China Continues to Profit from Counterfeit Culture that Jeopardizes Safety and Economy

By Mike Fuljenz, Guest Columnist

Despite assurances that it would crack down on counterfeit goods and intellectual property flowing from its country, the Chinese communist regime continues to reap billions from the sale of fake merchandise and it’s now affecting an area of the U.S. economy that many wouldn’t suspect.

Multiple studies have shown that little appears to significantly stem the tidal wave of bogus goods leaving on cargo ships each and every day from any number of Chinese ports of call or by mail. While most of the public focus has been on tennis shoes, luxury watches, handbags, clothes, cosmetics, cell phones, and computer software, there has also been what some consider a direct attack on the financial markets through the numismatic industry.

In the past few years, I’ve reviewed several customers’ coin collections and sadly detected one or more counterfeit coins. In one instance, the majority of one person’s collection consisted of counterfeit-proof Buffalo one-ounce gold coins, with all coins appearing in what looked like genuine NGC holders. The holders themselves were fraudulent.

Millions of normal circulating U.S. coins, such as quarters and half dollars, as well as bullion and rare collectible coins, have now been counterfeited by Chinese interests. More recently, U.S. law enforcement seized over a million dollars’ worth of counterfeit circulated George Washington quarters believed to have been made in China.

These Chinese counterfeit problems have been sporadically covered in the national press. Three examples:

  • According to Forbes in 2018, counterfeiting is the largest criminal enterprise in the world, greater than illicit drugs or human trafficking. It’s expected to grow to $2.8 trillion by 2022, costing 5.4 million American jobs.
  • In a 2016 interview for CBS Money Watch, titled “China’s Largest Export Boom: Fake Gold Coins,” Kathy Kristof interviewed experts, including me, on the proliferation of Chinese-made counterfeit coins being sold on the internet.
  • Craig Crosby, founder of The Counterfeit Report, has detected millions of knockoffs sold online on eBay, Alibaba, Amazon, and Walmart. He notes that over 80 percent of all counterfeits are made in China.

Earlier this month, Major League Baseball (MLB) expanded its deal with Tencent, one of communist China’s largest tech companies, to live stream MLB games in China. This is the same company that helps to limit free speech of the Chinese people and, in a show of support for dictator Xi Jinping, created a mobile game—Clap for Xi Jinping: An Awesome Speech.

In highlighting MLB’s hypocrisy on human rights, the move came at the same time it pulled the All-Star Game from Atlanta and unbelievably moved it to more voting-restrictive and less-diverse Denver, because of a recent change in Georgia’s voting requirements that seems to help ensure more fair and secure elections.

Sen. Marco Rubio (R-Fla.) on April 2 stated in a tweet, “Dear GOP: @MLB caves to pressure & moves draft & #AllStarGame out of Georgia on the same week they announce a deal with a company backed by the genocidal Communist Party of #China.”

Rep. Dan Crenshaw (R-Texas) also brought into question support of the 2022 Beijing Olympics by President Joe Biden, stating in a tweet, “Hey Joe Biden, you gonna boycott the Beijing Olympics because of mass genocide? Or are you just into hurting Atlanta small businesses that were planning on the all-star game?”

It’s well known that the online sales platform “Wish,” which sources most products from China, was rife with counterfeits, yet the NBA’s Los Angeles Lakers accepted $36 million (less than LeBron James’s annual salary) to adorn the Lakers uniform with a large “Wish” logo for a three-year period. This comes from a league that seemingly discourages players or executives from criticizing Chinese humanitarian and labor practices or taking a stand against China’s authoritarian acts to usurp a democratic Hong Kong. Then there’s China’s alleged mistreatment of the Uyghur community.

Of course, the actions of the communist Chinese regime don’t reflect on the many fine Chinese Americans and their families, some of whom are my friends.

I taught counterfeit detection courses for the American Numismatic Association and served on the National Anti-Counterfeiting Task Force. My associate, an award-winning investigative reporter, ordered numerous coins and bars from the Wish platform over the past two years. Thankfully, they were very cheap, but they were all obvious fakes from Chinese vendors, and all were delivered by the U.S. Postal Service.

Out of many test orders, here are several examples.

There was a “Credit Suisse 1-ounce Gold Bar” costing $2, plus $3 shipping. It would have been worth $1,500 when he ordered it and nearly $1,900 today, but it’s essentially worthless because it was fake. He also ordered an 1899 “Queen Morgan Silver Dolar” (sic)—that would have graded XF (Extra Fine) and been worth $140—for just $3.89 shipping. The counterfeit coin was listed at no charge. Then he ordered a gold coin that would have been worth $10 million if it were genuine—a 1933 St. Gaudens Double Eagle—but it sold for $1.83, plus $2 shipping, so you can’t fault them for greed.

