counterfeit legal in China
By Susan Headley
U.S., world and Chinese coins worldwide
Liu Ciyun (who prefers to be known by his eBay
handle, “Jinghuashei”) is a typical young
upwardly-mobile Chinese suburbanite. Married,
with a 2-year-old son, Jinghuashei has worked
hard the past few years to build a business.
Like most legitimate businessmen, Jinghuashei
operates within the laws of his country, and has
earned official certification for his small
production facility, which employs up to 30
people. The products he sells are properly
licensed, where appropriate, and absolutely, 100
percent legal to produce and sell in China.
The only fault that most Americans might find
with Jinghuashei’s business model is that he is
in the business of producing counterfeit coins.
Jinghuashei’s company is called the Big Tree
Coin Factory. It is located in the Fujian (also
known as Fukien) province in the southeast
portion of the People’s Republic of China. This
area is well known to be a hotbed of
counterfeiting activity and Jinghuashei
acknowledges being aware of approximately 100
competitors who are manufacturing fake coins.
Jinghuashei says that his coin factory is
probably the largest of its type in China. It
produces in excess of 100,000 fake coins per
month for Chinese coin types alone.
He says he is currently only selling about 1,000
counterfeit U.S. coins per month, mostly on
eBay. His primary motivation for servicing this
comparatively small volume business is that he
is making contacts with people he hopes will
come to China to buy counterfeit coins on a
Jinghuashei also claims a sales volume of
several thousand counterfeit coins per month in
world coin types.
Jinghuashei is forthcoming about his business
practices. He is certain that he is operating
legally in China, which requires that the coins
he makes are dated 1949 or earlier. As long as
he sticks to this one important regulation and
maintains his business certification (license),
he says he has nothing to fear from the
authorities in China.
But what about the United States of America?
Isn’t he worried that the Secret Service or some
other U.S. government agency will come after him
for making counterfeit U.S. coins? After all,
the coins struck by the U.S. Mint, regardless of
date, are all still legal tender, and thus
subject to U.S. coin counterfeiting laws. It is
illegal for him to sell these coins in the
United States, even via eBay.
Jinghuashei responds by claiming that he is
operating within the confines of the Hobby
Protection Act, a U.S. law that requires all
nongenuine numismatic items produced after 1973
to be permanently and conspicuously
counterstamped with the word COPY. When informed
that his eBay auctions are not in compliance
with this law, because he is using a punch that
says REPLICA, he seems unconcerned.
Despite numerous online chats and e-mail
exchanges with him in which the U.S. law has
been discussed, Jinghuashei still hasn’t changed
his punch to be in compliance.
Although he has never said it outright, it is
apparent he feels invulnerable to U.S. law
enforcement because they are unlikely to go all
the way to China to prosecute him for the
relatively small sums of money his eBay sales
The word “replica” was used in conversations
with and questions of Jinghuashei since that is
the term he prefers and he appears to be more
open to talking than if the terms “counterfeit”
or “fake” are used.
Jinghuashei acknowledges that the minting
equipment currently used in his Big Tree Coin
Factory is old and the images he provided show a
cramped and dirty environment. But that helps to
keep Big Tree’s coin manufacturing costs very
low. He says he has access to more modern
presses when he needs them.
Jinghuashei says it costs him only 8 cents each
to produce each fake Chinese coin using
iron-based planchets. Counterfeit U.S. coins
cost more – an average of 50 cents each –
because the copper and nickel planchet alloys
cost him more to make. Jinghuashei says these
figures include his entire expense, including
materials, labor and marketing.
On eBay, Jinghuashei’s single-coin auctions are
usually listed with a starting price of 5 or 10
cents, and they usually close around those
prices when he gets a buyer.
Asked how he makes a profit if it costs 50 cents
each to make his coins, he explains that he
makes most of his profit from the shipping
expense he collects from buyers.
This is a common practice with China-based
sellers on eBay. They sell the item very
cheaply, but then charge as much as $70 or more
for shipping. Doing this serves two useful
functions. First, their Final Value Fee expense
is minimal, since eBay bases this fee on the
auction’s closing price. Secondly, if an item is
returned to the seller for some reason, the
buyer can only recover that minimal bid amount
since shipping and handling is typically
Most of the Big Tree Coin Factory’s current
profits are coming from the large number of fake
Chinese coins it produces. Many of these coins
are replicas of ancient Chinese coins. There is
a strong demand for them at flea markets and in
tourist zones. Jinghuashei does an active
wholesale business in fake Chinese coins, most
of which are sold within China itself.
Some of the photos Jinghuashei provided of his
storefront operation, the Big Tree Temple Coin
Shop, depict fake Chinese artifacts, but he says
that some of the goods for sale in the shop are
produced by other counterfeiters.
