Yesterday I was shown an interesting dated 2000 AD 1/10 ounce AGW US gold eagle here in my coin shop in Utah. The diameter was correct. The weight was correct. The thickness appeared to be correct (I did not measure it). All the details appeAred quite correct with one exception. The coin was struck slightly off center on each side. The dies were slightly smaller than they should have been, but looked very good in all details.

I did not test for gold content, but it looked like gold to me, at least on the surface and did not appear to be plate, maybe thick plate. The woman said she had four more, but thought maybe they had been stolen. She had no idea of their pedigree, or was not telling. The slightly under sized dies and being off centered should be a tip the coin was a counterfeit, however, I suspect it was good enough to pass coin shops now and then, and more likely yet to pass pawn shops. It would have been interesting to cut the coin. It really looked correct to me in thickness, so I am suspicious it might have had a compressed tungsten granule core.

No gold coins with compressed tungsten granule cores have been published that I am aware of, though there are rumors of such in Krugerands. Compressed tungsten granules are about the only way to get correct density to imitate gold without high cost. If certain interests in China are marketing fake gold coins now with compressed tungsten granule cores (which has the same density as gold), it will soon wreak havoc upon the gold coin and gold bullion markets.

If the dies had not been undersized, it could have passed me as good without deep analysis / lab work. I thought I could see very light indications the coin had some sort of core, under magnification, but not enough I was sure.

Alan Van Arsdale

We have just seen within the past several days on eBay a forged subsidiary silver US coin of Asian manufacture (a farily common US Bust Dime). This was, I believe, one of the first times we've seen

such a small creature. For the past year subsidiary small denomination Canadian Victorian and rare George V silver coins have been forged (including the easy to fake ICCS holders as well) all to the dismay of Canadian numismatists. I'm also seeing some fractional denomination old Korean coins currently being forged in Malaysia and dumped into US numismatic markets without suspicion. To me, this newly seen US item is evidence of a willingness of forgers to get into forging in small denomination coins those that they haven't been involved before. Such brazen outlook is a change in perception of just following where profit in the coin business lies.

Compressed tungsten granules or powder, held in solid form using a polymer type of binder in a matrix clad with gold on both surfaces and rolled to the correct thickness (with the correct average density

of gold coin or gold bullion coin) with an applied edge band - all similar to the Sheffield Plate way of making forgeries - would wreak havoc on bullion markets if such was skillfully done (tungsten has a very high melting point and most commercial furnaces/kilns are about 1000 degrees Celsius short!).

Compressing powdered metal with a matrix as binder is described by Dr. Ilya Prokopov as 'cold pressing' - per his terminology. In my opinion, diffusion and dissemination of this technology is just a

matter of time. The networks of organized crime and trafficking in forgeries, looted antiquities and artwork, contraband and money laundering are already in place for many decades.

Additionally, bullion items could have cores removed from edge drilling, milling into two pieces similar to magician's coins or sewn in half and reassembled upon having the interiors hollowed-out and replaced with the surrogate matrix.

Such debased coin or bullion item could be done profitably as the POG rises with fiat currency printing presses running amok to stave off recession.

A tungsten based matrix looks like a viable alternative to get the correct density of gold (for instance a .900 fine gold coin has a density of 17.18-17.20 gms/cc and pure tungsten with a density of

19.25 gms/cc, so deploying a matrix with a specific gravity of much less could be used to hold all into a rigid core). With an applied veneer of gold in the correct fineness and die struck, all would be appear fairly convincing.

Without being an alarmist, I think we're potentially looking at a major crisis over the next few years as gold demand likely will increase. Furthermore, at present, there is a worldwide shortage of tungsten, but a mine in Canada is expected to re-open due to the shortage and raising raw material prices and a new one in Viet Nam is expected to open next year. Perhaps to the dismay of western numismatists, Vietnamese counterfeiters may get a leg up on the competition. I would expect Asian counterfeiters to be one of the first to use this technology.

A willingness already exists to forge small denomination bullion items. 1/10 OZ US gold Eagles would be no exception and in my opinion is consistent with the profit level seen in other numismatically collectible items.

REgards, Paul.

Tungsten is cheap, around $65 per ton of concentrate now.

http://www.azom.com/details.asp?ArticleID=1201

Tungsten has the highest melting point of any element except carbon. This presents a problem to most forgers, but certainly not all. There are companies, including in China, which could be legally

contracted to provide blanks of tungsten for use as cores in fake gold or platibnum coins or bullion items. Of the same density as the gold in the coins or bullion items. In the IBSCC BOC there is a published gold bar which appeared good from the outside, but had been modified so that is was tungsten on the inside. They show a picture of it cut open to reveal the tungsten inside.

