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A Case Of Coin Telemarketing Fraud: Here's What I Shoulda Done
By: Daniel Goevert
One day back in 1985, I received an unexpected phone call at my office from a
man named Gordon Carl (not his real name but whose real name Ill never
forget). The thing that initially struck me the most about the polished Mr. Carl
was his heavy New York accent, like something you might hear in a gangster
movie. The purpose of his call: to offer me a great deal in rare coins. As a
result of that conversation, I agreed to purchase five 1943 Walking Liberty half
dollars Mr. Carl described as MS-65 specimens. Furthermore, he guaranteed that
his firm would buy the coins back from me at any time of my choosing, paying 5%
less than the Grey Sheet bid price. As an unmarried yuppie (now theres a
word you dont hear much anymore), I calculated that I could afford the $1375
required to make the purchase. Perhaps more than anything, greed clouded my
judgment, and like a fool, I trusted Mr. Carl and dropped a check in the mail
the next day.
Later in 1985, Mr. Carls company changed names. Rather than interpreting this
as a flashing red warning signal, I eagerly sought to add more coins to my
portfolio. Being a gregarious sort of fellow, I attempted to establish a
friendly rapport with Mr. Carl and his associates. Looking back after all these
years, what has irritated me perhaps more than anything is how this shyster must
have smirked every time he heard my voice, for what a gullible, willing dupe I
was.
In 1989, I decided it was time to cash in my coins, so I called Mr. Carl. Not
surprisingly, the company was operating under yet another name. I couldnt get
through to Mr. Carl, but ended up talking to his brother, Maurice, with whom I
had never spoken. I informed him that I wanted to liquidate my Walking Liberty
half dollars in accordance with the buy-back policy under which I had purchased
them. Much to my disgust, he coldly declined, indicating his organization was
not affiliated with those earlier companies, and was under no obligation
whatsoever. In fact, he insinuated that he had never even heard of these outfits
before, despite the fact that his brother, Gordon, factored prominently in these
businesses. At that moment, the fog was finally lifted from my eyes: I had been
scammed! Not knowing what else to do, I politely said goodbye, and hung up. I
sat there, staring at the phone for what seemed like an eternity, in stunned
disbelief.
Several days later, I took my 1943 Walkers to a local coin dealer, the first
step in submitting them to a third party grading service. I didnt expect them
to grade out as MS-65, but if they came back as MS-60 or MS-63, I could at least
begin there to cut my losses. The dealer studied a couple of the coins closely
under magnification, and then sadly declared the coins were damaged due to
improper cleaning. He advised me not to have them professionally graded, because
the cost of grading probably exceeded the value of the coins. With few options
left, I put the tainted Walkers in storage, vowing never to repeat this
experience.
Lets now flash forward to the present time. Normally, I dont like antagonizing
myself, so it was with some reluctance that I fired up the computer to play the
game What If? That is, what if I had spent my $1375 with a reputable dealer in
1985 to purchase Walking Liberty half dollars? What kind of value increases
would I be enjoying today had I been smarter back then? To answer this question,
I first retrieved the historic value trend tables I researched in late 2005 for
Walking Liberty half dollars. For each date, mintmark, and condition, I noted
their values in 1985, and placed them next to their corresponding values in
2005, for a before and after comparison. In all, there were about 450 such
comparisons. Next, I calculated an annual compounded percentage return rate for
each data pair, and sorted them from highest to lowest. I then listed the top 20
for closer examination:
Date...........Condition
..1985 Value
..2005 Value
..Annual ROR
1917-D Obv
.MS-65
.
..$3000
..$27500
.
..11.13%
1921-S
...F-12
.
....$30.00
..
.
..$250
.
..10.62%
1919-D
.
..MS-65
...$15000
.....$115000
.
....10.19%
1917-S Obv
.MS-65
...$5250
.
....$35000
..9.45%
1918-S
...MS-65
...$3000
..
...$17500
..8.76%
1916-S
.
..VG-8
..
..$30.00
.
..$150
.
..7.97%
1917-S Rev
. MS-65
.
..$3500
..$17500
..7.97%
1921-S
.
..VF-20
.
..$200
..
..$1000
..
..7.97%
1921-S
.
..XF-40
....$1000
..
..$5000
.
..7.97%
1921-S
.
..MS-65
..