Also evident in photos he provided are what
appear to be slabs similar to ANACS slabs, and
containing fake U.S. coins. When queried about
the slabs in this photo, he became very wary.
“They’re not mine,” he said.
After examining the image, an ANACS spokesman
noted the gasket used in the holder is black and
does not properly fit the coin. He said ANACS
has never used a black gasket in its holders.
While the holder appears to mimic some ANACS
holders, it does not appear to be an exact copy.
All of the slabs in the image carry the same
information on the grading tab and all of the
coins are counterfeit 1877-CC Trade dollars. The
number used is for a coin of a different
denomination graded by ANACS in 2005.
Asked whether he has the capability of making
“replica” Professional Coin Grading Service
slabs, Jinghuashei repeatedly responds that he
is not intentionally deceiving anybody with his
coins. He insists that he sells them openly and
clearly as “replicas,” but if other people do
dishonest things with them, that is not his
The subject of fake PCGS slabs generates an
interesting response from Jinghuashei. He
vehemently denies having anything to do with
fake PCGS slabs, claiming that they are “big
But during a recent conversation where fake PCGS
slabs were the topic of discussion, a photo
alert popped up in the instant messenger chat
program. The photo shows a 1916 Chinese silver
coin in a PCGS slab. Asked if the slab is
genuine, he said, “Yes, and the coin is, too. I
collect silver Chinese coins myself.”
Jinghuashei has been branching out in recent
weeks, listing on eBay entire collections of
fake U.S. Trade dollars, Morgan dollars, Barber
half dollars and other larger diameter “silver”
These collections are already housed in what
appear to be Dansco albums. Asked if the albums
are also fake, Jinghuashei responds: “Of
Like most Chinese businessmen in the
counterfeiting industry, Jinghuashei takes great
pride in producing a fine, high-quality product
that is difficult to distinguish from the real
Terms are specific
By Susan Headley Special to Coin World
Although sometimes the terms describing
nongenuine coins are used interchangeably in the
numismatic community, each term actually has a
narrow, specific meaning to some sources.
A quick primer:
Counterfeit: A coin that is meant to trade at
face value and deceive people in ordinary
commerce. (Usually does not fool a knowledgeable
numismatist.) Sometimes, however, “counterfeit”
is used in the same sense as “forgery.”
Replica: Intended to be a replacement for a very
rare or expensive coin. Although replicas are
usually exact reproductions, they’re not
generally meant to deceive the expert. Often
sold as “space fillers” for coin albums, they
are often made of the same metal as the
Copy: Frequently made by museums or for
advertising purposes; meant to celebrate or
honor a given type, not pass for it. Usually
made from the wrong metal alloy.
Forgery: Generally understood to mean a
nongenuine coin that is intended to pass as the
real thing on the hobby market. Quality varies
from poor to extremely deceptive.
Reproduction: Generally the same as a replica,
but without the attention to detail. Metal is
usually the right color, but not necessarily the
proper alloy (e.g. using copper-nickel rather
Last week we met Liu Ciyun (who prefers to go by
his eBay handle, "Jinghuashei"), a 26-year-old
Chinese coin counterfeiter who owns his own coin
minting facility, the Big Tree Coin Factory.
Jinghuashei is very open about what he does
because he says his business is completely legal
in China, as long as the coins he fakes are
dated prior to 1949.
In preparing to write about Jinghuashei and his
counterfeiting operation, Coin World procured
some of Jinghuashei’s fake U.S. coins.
Although they look quite deceptive in the
photographs, the only way to truly judge a coin
is to hold it in your own hand.
Jinghuashei agreed to leave off the REPLICA
counterstamp that he says he usually applies to
He was told Coin World would test his coins and
also that eventually they may be placed on
display so that other collectors could learn
about his fine coin “replica” work.
The 12 coins purchased from Jinghuashei are
shown at actual size with an accompanying chart
listing weights and the results of a specific
gravity test conducted on each in Coin World’s
Jinghuashei’s 1909-S Lincoln, V.D.B. cent
appears to be the most deceptive. Most of the
rest of his coins are very good counterfeits as
well, but they also look “just struck” (which,
of course, they are)!
All that would be needed to make Jinghuashei’s
coins really scary fakes would be to “process”
them in a rock tumbler or maybe dip them in some
weak acids, to “age” them somewhat and take the
sharpness off the edges.
While Jinghuashei’s coins may not fool
counterfeit coin detection experts such as
Michael Fahey, there is a strong likelihood the
average collector may accept these coins without
question, especially if he or she does not
possess advanced knowledge of diagnostics of the
Asked how he manages to produce such convincing
counterfeits, Jinghuashei explains that he uses
genuine examples for his models.
