Coin Dealer, Grading Company Hit for Nearly $2 Million under Federal Racketeering Law

[jeff of pa]

According to court documents, from January through May of 2011,Corpus Christi stockbroker Bonnie Pereida made 31 separate purchases of rare coins from PCA Collectibles, Inc. of North Lindenhurst, New York. She bought 135 coins and paid a total of $727,569 to PCA for them. The coins were graded by PCI, and the sole owner of PCI at the time was defendant Anthony Delluniversita, who also was the dominant shareholder (60%) of PCA Collectibles.

the reasonable retail value of the coins at the time they were purchased by Pereida was $150,964, about 20 percent of what Pereida paid.

Heritage, Montgomery and PCGS identified one coin as counterfeit, a 1914-D Indian $2.50 graded by PCI as MS64.

They also identified 25 other coins that could not be graded because they were either cleaned or damaged. These included a 1907 Saint-Gaudens Roman Numerals High Relief Double Eagle graded by PCI as MS65 and sold for $19,000. Heritage estimated the auction value at $6,000, Montgomery valued the coin at retail as $4,500, and both Heritage and Montgomery agreed with PCGS that the coin had been cleaned.
An 1892-CC Liberty Double Eagle, sold by PCA to Pereida for $12,500 and graded by PCI as MS62, was valued by Heritage at $2,600 and only AU, valued by Montgomery at $700 because it was damaged and PCGS refused to grade it because of a noticeable scratch on the coin.
During the trial in November 2014, Montgomery showed the judge coins graded by PCI as Mint State that were, in his opinion, only About Uncirculated.

Coin Dealer, PCI Hit for Nearly $2 Million under RICO

 

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[Tom_in_CA]

interesting read. thanx.

 

[Msbeepbeep]

That's what happens when the foxes work in the chicken coops, there's bound to be some midnight raiding.

Our Boston Library, has just discovered besides a few wayward paintings, there are a few gold coins...missing. Or as they say "unaccounted" for.

They must be using Gorilla glue on their fingers! And they have the nerve to brow beat MD'ers for finding coins and stuff. Sheeeeeze!

 

[1320]

Don't mess with Texas!

 

[1320]

This tidbit is buried in the 30 page PDF "Findings" document.....

80. Therefore, the Court concludes that Plaintiff is entitled to $280,190.00 in reasonable attorney’s fees.

Great post Jeff!

 

[1320]

Spend $728k to make 2 million....now that's a great ROI!

 

[huntsman53]

Awesome! Now if they will just do the same to some of the Shysters on eBay, buying coins for collections or investments, would be a lot better.


Frank

 

[david680]

All I can say, is if you are not comfortable grading coins for yourself, don't buy them. Yes, PCGS and NGC have good well earned reputations, but learn the ropes yourself.

 

[huntsman53]

All I can say, is if you are not comfortable grading coins for yourself, don't buy them. Yes, PCGS and NGC have good well earned reputations, but learn the ropes yourself.

Yep, buy the coin, not the holder! Up until about 2007, I had a contact (elderly gentleman Coin Dealer) at a local Coin Club Show that was able to purchase slabbed coins directly from quite a few of the Grading Service companies that were either returns due to problems (i.e. coin was damaged or other problems where the customer was reimbursed for the coin and services), held due to non-payment or other factors. He would sell these slabbed coins cheap or in lots much cheaper. I would go through each and every slabbed coin, looking for under graded coins, for coins priced way below any market value and for unattributed Error and Variety coins. I sold quite a few of these slabbed coins from 20% to 50% more than what I paid for them and even sold some that were unattributed Errors and Varieties for 10 to 20 times or more than what I paid for them. The unattributed Error and Variety coins were my main focus as this was where the most money could be made! Although I made good profits off of the coins, I never had a single unsatisfied customer. The elderly gentleman retired from the coin business and never passed on his' contacts/sources to anyone. That was a real bummer to lose such supplier of slabbed coins and thus, such profits!


Frank

 

[CincinnatiKid]

Even bullion is graded these days!?
Grading companies seem to be outta control.
When I began detecting, slabbed NGC and PCGS Morgan Dollars caught my eye. Man was that a mistake!
Graded coins in the MS60-64 range are hard to recover purchase price. Unless rare.
I stack generic bullion these days. Easy to liquidate at a fair price if needed.
Great thread. Thanks Jeff.
GL
Peace ✌

 

[david680]

Yep, buy the coin, not the holder! Up until about 2007, I had a contact (elderly gentleman Coin Dealer) at a local Coin Club Show that was able to purchase slabbed coins directly from quite a few of the Grading Service companies that were either returns due to problems (i.e. coin was damaged or other problems where the customer was reimbursed for the coin and services), held due to non-payment or other factors. He would sell these slabbed coins cheap or in lots much cheaper. I would go through each and every slabbed coin, looking for under graded coins, for coins priced way below any market value and for unattributed Error and Variety coins. I sold quite a few of these slabbed coins from 20% to 50% more than what I paid for them and even sold some that were unattributed Errors and Varieties for 10 to 20 times or more than what I paid for them. The unattributed Error and Variety coins were my main focus as this was where the most money could be made! Although I made good profits off of the coins, I never had a single unsatisfied customer. The elderly gentleman retired from the coin business and never passed on his' contacts/sources to anyone. That was a real bummer to lose such supplier of slabbed coins and thus, such profits!


Frank

Most coin dealers out there carry some type of side cutters with them to bust slabs. A lot of money is made busting coins out of slabs. And a lot of money is lost believing that the slab carries the value. If you are going to collect or invest in coins, a loupe, grading guides, and a good research library are your best bets. Like you said, buy the coin, not the holder.

 

[bzbadger]

At a coin show last year I came across a 1916 SL aka booby quarter and was showing ms65 and a for sale price of $2k. The guy offered me a 3x loop, pulled out my 20 and started looking and noticed he had placed his price sticker over the 10-11 o'clock position of the coin. I asked him to remove the sticker and he seemed upset at my request but reluctantly did so and what do you know..a knick on the edge of the coin, one I didn't need a loop to see it.
I looked at him like are you freaking kidding me and he just shrugged. I tossed the coin at him because I wad pissed that this guy was trying to cheat me and his response was to shrug.
I now only work with one guy who happens to be in our club and if he pulls any crap like that he knows me well enough I'll.insert his detector in an awkward place.

 

[BARKER]

HI Jeff; Thanks for a great Post. It has started a real good discussion on Grading. I just wish there was a RELIABLE Button Grading Service somewhere. There are none known. We operate on basic eye appeal and Design Rarity. Thanks. PEACE:RONB