Multi-million-dollar caper floods world with perfect counterfeit coins

Press, 23 November 1976, Page 21

Multi-million-dollar caper floods world with perfect counterfeit coins

Fake coins to the value of about $3.6X1 are now scattered about the world as the result of a counterfeiting conspiracy uncovered by the British police. DAVID MAY, of the “Sunday Times,” London, tells the story and its background as revealed in the recent criminal trial in England.

Fake coins, so perfect that they can deceive the most experienced collector, and worth more than 53.6 M, are now scattered throughout the coin world. They are the result of one of the most effective, though at times farcical, counterfeit conspiracies seen in Britain. It was the boom in coin prices during the early 1970 s — in some cases prices quadrupled as investors sought a hedge against inflation — that made it worthwhile to flood the British market with the forgeries.

The scheme’s creator was Harry Stock, a Korean war veteran, airline pilot, sometime priest, gun runner, and confidence trickster. Now a legendary figure in the coin trade, the amiable, soft-talking Stock hurriedly left the United States in 1969 after he had been arrested and bailed on a charge of selling fake gold three-dollar coins. He made his way to Beirut, traditional Western centre of the forging busi-

ness. There he made the acquaintance of a master forger, Said Chalhoub. Chalhoub had perfected a technique for making copies from original coins. Stock took a consignment of Chalhoub’s work to London early in the summer of 1972. He showed gold 1887 and 1893 £5 and £2 pieces, 1827 Sovereigns, and some platinum roubles to a number of London dealers. He eventually sold a quantity of the £5 coins to one of the most prestigious and reputable — Spinks.

He also sold to two young independent dealers, Martin Hulme and Peter Jackson, of Manchester and Stockport. He told both men before he left the country that the coins were copies and suggested that they import them. Their agreement to do so led them, with another eight dealers, into a swindle which ended only this month with prison sentences for the majority at Manchester Crown Court on charges of con-

spiring to forge and utter countefeit; coins. The plan could not be implemented immeaiaetly, however, because Stock, on a second visit to London in 1972, had once again tried to 1 sell Spinks some £5 pieces. They were suspicions that so many good corns were turning up. As one leading London dealer put it: “It is like suddenly finding an auc-

tion that sells 25 Rembrandts a year. It’s just too good io be true.”

Stock spent several months on '•emand in prison, was deported to Beirut, and revived his master plan. Financing the deal, however, was proving difficult for Jackson and Hulme. Eventually they hit on an original — and now illegal — method to pay for the first batches. At that time, in early 1973, European bullion companies were paying up to six times the face value of pre-1947 British silver coins in order to melt them down. Jackson and Hulme ferried huge quantities to Amsterdam. The proceeds were wired to stock, who arranged for forgeries of requested coins to be struck. Once the system was underway the fake gold and silver coins would be smuggled by courier to Schipol airport in Amsterdam where they would be deposited in a left luggage locker to await collection. From Schipol, the favourite route was by ferry to

avoid metal detectors and customs’ questions at airports. In Britain the coins would be passed through a network of dealers and be sold, some of them fetching £6OO to £7OO a time, at coin fairs, to other dealers. Their other method was the “postal auction.” Small advertisements in coin-collecting magazines offered single specimens of rare coins, and invited offers. But the dealers sold at least 20 coins each time to unsuspecting numismatists. Now the coins are known to be fake, the buyers can only recoup the value of the gold or silver — perhaps 10 per cent of what they had to pay. The caper lasted for two years. From 1973 the first year, until 1974 Stock is estimated to have earned £lOO,OOO from the trade. At least 14 different denominations. produced in batches of one hundred at a time, were manufactured for the British market.

Those coms, if genuine, have a minimum value of £500,000. The police in the case believe that the 1400 coins they know about only “represented the tip of the iceberg.” Indeed, the 1977 edition of "CoinMarket Values” — the authoritative collectors' guide — lists no fewer than 29 coins that have been faked. The coins that were sold in Britain included gold and silver guineas, sover eigns, crowns, and half crowns, starting with a 1738 two-guinea piece worth up to £7OO. Be cause the market for higher priced coins —

more than £lOOO — is comparatively limited, they avoided producing those.

The exception was an 1847 Gold Gothic crown. Unfortunately for the forgers only three specimens of their particular crown are known to exist, and no dealer would accept a new one without incontrovertible proof of authenticity. Harry Stock once tried to sell one to a Swiss dealer by claiming it had been stolen from the collection of the late King Farouk and had only recently been put on the market. He failed. “Actually, they flooded the market,” explained Chief Inspector David Gearon who led the counterfeit investigation by Scotland Yard, “and that’s why they had to withdraw from it by 1975. Too many coins were suspect.”

Close co-operation between coin dealers and police throughout Europe, led to the break up of the deal in 1975. Stock, this time posing as an Ameri-

can businessman with Russian trade interests, was picked up selling forged platinum roubles in Zurich. In England, the caper’s moneyman, a Manchester businessman. Jack Walmsley, was arrested and 300 coins recovered. The cheekiest twist came with the anonymous publication of a magazine called “Coin Probe.” It lampooned the coin establishment and the police inquiry, describing the officers as a “numismatically knowledgeless bunch of cretins.” Just a few weeks later six of the magazine’s contributors were to be arrested.