He downloads digital information about the
genuine coin into a computerized coin
sculpturing system via laser beam input. The
laser system scans the coin using a method of
triangulation, taking constant readings from
thousands of different data points, producing a
three-dimensional model of the coin that is
If needed he has the ability to “clean up” the
digital model to remove blemishes or
distinguishing diagnostics that were on the
original coin such as contact marks, die chips,
die polishing marks or even flow lines on the
He noted that everything is done with a view to
making the die that is produced as spotless as
possible so that nothing will give away the coin
struck from it as a counterfeit.
The next step in the process is to render the
three-dimensional computer file into an actual
coin die. A laser die-cutting process carves the
coin image into the steel surface, which is
added to a base (die shank) and then the dies
are ready to be placed into the coin presses to
strike actual pieces.
Jinghuashei couldn’t be too specific about some
of these processes, and eventually admitted that
he has the dies made in another shop that
specializes in this type of work.
The coins that are produced appear in every way
identical to the genuine coin used as a model
except where the improvements were made in
cleaning things up in the three-dimensional
The Big Tree Coin Factory has a variety of coin
presses, ranging from modern automatic machines
that strike many coins very quickly, to
old-style hand-operated presses that strike
coins one at a time.
The reason for this, according to Jinghuashei,
is that by using the original coin presses that
were used to produce the very old coins (e.g.
19th century types), the counterfeit that is
produced is much more likely to be just like the
The biggest challenge Jinghuashei currently
faces is in getting proper planchet stock. He
does not mix the metal alloys in his mint, so he
must buy rolled stock from others, who are not
getting the alloy correct most of the time. This
causes the coins to be overweight or
underweight, and also to be the wrong color
He says he can use cheap “white metals” for fake
silver coins and not be too far off on the
weight. And he notes he has a big customer for
fake early U.S. copper coins dated in the 1800s,
if he can get the weight and alloy problems
Error coin expert Fred Weinberg says the Chinese
have done a lot more than just counterfeit the
U.S. coinage. He explains that the Shanghai Mint
was intentionally designed to be a replica of
the U.S. Mint at Philadelphia as it looked in
the early 1900s.
According to Weinberg, the Chinese made a
faithful copy of the facade of the Philadelphia
Mint as a tribute to the U.S. Mint, which sold
Shanghai a great deal of obsolete minting
equipment back in the 1920s.
Although Jinghuashei says he does not know if
his particular minting equipment might have come
from some of this same stock, other sources
knowledgeable about Chinese counterfeiting say
that the Shanghai Mint began selling off all of
the U.S. Mint equipment as scrap starting in the
mid-1950s. Thus it is possible that one or more
of the presses now striking counterfeit coins at
the Big Tree Coin Factory at one time were used
in a U.S. Mint facility.
Counterfeit error coins
One of the biggest emerging threats to the U.S.
numismatic marketplace at the hands of the
China-based counterfeiters is their recent entry
into the counterfeit error coin field.
Jinghuashei takes pride in the fact that he can
produce nearly undetectable counterfeits of
certain U.S. coin types because he is producing
them on the same types of machines from which
the genuine coins were struck.
Consider the fact that one of the best
anti-counterfeit diagnostics that the error coin
community has for detecting fakes – especially
19th century coin types – is that the
counterfeiters usually use the wrong equipment
to create their multi-struck and off-center
If the Big Tree Coin Factory can create quality
counterfeit error coins of these earlier types
using the proper pieces of minting machinery,
their fakes could become a real problem.
Although Jinghuashei has only recently begun
experimenting with the possibilities of
counterfeit 19th century error coins (such as
off-center half cents and double-struck Shield
5-cent coins) he sees this as an area with
excellent growth potential because customers
have been asking for these coins.
Like all businessmen who operate legally under
the laws of their country and take great pride
in their quality products, Jinghuashei is open
and optimistic about the future.
When the U.S. economy improves, he expects to
sell a much higher volume of counterfeit U.S.
coins of all types for distribution in the
American numismatic marketplace.
Jinghuashei is an affable, friendly fellow, who
has so little fear of U.S. prosecution (partly
because the United States hasn’t done much in
the past to go after the Chinese counterfeiters)
that he provided several photographs of himself
with his wife and his son. At first he was
reluctant to allow his picture to be published,
but he finally relented.
Jinghuashei is quick to admit that most types of
counterfeiting actually are illegal in China,
such as producing fake Tiffany jewelry and
But as long as China’s laws permit him to make
counterfeit U.S. coins, Jinghuashei says he will
continue to practice and perfect his art in the
time-honored Chinese fashion of quality