Beside the fact that the price of gold is at an all-time high why would someone try to counterfeit gold?

The reason is simple–as the well known actor W.C Fields once said “You can fool some of the people some of the time and that’s enough!”

Committing a crime requires planning and thought. Creating fake gold bars filled with tungsten has already been done. So can it pay to counterfeit a one-ounce Krugerrand?

Krugerrands are easier to counterfeit because they are one ounce of pure gold plus one tenth of an ounce of a copper alloy. Since the only metal that is equal to the weight of gold is tungsten, the ability to use a carbon tungsten core covered in a mix of copper and gold allows for the best chance to get the thickness, diameter and weight right. To create a good counterfeit coin, you would need to fool one of the gold coin scales on the market such as the Fisch scale or the Gold Coin Balance. Anyone can use these scales to test one ounce gold coins. The accuracy of the Gold Coin Balance is so good that if a fake coin passes all the tests, the manufacturer will buy it for the spot price of gold.

The items usually counterfeited are paper money and art. But, both have serious problems in the achievement of the goal, which is to not get caught. Art forgers need to fool people trained to inspect and certify the painting. This is no easy task given the tools that these experts have to spot fakes. Paper counterfeiters are up against full-time government agents whose job it is to prevent, stop and catch them.

The penalties for counterfeiting are less than for robbing a bank, but counterfeiting requires heaps of planning. So how do counterfeiters usually get caught? Partners, supply sources, and crews to sell the fakes all create a trail leading back to the crime scene, not to mention the hiding place of the ill gotten gains.

A counterfeiter needs to think through the steps to success.
1. Create the counterfeit
2. Sell it and collect the wealth.
3. Hide the wealth in something or somewhere.
4. Avoid being “ratted out” by others that help you.
5. Leave no trail behind you.

GCB_468x60banner.gif
The Caper Begins–Creating the Perfect Gold Coin Counterfeit Plan

So let’s begin the plan to make the near perfect fake gold one ounce Krugerrand.

1. Grow a beard. Buy colored contact lens. Put a weight on one leg to cause you to limp slightly. Dye your hair. Why? You need a disguise, because with all the cameras everywhere these days, you will be seen.

2. Next, go to New York City and buy some clothes at Old Navy. Open a bank account using cash. Then rent a ground floor warehouse space by using a copy center to write the letter and send a check.

3. Set up a company LLC that would likely be expected to do millions of dollars through its account, such as a hedge fund, commodity trader, etc. Give it a generic name.

4. Order supplies and equipment such as carbon tungsten rounds smaller than a Krugerrand, a stamping machine, a smelter, and a good book to learn how to coat the rounds and stamp them. Of course making the stamping die will require some foreign company to manufacture it. Find a guy that is willing to go oversees to secure the dies. Do not get followed back to your warehouse once he delivers them to you.

5. Leave no DNA or prints at the warehouse and if it is someplace that you can burn down when you are finished that would be best.

6. Now that we have made the coins, the next step is to sell them. This is the best part. Nobody has managed to make a one ounce fake gold coin that coin dealers cannot spot. The stamping process is much harder to do than making a stamped gold tungsten bar. Your fake coins are going to be distributed to the 10,000 coin dealers all over the country. They all do business by mail. Plan ahead and address packages and send out 15 to 20 coins all on the same day to all of the coin dealers. Why? There may be one or two dealers that use a fancy machine that can “see through” to spot the tungsten inside, but by the time the word gets out, the checks form most of them to purchase your fakes has hit your bank account. Distribution and collection are easy made easy. You do not need to fool all of them.

7. So now what? Smile now “gold bug” because the need to convert the new millions in the bank to safe money is easy. The next and final step is to use your millions in the bank to purchase real gold coins from the ten or twenty big dealers around the country, and have them delivered to your warehouse. Buy pure gold coins like Buffalos not Krugerrands.

8. Load up your truck at the warehouse with your new real gold coins and drive off into the sunset. Convert them to houses, cars, etc. at you leisure by selling them to coin dealers.

Jared Lake is the president of GoldCoinBalance.com, which manufactures and sells The Gold Coin Balance–a pocket-sized gold coin tester. E-mail him here.