(Santa Ana, California) – Information provided to Northern California law enforcement authorities by Professional Coin Grading Service led to the arrest of a suspect who is now under investigation in connection with the sales of fraudulently altered Morgan dollars in tampered PCGS holders for nearly $300,000.
CLICK TO ENLARGE: These four photographs show a tampered PCGS encapsulation holder with a fraudulent insert. When the holder was cracked open it revealed that it housed the pictured coins, a genuine 1879 and a genuine Carson City Mint dollar that were split in two along the rim to create an "1879-CC." PCGS experts believe the diagnostic evidence indicates the 1879 Morgan dollar used in this case most likely was an 1879-S. (Photo credit: Professional Coin Grading Service.)
"Genuine, common date Morgan dollars were split into two pieces (front and back along the rim), then adhered to each other in combinations to create the illusion of rare date and mintmarks. The coins then were placed in tampered PCGS holders to give the coin credibility in the marketplace and to hide the alterations," said Stephen Mayer, Chief Operating Officer of Collectors Universe, Inc. (NASDAQ: CLCT), parent company of Professional Coin Grading Service.
Among the fraudulent alterations were "1883-S," "1884-S" and "1903-S" that were deceitfully labeled as PCGS MS65, MS63 and MS64, respectively.
After learning about the fakes in late September, Mayer contacted the U.S. Secret Service. Mayer also worked with the Alameda Police Department, providing investigators with detailed information about the altered coins, the altered PCGS holders and six California dealers who purchased or were offered counterfeit or suspicious coins that reportedly were originally offered or sold by the same seller.
Roberto Blas Rodriguez, age 32, of Hayward, California was arrested October 7, 2009 by Alameda Police. He is charged with fraud, suspicion of burglary and violating trademark law, and is free on $45,000 bail.
PCGS was first alerted on September 21 about suspicious coins by Spectrum Numismatics of Irvine, California, a PCGS-authorized dealer.
"They had been offered the coins and immediately recognized that the coins were suspicious. We viewed the coins at our facility in Santa Ana, California, and confirmed the coins and holders had been altered," said Mayer.
Subsequently, Mayer was in contact with five other Northern California dealers who claimed they recently were offered or purchased coins from the suspect, and Mayer supplied the information to investigators. PCGS Senior Numismatist Mike Sargent also assisted investigators with examination of the coins and going to Alameda to assist investigators onsite.
"These are not the same type of fakes as the die-struck Chinese counterfeits that are being offered in the marketplace. This is an entirely different method of counterfeiting, slicing genuine coins in half," explained Sargent.
Mayer commented: "The PCGS-authorized dealers were alert and proactive about the suspicious coins. The information they provided was timely and invaluable. The dealers were able to recognize the altered coins, and their actions enabled us to immediately stop any further distribution of these coins."
Investigators are trying to determine if the suspect manufactured the fakes or was only selling them from another, unknown source either from the United States or elsewhere.
Anyone with additional information that could assist investigators is asked to contact Detective Lorenzo Graham of the Alameda Police Department at (510) 337-8388.
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