghuashei responds: “Of course!”
Like most Chinese businessmen in the counterfeiting industry, Jinghuashei takes great pride in producing a fine, high-quality product that is difficult to distinguish from the real thing.
Terminology differs
Terms are specific
By Susan Headley Special to Coin World
Although sometimes the terms describing nongenuine coins are used interchangeably in the numismatic community, each term actually has a narrow, specific meaning to some sources.
A quick primer:
Counterfeit: A coin that is meant to trade at face value and deceive people in ordinary commerce. (Usually does not fool a knowledgeable numismatist.) Sometimes, however, “counterfeit” is used in the same sense as “forgery.”
Replica: Intended to be a replacement for a very rare or expensive coin. Although replicas are usually exact reproductions, they’re not generally meant to deceive the expert. Often sold as “space fillers” for coin albums, they are often made of the same metal as the original.
Copy: Frequently made by museums or for advertising purposes; meant to celebrate or honor a given type, not pass for it. Usually made from the wrong metal alloy.
Forgery: Generally understood to mean a nongenuine coin that is intended to pass as the real thing on the hobby market. Quality varies from poor to extremely deceptive.
Reproduction: Generally the same as a replica, but without the attention to detail. Metal is usually the right color, but not necessarily the proper alloy (e.g. using copper-nickel rather than silver).
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