Cook Islands Stop German "Scammers" From USing Legal Tender

[gmarguli]

Rather interesting story of how some German "Scammers" had the nerve to want to redeem Cook Islands legal tender for face value.

 

These so-called coins are listed in the Krause for $17.50-$22.50 and you can probably buy them for $12-$15. They have a face value of $50, but it appears the face value isn't real.

 

It sounds like the Germans bought these coins up and then the Cook Islands govt went into action to prevent them from cashing them in at face value. I think these and all Cook Islands coins should now be removed from the Krause catalog as it is clear they are not legal tender and therefore, not coins. They're play tokens at best.

 

 

The mystery of the $50 silver coin German scam artists stood to make millions

 

Cook Islanders do not know it, but early last year, a crisis arose which was kept quiet and which has remained unpublicised until now.

 

Such was the urgency that the Minister of Finance of the time relied on the Herald not to publicise the matter. In June, government rushed a much-needed amendment to legislation through all three stages in the house.

 

Those listening to the radio broadcast from parliament may have heard the Leader of the Opposition at the time, Dr Maoate commenting on the “Currency Amendment Bill”

 

He said he saw it as an important Bill to safeguard the revenue of the country. He told the House that coins left the country as souvenirs and that was good for the Cook Islands. Then he dropped a big clue as to the nature of the crisis. He said he heard that some coins had somehow come back to the Cook Islands and payments had been demanded. Then he referred to a few who, “Would come back to a developing country and try to rip us off.” Dr Maoate went on to say, “We may end up with a situation where thousands, maybe a million (dollars) will be lost.”

 

Government officials are unlikely to make the specific details of this matter public and it seems the previous file papers are proving very difficult to locate.

 

The coins Dr maoaate referred to, are $50 silver coins. According to Greta Little of the Numismatic Bureau, the coins involved are the “explorer series, it is a set of $50 silver coins which mark the 500th anniversary of America 1492-1992. They are currently not on display at the bureau. While the face value of the coin is $50, the rise and fall of the price of silver on the market also affects the coin’s true value.

 

Little says that last year, some German collectors whom she decribes as scam artists, tried to “cash in” some of the $50 coins and asked for the money to be sent overseas to them. To verify authenticity, the Mint has to be contacted so the collectors were referred to the Mint. It was suspected the collectors were involved in a scam.They had somehow acquired a lot of the coins at a lower value. Unfortunately, Cook Islands currency legislation did not provide any safeguard against someone wanting to cash them in.

 

In February last year, pressure mounted from the Germans but then the cyclones intervened. The herald understood the Finance Secretary had estimated that the Germans stood to make many millions of dollars. The exact figure was not known. There needed to be a law change or some contingency built into the upcoming budget to provide for a very large payout.

 

Government decided to urgently amend the legislation but at the same time it did not want the Germans to find out about it.

 

The Finance Minister’s office asked the Herald not to publicise the matter at the time.

 

– Charles Pitt

 

Cook Islands Herald

[satootoko]

That story has the smell of an urban legend to me.

 

According to Krause the total estimated mintage of the 500 Years of America seriies was 480,000 (8 "coins" x 60,000 each) with a total face value of $40,800,000. Accumulating enough to make "many millions" ($4-million at a bare minimum) at a profit of .$35+/- per piece, would mean acquiring at least 114,250 of them, or more than 23% of the total mintage.

 

If one group was accumulating nearly a quarter of all the coins minted , the unrepealable laws of supply and demand would have run up the price, and no such run up ever occurred.

 

If they were real coins, the banks could just reissue them as so much money when they were cashed in.

 

That doesn't change my opinion that NCLT are not "coins". I'm convinced that they are all bullion sold at inflated prices by greedy governments, including our own with it's ASE/AGE/APE scams. (Don't hit me - I think bullion collecting is fine for those who enjoy it, I just don't think it should be considered coin collecting.)

[TwoKopeiki]

It appears that the real scam artists are the ruling bodies of Cook Islands. They should have minted the bullion at a One Dollar denomination, so that the value is driven by the price of the metal it's made out of. If they can't support the currency system they've established, perhaps going back to barter would be a better choice for Cook Islands.

 

Just my 2 Kopeiki.

[kuhli-migration]

Didn't this same situation arise with the cheap $5 coins from the Marshall Islands about 10 years ago?? If I remember correctly, they are no longer legal tender in the homeland because they were being bought in the US at $2-3, and returned to the islands to be redeemed for $5 (Marshall Islands currency is on par with the US dollar). Not a major profiteering deal, but it was costing the Marshall Island government some coin (pun intended).

[gmarguli]

I read on some forum that the Marshall Islands will redeem those coins for $5 each. However, you may redeem only one per day.

[shirohniichan]

Little says that last year, some German collectors whom she decribes as scam artists, tried to “cash in” some of the $50 coins and asked for the money to be sent overseas to them. To verify authenticity, the Mint has to be contacted so the collectors were referred to the Mint. It was suspected the collectors were involved in a scam.They had somehow acquired a lot of the coins at a lower value. Unfortunately, Cook Islands currency legislation did not provide any safeguard against someone wanting to cash them in.

 

It's "unfortunate" that the Cook Islands did not write laws making it possible to redeem its own currency at face value?!

 

If the government does not want to live up to its fiduciary obligations, why should it call those who want it to own up "scammers"? Rather ironic, is it not?