Another possible method is to float tungsten in liquid gold and pour fourree cores from the mix.

I tend to believe the persistent rumors of tungsten core krugerands, though they have not been published, I have read nespaper and other articles about fake krugerands in which it was not disclosed exactly what sort of fakes they were, but they were very deceptive.

In the 1800's platinum was often used by forgers in making counterfeit gold coins. That does not work now, as platinum is now more valuable than gold. I do not believe there is anything else now except tungsten which is practical to make fake high purity gold items which have the correct density.

Tungsten core fake gold items could easily pass most aspects of the markets now, including precious metal refineries (once anyway, then they would be more careful, and likely not report the problem so

as to not "create a panic", such policies so well entrenched in markets are one of the frauds best friends). Anyone using tungsten cores to defraud, would be making a lot of money, and would be careful to keep the information away from the public as long as possible. They would target items not likely to bemelted, buyers not likely to report the problem publicly if they uncovered tungsten cores (frauds usually know very well which buyers lack civic responsibility), and items not likely to be suspected, such as 1/10 ounce US gold eagles.

I handle 1/10 ounce golod eagles pretty often, and I think this one had the correct thickness. I was surprised at the quality of the transfer, it could have passed me had it been of correct size. And keep in mind, it is not hard to make transfer dies of the correct size now, with modern casting and other methods. As there is no responsible party in the World now, to purchasesuch items, cut them open, and make the results public in case any tungsten cores are found, organized crime doing this now already has amassed considerable wealth at it. Even if they are at some point publicly exposed and better supressed, they wioll have considerable funds from this criminal activity which can be used for all manner of other criminals activities potentially, including numismatics forgery and coutnerfeit currency operations.

I suspect the 1/10 ounce gold eagle I saw was of North Korean manufacture. I think any other forgers any place in the World, if they could get tungsten cores in their hands, they would use modern

methods and not be using undersized dies. Only the North Koreans, in my estimation, would have such a mixture of high technology (access to hot furnaces and very high quality casting methods, but with contraction upon cooling of the metal), and incompetence. The 1/10 ounce eagle was dated 2000, likely the year it was made. I would expect the deficiency has since been corrected, which would not be difficult for anyone who could make a product that deceptive int he first place, and that the markets are now rife with tungsten core 1/10 ounce gold eagles which can fool pretty much anyone who does not cut them open, dated 2001 and / or later. I would suspect 2000 was the first year they did it, and in 2001 they corrected their mistake. I doubt most dealers in these

would have even noticed the small amount the dies were small by, but then I am not as oblivious to forgeries as most dealers in US gold bullion.

I have good evidence large amounts of highly deceptive modern gold bullion is being marketed in the US by organized crime with Asian (including Chinese) and US members on the "team". I suspect

some of this fake gold bullion, all items unlikely to ever be refined or cut open, has tungsten cores. What I find very alarming, is I could not be sure by the surfaces this coin had a core at all, and it was a small coin, so harder to conceal the core. I believe it had a core, but I never would have suspected without the dies being slightly undersized and off center. I also believe it had a core of some type I have never encountered before, and of density the same, or very close, to the gold.

So I am now going on the assumption, based upon a large body of evidence, but with no single proof of my assumption, that the markets for modern gold bullion, of types unlikely to be melted or cut open, have been being steadily contaminated with forgeries for about six years now globally. These being of correct density and of good enough quality they are not often being detected, and when they

are being detected, they are not being properly published. There was a law suit around fake krugerands which were so deceptive they were only detected when one was cut open, and had passed expert scrutiny. I believe they were tungsten cored, but this information was not quite made public.

Unless the gold and platinum bullion markets become more responsible to their clients than now, and start buying gold and platinum bullion modern coins from the markets, cutting them open, and making the results public, there will within about four years be a major disaster. Of such proprtions, it will be hard to even trade gold and platinum bullion items of any type. I also have reasons to suspect, that North Korea, and any other groups in this trade, are stock piling precious metal in a sort of substitution process for fake metal. So I am guessing they do nto expect gold to go down as a result of the inevitable major scandal which will erupt once the public becomes aware of what has happened, and the general lack of competency in the gold bullion industry to protect the public from such crime, not to mention the general lack of competency of law enforcement agencies globally to protect the public from this massive defrauding on a global scale. There are certain low issue modern gold bullion items, which have appeared on the markets in numbers larger than they were officially minted in. It took some effort on my part, but I have actually determined this to be true. The fakes, passing some dealers, or be intentionally marketed by them, which are considered in the trade to be of the highest reputation / reputability.

