In 1911, the United States government established the “Mutilated Coin Programme” as a way to both maintain and manage the pool of available circulation coin. Essentially, a coin is defined as mutilated if it is indistinguishable or unable to be processed by coin operated machines, and the US Mint has an agreed buyback by the pound. Before the advent of this system, only silver and gold coins were exchangeable directly at the mint, or alternatively could be sold to jewelers who would use them in their craft (hence items marked ‘Coin Silver’).
The system functioned as intended for nearly a century, with a small, but steady flow of both base and precious metal content coins finding their way back to the mint. That was, until the early 2000s, when a sudden influx of ‘mutilated’ small change (most notably 10, 25 and 50 cent pieces) began to show up for redemption. Careful analysis of the bullion derived from these shipments showed the presence of impurities which would not be expected in circulation US coin, namely aluminium and silicon. It was soon realized that the fake coins were coming from a number of companies based in the US, and associated in one way or another with one Mr. Xu Qianru. All of the businesses were supposedly involved with the shipping of scrap automobiles to China for recycling.
The claim made by the firms was that the coins that they were submitting for redemption were found in the scrapped autos – a plausible source. As part of the investigation though, it was determined that each vehicle ever shipped from the US to China for recycling would have had to have contained around $900 in lose change. It was also calculated that more half dollars have been submitted by China-sourced vendors in the last decade than have been struck by the US Mint since it’s founding in 1792. Of further note is the testimony from a number of salvage experts and yard managers who consistently said that vehicles are completely stripped before export. Even remaining petrol in gas tanks is recovered before the heap of ferrous metal and plastic is sent off for final breakdown. Though the odd coin might make it through, the vast majority (ie. a $900 hoard) would be removed long before the scrap ever made it to Chinese waters. What is more is that the US Mint has stated, in it’s deposition, that old minting equipment was sold for scrap to a Chinese company in the late 1990s to be disposed of – a directive which might well have never been followed.
This brings us to earlier this year, when the department of Homeland Security seized a total of $5.46 million in assets belonging to various firms associated with Mr. Qianru, as well as a Porsche Cayenne valued at a little over $80 000. One would generally think that the game was up, but no criminal charges were laid, and Mr. Qianru has had the gall to counter sue the US Government for the return of his assets. This banal tale has no discernible end in sight, and if the almost comical series of blunders and oversights which have characterized it up till now are any indication, we will first see a few more unlikely turns before it is finally put to rest.
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