They chose some extremely valuable coins and sold the knockoffs for a ridiculously low price. But none of these fake coins had the word “COPY” stamped on them, as is required by the updated 2014 U.S. Hobby Protection Law for counterfeits.

On March 2, 2020, H.R.6058 (dubbed the “Shop Safe Act of 2020”) was introduced in the House of Representatives. It would amend the “Trademark Act of 1946” to give certain e-commerce platforms contributory liability when counterfeits are sold that pose a health risk to consumers. The key phrase is “health risk,” which seems to shut coins and some other important products out of the equation, even though some fake coins and precious metals coming from China contain traces of cyanide, which could pose a significant health risk.

Counterfeit products can rob Americans of their life savings, which is an indirect health risk, or can cause machinery to malfunction at high speed, which can cause sudden death. The Federal Aviation Administration estimates that 520,000 counterfeit or unapproved parts are installed in aircraft each year, and U.S. military aircraft are reportedly “riddled with counterfeit parts,” around 70 percent of which come from China.

Beyond that, however, I believe it should cover all counterfeit products, which are almost unbelievably common. Last year, the Canadian Broadcasting Corp. (CBC) bought a random sample of dozens of products from common online platforms such as Wish, AliExpress, Amazon, eBay, and Walmart.

They found counterfeits on all of these platforms, and over half of the products they bought were fake.

Some of the health dangers included alarming amounts of heavy metals in health and beauty products. One lipstick had 751 times the amount of lead that Health Canada considered acceptable for cosmetics. As scientists have shown, lead affects a person’s cognitive ability, and it’s especially dangerous for children.

Experts interviewed by the CBC were concerned not just about the health issues related to counterfeiting.

“All of that money is used illegitimately to support other criminal activity,” Lorrie Turner, legal counsel and senior vice president of brand protection for headwear brand New Era Cap Co., told the CBC. “While you may think it’s just an individual trying to earn money, ultimately all of that money goes toward nefarious things.”

Interpol states on its website that “there is a clear link between illicit trade and other types of crime, such as human trafficking, drug trafficking, corruption, bribery and money laundering.”

For our purposes, leaders in the numismatic community will work hard to see that this bill is modified and reintroduced in 2021 so that it would cover counterfeit coins, most of which are made and delivered from China. Specifically, we would like to see it contain a reference to the Hobby Protection Act, as amended in 2014, to cover counterfeit coins.

Mike Fuljenz has taught counterfeit detection and anti-fraud seminars for the American Numismatic Association and the Numismatic Crime Information Center. He is recognized by the U.S. Patent and Trademark Office as “America’s Gold Expert,” and his expertise has led him to be utilized as a consultant for the U.S. Federal Trade Commission, the U.S. Mint, the attorney general of Texas, and the Royal Canadian Mint.

Brit Featherston Appointed United States Attorney for the Eastern District of Texas

BEAUMONT, Texas – Brit Featherston has taken the oath of office to become the United States Attorney for the Eastern District of Texas. Featherston was appointed to the position by Attorney General Merrick Garland and took the oath of office from Chief U.S. District Judge Rodney Gilstrap.

“This is my home; serving and protecting the great citizens of East Texas has been my priority for a long time and it will continue into the future,” said U.S. Attorney Featherston.  “I am blessed to work with a dedicated team of professionals who make it their daily mission to protect the citizens of this great country.  I also look forward to jointly working with our law enforcement partners who bravely protect our communities every day.”

Featherston, 61, of Lumberton, is the chief federal law enforcement official in the Eastern District of Texas, which includes 43 counties stretching from the Oklahoma border to the Gulf of Mexico. The district includes six fully staffed offices in Beaumont, Plano, Tyler, Sherman, Texarkana, and Lufkin with 120 employees, including 60 prosecutors.  Featherston is responsible for the prosecution of federal criminal offenses in the district and will represent the United States in all civil litigation in the district.

Since joining the office in 1996, Featherston has served in the capacity of First Assistant U.S. Attorney, Executive Assistant U.S. Attorney, and supervisory U.S. Attorney.  He was also appointed Acting United States Attorney in September 2016 and served in that capacity for 17 months.  In January 2018, Featherston became the Justice Attaché for the U.S. Embassy in Kabul, Afghanistan.  In addition to prosecuting high-profile cases such as the dragging death of James Byrd, Jr., in Jasper County, Featherston has been instrumental in crisis management operations during numerous Southeast Texas hurricanes, as well as assisting in the establishment of a command post and the investigation and prosecution of crimes related to the space shuttle crash in 2003 in Lufkin.

Featherston was honored to have former United States Attorney Malcolm Bales and his brother, Tom Featherston, by his side as he took his oath of office from Judge Gilstrap this afternoon.  Wife, Amy, and son, Ben, joined the ceremony by video from Texas Children’s Hospital in Houston where Ben has been in ICU since Sep. 30th recovering from a sudden illness.  Ben is a freshman at the University of Texas at Austin and daughter, Anna, is a senior at Texas A&M University in College Station.