Examining some of these fakes (that is I know there are fakes in the type as they have appeared in numbers greater than they were minted in, and mint corruption can not be the factor in all cases,

too many countries involved and too reliable of ones for them to all have mint corruption), the fakes seem almost undetectable to me, by visual examination alone, without population studies. That is, the fakes are so good, I can detect them only by population studies in which I am examining a fairly large number of fakes and authentic issues mixed together. Subtle differences in the surfaces, official mint packaging etc...

The powers behind this, make eBay power frauds look like minnows in the World of organized crime. I have reasons to believe that they have been behind some of the efforts to supress my opinions and public exposure of my opinions. I have been working on all this for some years already, and it has been about four years since I first posted my suspicions to the CFDL (and the reaction was

immediate and intense, with both Russian and Chinese hackers employed against us). There were also attempts on the CFDL to discredit the possibility, which were of course patently absurd, as there is no doubt tungsten core gold bullion items of correct density are a very real possibility.

I suspect the premium paid by gold refineries in recent years, for after melt versus pre melt on bullion, actually reflects insider industry knowledge of such danger. I never encountered this premium in the 1980's or 1990' when selling gold to refiners. They always seemed very confident based upon surface testing and density testing until recent years. I have also noticed that corruption in the US among gold refiners has become epidemic in this millenium, with reported gold purities, in my opinion even with the "most reputable" or refiners, usually running about 6% to 10% less than the actual purity. I have demanded returns, and tested the gold, and found that the returned gold was in fact of higher purity than claimed by the refiner.

So by my estimation, reputable refiners are stealing about 4% from the precious metals markets now (there are a few honest refiners left). And something like 2% of the gold bullion in the markets is

fake already, or will soon be fake. Much higher than that on eBay, and whatever is dumped on eBay, eventually trickles into every market (and into my coin store, where I get to see eBay fakes in hand). But the more deceptive fake gold modern bullion type coins, trading at some premium to melt value (so unlikely to be melted), are coming in through dealers off of eBay mostly, and only getting to eBay as a secondary market. This way they save on eBay fees, and maintain a lower profile.

My understanding is that it is often amateurs, suspecting "perfectly good" gold coins dealers and experienced collectors / investors would not suspect, cutting open gold coins who are discovering the fraud. That these incidents have been supressed and kept as trade secrets (even at the cost of paying the loss in one case), I consider a major industry corruption which will inevitably do major damage to the credibility of both the bullion and numismatic industries.

This fraud is easily defeated, all it takes it cutting the coins open. Just someone has to be responsible enough, to cut open coins now and then and take the loss on the premium over gold in case

they are good. This actually is a degeneration in the markets, that gold coins are so rarely cut. From ancient times, until recent decades, gold coins were routinely cut open to protect against fourrees, and ironically, with tungsten cores, the danger is higher now than any tiome in history (except that platinum could be used for some time as a gold substitute), as density tests can be defeated. I have encountered very few fake gold coins which are highlyd eceptive in my store. And I suspect this was the first tungsten core I have defeated in my shop. However, protecting my clients interests, I am going to be even more cautious than I have been. If I even see very slight perturbations on modern gold coin surfaces, I will tell the sellers I am not interested to purchase them at this time. In my opinion, it is much better to be safe than sorry. And when the s..t hits the fan, I do not care to share in the blame for what has happened, or to be unable to honor my life time guarantee of authenticity for all coins and bullion items I sell. I am sure many dealers in the markets now, will not be taking returns, once the time honored practice of cutting open gold coins, becomes common place

again. Nor will anyone understand the scope of the problem, until many coins are cut.

One thing I am certain of, is so long as the public is intentionally kept in the dark by the industry, the problem will increase with time dramatically. I also doubt I will ever be shown much gratitude, for being one of the first to sound the public warning, at considerable risk to my life and general well being. The ancient custom of cutting gold coins is pretty much abandoned, but the ancient custom of killing the bearers of bad tidings, is still honored widely. Many an ancient city was taken by invaders unwarned, even with gates open, due to this custom, as the messengers feared to deliver their message. If we fail to learn from history, we are doomed to repeat it.

Best Wishes

Alan Van Arsdale

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