The United States Mint has recently learned that some individuals are grinding the rims of Presidential $1 Coins to remove the edge-incused inscriptions and then marketing these altered items as error coins. This practice not only exploits unwary consumers and collectors, but also is a Federal crime.

The United States Mint recently announced that an undetermined number of George Washington Presidential $1 Coins were minted and issued without the required edge-incused inscriptions, "E Pluribus Unum," "In God We Trust," the year of issuance, and the mint mark. Because true error coins such as these can be rare, they often become very attractive among collectors, many of whom are willing to acquire them at a premium above their face value. Apparently, some individuals are exploiting this situation by altering the rims of perfectly good Presidential $1 Coins to make them look like the recent error coins.

Although altering and defacing United States coinage generally is not illegal, doing so violates a Federal criminal statute (18 U.S.C. ? 331) when the act is accompanied by an intent to defraud. Accordingly, a person is committing a Federal crime if he or she intentionally alters an ordinary Presidential $1 Coin to make it look like an error coin for the purpose of selling it at a premium to someone who believes it to be a real error coin. Under this statute, it is also a Federal crime to sell at a premium an ordinary Presidential $1 Coin that one knows has been altered so it looks like an error coin to someone who believes it to be a real error coin. Penalties include a fine and up to five years in prison.

The United States Mint has no Federal enforcement authority. Rather, it refers such matters to the United States Secret Service, which is lawfully authorized to detect and arrest any person who violates a Federal law relating to United States coinage.