Firm accused of US mutilated coin return scam bites back

A company accused of inveigling millions of dollars' worth of counterfeits through the US Mint's damaged coin returns scheme has called for the charges to be dropped.

Wealthy Max Limited and its Chinese affiliate want the civil forfeiture action brought by the US government dismissed, and is also seeking immediate payment of $2.4m that it claims is owed by the Mint. 

The motion to dismiss the action cites "multiple inconsistencies in the original complaint and the fact that there has been no direct proof of counterfeiting, or of a conscious attempt to cheat the US government."

The complaint originally filed in March by the US Attorney's Office in New Jersey was seeking the forfeiture of around $5.5m from the defendants, arguing that it was unfeasible that the companies had been able to source so may 'mutilated' coins from its scrap business.

The Mint pays $20 per pound for dimes, quarters and half dollars that have been bent, broken, corroded or no longer can be counted by sorting machines, under a scheme that was first introduced in 1911. The returned coins are smelted and the metals re-used to make new coins.

US Customs and Border Protection (CBP) became suspicious about a high volume of coins being shipped into the US which, according to the importers, were found in cars exported to China as scrap metal.

Government estimates at the time suggested that each scrap car would have had to have contained around $900 in loose change to account for the volume of coins being processed under the returns system.

It also said the re-imported coins contained aluminium and silicon, unlike genuine coins, as well as lower amounts of copper and nickel than the US Mint uses.

"The original complaint expressed doubts that Wealthy Max and other recycling companies with links to China could source the number of coins claimed through scrap metal exported from the US to China," said the company's legal defense team in a statement. 

"This demonstrates a lack of understanding of the scale and organization of the Chinese metal recycling industry."