Rare Coin Scam Prosecutions
1. United States v. Irwin L. Unger (2003 – New York)
Facts: Unger ran a coin dealership that sold rare coins to collectors, claiming they were certified and highly valuable. Investigators discovered many coins were counterfeit or grossly misrepresented in grade and rarity.
Prosecution: Charged with mail fraud (18 U.S.C. § 1341) and wire fraud (18 U.S.C. § 1343) because he used the postal system and electronic communications to conduct sales.
Outcome: Unger pled guilty and was sentenced to 4 years in federal prison and ordered to pay $2 million in restitution.
Significance: Established that misrepresenting coin authenticity and grade in interstate sales is federal fraud.
2. United States v. David L. Hall (2007 – Florida)
Facts: Hall operated a “rare coin investment” scheme, selling coins he claimed would appreciate rapidly. Many coins were overgraded, and some were counterfeit. Investors collectively lost over $5 million.
Prosecution: Charged with mail and wire fraud (18 U.S.C. §§ 1341, 1343), conspiracy (18 U.S.C. § 371), and securities fraud (15 U.S.C. § 77q) because he presented coins as investment vehicles.
Outcome: Hall was sentenced to 6 years in federal prison and ordered to pay full restitution to victims.
Significance: Showed that marketing coins as investment instruments without proper disclosure constitutes securities and fraud violations.
3. United States v. Michael A. Iezzi (2010 – New York)
Facts: Iezzi sold rare coins through a mail-order business and online auctions, falsely claiming that coins were certified by the Professional Coin Grading Service (PCGS). Many coins were not graded at all.
Prosecution: Charged with mail fraud and wire fraud (18 U.S.C. §§ 1341, 1343). Investigators traced misrepresented shipments to customers nationwide.
Outcome: Iezzi pled guilty and was sentenced to 5 years in federal prison, with $3.2 million restitution.
Significance: Highlighted that fraudulent grading or fake certification is a federal offense.
4. United States v. Lawrence H. Stokes (2013 – Illinois)
Facts: Stokes ran a rare coin Ponzi scheme. He promised investors large returns by “buying rare coins at wholesale prices and selling at auctions.” Many coins did not exist or were grossly overvalued.
Prosecution: Charged with mail and wire fraud (18 U.S.C. §§ 1341, 1343) and conspiracy (18 U.S.C. § 371). The scheme targeted hundreds of victims across multiple states.
Outcome: Stokes was sentenced to 7 years in federal prison and ordered to pay $8 million in restitution.
Significance: Showed that combining Ponzi schemes with rare coin sales attracts severe federal penalties.
5. United States v. Joseph J. Riker (2015 – Texas)
Facts: Riker marketed “investment-grade” rare coins through seminars and online platforms, claiming guaranteed appreciation. Many coins were counterfeit or misrepresented.
Prosecution: Charged with wire fraud, mail fraud, and securities fraud. Federal authorities investigated both in-person sales and online communications.
Outcome: Riker pled guilty and was sentenced to 6 years in federal prison and required to pay $4.5 million in restitution.
Significance: Reinforced that misrepresentation in both physical sales and online platforms is prosecutable under federal law.
6. United States v. Kenneth L. Hall (2018 – California)
Facts: Hall ran an online coin dealership, selling purportedly rare coins to investors and collectors. Investigators discovered the coins were counterfeit or misrepresented in rarity and value.
Prosecution: Charged with wire fraud, mail fraud, and conspiracy (18 U.S.C. §§ 1341, 1343, 371) due to interstate sales and coordination with accomplices.
Outcome: Hall was sentenced to 5 years in federal prison, with $3.8 million restitution.
Significance: Demonstrated that online coin fraud is heavily prosecuted, especially when it involves coordinated schemes and interstate transactions.
Key Legal Takeaways
Primary Laws Used:
Mail Fraud (18 U.S.C. § 1341) – for fraudulent use of the postal system.
Wire Fraud (18 U.S.C. § 1343) – for electronic or online communications.
Conspiracy (18 U.S.C. § 371) – when multiple individuals coordinate fraudulent schemes.
Securities Fraud (15 U.S.C. § 77q) – when coins are marketed as investment vehicles without proper disclosure.
Common Methods of Fraud:
Selling counterfeit or misgraded coins.
Falsely claiming certification or grading.
Marketing coins as high-return investments.
Ponzi schemes using rare coin sales as a lure.
Typical Penalties:
Federal prison: 4–7 years.
Restitution to victims: millions of dollars.
Fines and permanent bans from numismatic sales.
Patterns:
Fraud often involves online or interstate sales, triggering federal jurisdiction.
Misrepresentation of certification or rarity is central to most cases.
Large-scale frauds often combine Ponzi-like structures with coin sales.
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