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Counterfeit gold dollar in club auction

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I was at a monthly club meeting earlier, and one of the member dealers asked for my opinion on an 1868 gold dollar. It looked a bit like a cast fake to me. Another dealer said it wasn't even a good fake. A collector bid on it to the tune of around $225. I did not want to be aggressive on outing the coin, since the auction people supposedly do their due diligence. How should this problem coin have been addressed? Like the bad penny, these coins keep turning up: https://www.cointalk.com/threads/1868-gold-dollar-deal-or-no-deal.38721/

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My approach would have been to have pulled members of the club leadership aside and quietly explain the problem.

 

I am responsible for the auction at my local club. My rules are that I can be kind of lose about the member grading of auction lots except for the YNs. If one of them or their parents ask me about a lot, I will tell them exactly what I think.

 

I am tough on misattributions, counterfeits, altered coins, and whizzed or polished coins. I have a discussion with the consigner before the auction about those. For example one person had a Clad Proof Ike dollar, that he consigned as a silver Proof. I could tell right away that the color was not right for a Proof, so I pulled the lot from the sale. I confirmed it by looked at the edge and saw the bright copper core. The coin was out of the government packaging.

 

Many years ago I was a member of club when one of the founders was selling counterfeit gold dollars to the club president and anyone else who would buy them. I was in my early 20s at the time, and it took so guts to talk guys who more than twice my age, but I finally told the president that he was getting ripped off. Needless to say I was not very popular for a while with that club founder, but his little counterfeit business came to an end, at least at the club. Later he showed his true colors and made a complete break with club when he took its annual show venue away (a Holiday Inn function room) for his own financial benefit. He got an exclusive contract with the Holiday Inn not to allow anyone, other than himself, to hold coin shows there.

 

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The Danbury club allows members to run raw coins with their "grades" listed in the auction sheet, the other club does not unless an independent company has graded the coin. I would think that the club bylaws of all clubs requires coins to be genuine, and that counterfeits would not be allowed unless indicated. The club holds buying weekends and then runs its purchases at auction over the following months.

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I don't think the belief that "the auction people supposedly do their due diligence" should have anything to do with it, if the coin was counterfeit.

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I emailed one of the guys who runs the auction that several of us saw it as a fake likely and that the guy needs to be contacted so that he can show it to someone who would authenticate it.

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Chris Percoulis of the Carmel coin club (Croton River) got back to me that they notified the new member who bought the counterfeit to have it checked out. And any club or auction company should stand behind the authenticity of raw coins they are selling, though Brian Murphy told me that "Charter Oak" auction refused to refund him when he brought a $2 1/2 Liberty that NGC called counterfeit to the attention of the owner of that company.

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And any club or auction company should stand behind the authenticity of raw coins they are selling, though Brian Murphy told me that "Charter Oak" auction refused to refund him when he brought a $2 1/2 Liberty that NGC called counterfeit to the attention of the owner of that company.

 

I agree that an auction company should stand behind the authenticity of any item they sell, but for a club that gets tough. Most clubs have very limited treasuries that are usually no more than a few thousand dollars. If the club is registered as a nonprofit corporation, that organization can't accumulate very much money its treasury. A few counterfeits could drain the treasury and sink the club.

 

About all a club can do is to mediate between the auction consigner and the buyer. If the consigner does not make good, about all the club can do is give him the boot. Having been through one of those situations, I can tell that is hard too. If the consigner continues to try to sell unmarked counterfeits, he or she should be barred from the auction at a minimum..

 

Having had to deal with such problems as a club officer in the past, I can tell you they are the type thing that can tear a club apart, and make the person who trying to set things straight very unpopular with some club members. Most people shy away from confrontations even when the issue is black and white. That's why taking responsibility as a club officer can be so hard sometimes.

 

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This club recently had $50K in their treasury, though I can understand how standing behind what is sold could be a challenge; in this case it was a club purchased coin, as they have appraisal days when they buy for future club auctions.

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$50k in the treasury.

 

That is unbelievable. Unless the club is a huge organization like FUN, I don't how they are able to be a tax exempt organization and get away with that. Tax exempt organizations are expected to give away the excess to other community activities.

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