'Expert' coin, gold buyers prove their ignorance
|Published: Wednesday, 25 August 2010 18:17|
by Jerry Jordan
With permission from The ExaminerAnother hotel gold buyer- Gold & Silver Extravaganza of Mississippi- descended on Southeast Texas this past week in hopes of buying precious metals and other items at rock-bottom prices, an investigation discovered. The Examiner has discovered. This marked the fifth such company to do so in the past eight months.
The company set up shop inside a conference room at the Holiday Inn Express near Central Mall. On its first visit, the newspaper brought about $1,500 worth of scrap gold and silver coins and two gold chains to see what the company was willing to pay for the items. The offer-- $315. But after some haggling, the price increased to $355, or about 24 percent of its scrap metal value. On the wholesale market, the items would fetch about $2000, according to similar items found purchased on eBay, U.S. Coin in Houston and Universal Coin and Bullion in Beaumont.
The reporter told the buyer he wanted to think about the offer but that he "had a few gold coins" at his house and would consider bringing those in for and evaluation.
Several hours later the reporter returned to the make-shift office inside the hotel and presented the buyer with three rare gold coins valued at $59,750 and one counterfeit coin that the newspaper uses to determine whether the buyers are 'expert' as they claim in their advertising. Because possessing counterfeit coins is illegal, The Examiner requested and received permission from the U.S. Attorney's Office to use the counterfeit coin for testing purposes only.
The rare coins used for this interaction included a gold 1912 $5 Indian in Mint State 63 (MS63) that had buy offers that day of $1,750; a gold 1911 $5 Indian in MS65 that had buy offers of $14,000; and a 1929 gold $5 Indian in MS64 condition that had a buy offer of $44,000. All of the coins were grade by either NGC ( Numismatic Guarantee Company) or PCGS (Professional Coin Grading Service) and placed in sealed holders. These are the only two industry-recognized coin-grading services in the world.
Deason, who was paying in cash and was not seen providing receipts to customers who sold their items ahead of the reporter, said he was interested in the fold coins but asked how much the reporter was trying to get for them.
Deason also looked at the counterfeit coin and weighed it. However, at that point he did something that no expert would ever do, said Mike Fuljenz. Deason scraped the edge of the coin on a stone to determine its gold content.
"An expert would know instinctively that scraping a rare coin on a testing stone would cause serious damage to the coin and devalue it significantly," Fuljenz said. "But then again, an expert could have looked at your counterfeit and known right away that it was a fake. I think this speaks volumes as to the people who they are claiming to be experts in their advertising and shows they have no training."
After damaging the counterfeit coin, Deason received a return call and provided a final price of $1,200 for all three rare coins. At that point, the reporter identified himself and provided Deason with a document showing the actual wholesale prices of the coins at $59,750. Deason became angry and challenged the value of the coins and then claimed the coins from PCGS and NGC were fakes. Deason, who was still on his cell phone, threw his phone across the table to the reporter because the person on the line, who did not provide his name, wanted to speak with the reporter.
At that point, the reporter began asking questions about why the company offered so little for coins worth tens of thousands of dollars more. The man on the phone also challenged the coins' values but backed off when the reporter explained that he had documentation in-hand verifying the value. The reporter then requested information on whether or not the scales being used by Deason were accurate and if they had been certified and inspected by the Texas Department of Agriculture, as required by state law.
The man said the scales were accurate but could not provide proof that they had been inspected by the state. The scales did not have the state-issued stamp.