..$22500
..$110000
..
..7.85%
1918-D
.
..F-12
..$8.50
..$40.00
..
..7.65%
1918-D
.
..MS-65
...$5500
....$25000
..
..7.48%
1921-S
...VG-8
....$17.50
.
..$75.00
..
..7.18%
1921-D
.
..MS-65
.
..$6500
..
..$27500
..
..7.11%
1916-D
.
..VG-8
..
..$12.50
...$50.00
..
..6.82%
1938-D
.
..F-12
..$25.00
....$100
..
..6.82%
1938-D
...VG-8
..
..$20.00
.
..$80.00
..
..6.82%
1920-S
...MS-65
.
..$3750
..$15000
..6.82%
1917-D Rev
.VF-20
.
..$45.00
.
..$175
..
..6.68%
1938-D
...VF-20
.
..$32.50
.
..$125
..
..6.62%
The Walker with the best return since 1985 is the 1917-D (MM on Obverse) in
MS-65 condition. At $3000, it was well beyond the $1375 available to me to spend
on numismatics in 1985, as were all nine MS-65 coins appearing on the above Top
20 list. However, the remainder of the Top 20 represented coins in circulated
grades, and all were within my price range. Had I directed my hard-earned cash
toward the purchase of a legitimate example of each of these coins, I would have
spent $1421, just barely above what I forked over to Mr. Carl. Today, those same
Walking Liberty halves are cumulatively worth more than $7000. In pure financial
terms, this increase computes to an annual compounded return rate of nearly
8.00%. If only I had known then
Take note that all 11 of the Walkers that I wish I had added to my collection in
1985 are recognized as key and semi-key dates in the Walking Liberty half dollar
series. The fact that they are for well-circulated specimens (typically not the
object of affection for promoters and speculators) suggests that what has
propelled these coins to ever-increasing heights over the years is fueled by
consistent collector demand. We can expect to see similar patterns in the
future. If I were to conduct this same study in the year 2025, comparing retail
values then to what they were in the year 2005, the Top 20 would probably
strongly resemble the Top 20 in 2005.
What became of the 1943 Walking Liberty half dollars Mr. Carl suckered me into
buying? Well, I still have them, squirreled away in a bank deposit box. I
havent even looked at them in a decade or so. As I was writing the final words
of this article, it finally dawned on me to ask one more question: how would my
investment have performed had these been bona-fide MS-65 specimens? Taking the
same body of data used to derive the Top 20 above, I started thumbing down the
list
going down, down, and down some more. Finally, I came across the 1943 in
MS-65 condition, on line 419. The annual rate of return of this coin since 1985
is a dismal -2.13%. Thats a NEGATIVE 2.13%. Ironically, even had Mr. Carl been
an honest businessman, it still would have been a lousy investment for me.
There are two lessons to be learned here: (1) If interested in seeing your coins
increase substantially in value in the years ahead, purchase coins that have
already demonstrated a long record of consistent price advancements, which
usually are the key and semi-key dates for a given series, and (2) Deal only
with reputable people.
So what ever happened to the slimy Mr. Carl and his band of thieves? Well,
perhaps there is some justice in this world, after all. In late 1989, about the
time I discovered I was being victimized, the United States Postal Inspection
Service began an undercover sting operation of the company. Apparently, I wasnt
the only unhappy customer, but my losses were minimal compared to the sums
bilked out of others. In February, 1991, postal agents stormed the boiler room
outfit, executing a federal search warrant based on a complaint involving the
alleged fraudulent selling of coins through the mail. Mr. Carl and others were
arrested and led away in handcuffs.
Postal authorities publicized that anyone with grievances against the company
was encouraged to contact them, to help bolster their case against the
defendants. Since I kept meticulous records, I had no trouble assembling
incriminating documents and forwarded everything to the Inspectors office, tied
together by my personal story. I never heard exactly how the case was resolved,
but it seems almost certain these crooked telemarketers got what they deserved.
As for me, I won a small measure of satisfaction, knowing that I provided
evidence to help expose them. Now, if I could just figure out what to do with
those defiled 1943 Walkers...
About the Author:
Daniel J. Goevert is the webmaster of US Coin Values Advisor, specializing in
coin value trends and listing bullish US coins. The site also includes detailed coin collecting advice and an illustrated history of the US Mint. |