AFTERMATH: Photos from Orange in the wake of Hurricane Laura

By Jerry Jordan, Editor

ORANGE, Tx. — Downed trees were a common theme in Orange, Tx. as the town is still surrounded by the tall pine timbers that helped it become a major player in the lumber industry during the late 1800’s. Sadly, many of those trees were toppled by Hurricane Laura, laying them across and through dozens of homes in the community of about 19,000 people.

On Saturday, President Donald J. Trump toured the area and stopped to make brief remarks about America’s resilience and promised to help rebuild Southeast Texas, Southwest Louisiana and other areas impacted by the strongest storm to strike the Gulf Coast in more than a century.

WHITE HOUSE LIVE VIDEO:

“We love this state,” Trump told the crowd. “We are here to help. We are working to get Texas everything it needs and we will bring it back.”

Trump said both Texas was lucky with the path of Hurricane Laura and even Louisiana could have been worse as the storm’s strong winds dropped in intensity. He said FEMA has already delivered 250,000 meals to both states and that power companies are working with Entergy to restore power, as quickly as possible.

Governor Greg Abbott commended the President’s administration in responding to the needs of Texas, saying “of all the storms I have been through, I have never received a swifter response.”

Governor Abbott and President Trump have jointly declared a state of emergency in 62 Texas counties. There are 19 distribution points across the region with food, MREs and water for residents affected by the storm. 

AFTERMATH: Photos from Port Arthur in the wake of Hurricane Laura

By Jerry Jordan, Editor

PORT ARTHUR, Tx. — Hurricane Laura made landfall with 150 mph winds less than 40 miles east of this town of 54,000 people, leaving hundreds of homes and dozens of businesses damaged in its wake. As flares burned from one of the nation’s largest refineries – Motiva Enterprises – being in shutdown mode due to power outages, residents sifted through debris, avoided downed power lines and tried to pick up the pieces of a continued attack by Mother Nature over the past 15 years.

Hurricane Rita devastated Port Arthur in 2005, then Hurricane Ike struck in 2008. Since then, there has been tropical storms and hurricanes of varying strength but Hurricane Laura is the strongest storm to hit the Gulf Coast in more than a century.

AFTERMATH: Photos from Cameron Parish in the wake of Hurricane Laura

By Jerry Jordan, Editor

CAMERON PARISH, La. — On the morning after Hurricane Laura ripped through Southwest Louisiana, causing massive devastation, it was mostly journalists entering coastal communities to relay the damage to those who heeded mandatory evacuation orders and took safety elsewhere.

With winds of 150 mph at landfall, Hurricane Laura carved a path from the Gulf Coast from Louisiana into Texas and north to Arkansas. It came in as a Category 4 storm, the strongest ever to strike Louisiana in more than 100 years, and it will likely take years before the region recovers. So far, the death toll stands at six, as emergency crews continue to fly aerial search and rescue missions looking for those who may have tried to ride out the storm in their homes.

Southeast Texas on alert for Hurricane Laura’s impact

By Jerry Jordan, Editor

BEAUMONT, Tx. — Residents in Southeast Texas are preparing for the strongest hurricane to hit the region since Hurricane Rita in 2005 when high winds caused severe damage to the area’s infrastructure.

Hurricane Laura is predicted to make landfall sometime around 1 a.m. Thursday morning with a bullseye basically on Beaumont as a Category 3 storm, bringing with it a storm surge and minimum sustained winds of 111 mph. Category 3 storms range between 111 mph and 129 mph.

At 4 a,m, Wednesday, Hurricane Laura had reached 110 mph sustained winds and the track still has it hitting Southeast Texas late tonight or early Thursday.

The first mandatory evacuation order went into effect at 6 a.m. Tuesday morning in Orange County. Jefferson County followed up with a mandatory evacuation order that went into effect 30-minutes later. Hardin County Judge, Wayne McDaniel, called for a voluntary order at noon but by 2 p.m., he had changed the order to a mandatory evacuation.

Early Tuesday morning, a line of traffic was already starting to form and citizens were filling up their cars

NOTABLE LINKS FOR HURRICANE INFORMATION:

National Hurricane Center: https://www.nhc.noaa.gov/

Multiple Weather Links at Mike’s Weather Page: https://spaghettimodels.com/

TXDOT Emergency Evacuation Routes: http://gis-txdot.opendata.arcgis.com/datasets/txdot-evacuation-routes

TXDOT’s Drive Texas website for road conditions: https://drivetexas.org/#/11/30.3644/-94.3054?future=false

For updates and other evacuation information: SETINFO.ORG

EDITOR’S NOTE: We will be updating throughout the storm with information, photos and videos of the Southeast Texas region. Everyone, please stay safe!