By CoinWeek News Staff ….
Ottawa jeweler Samuel Tang bought what he thought was a genuine 1 oz, .9999 fine gold wafer from his local branch of the Royal Bank of Canada on October 18. At first glance, he had no reason to suspect anything was amiss; the wafer seemed to feature all the right marks and stamps and besides, it was in a sealed Royal Canadian Mint package.
But as soon as Tang’s goldsmith, Dennis Barnard, began to work with the gold, it was clear that something was wrong. Placing the small bar in a jeweler’s tableting mill, the gold was too hard to bend or smooth out. Then Barnard tried to bend the wafer with his hands, but instead of yielding it simply snapped into two jagged-edged pieces – something gold doesn’t do.
He then used an acid test kit to settle the matter. Rubbing a streak of the metal onto an abrasive stone, Barnard applied a drop of acid to the metallic residue. Acids of different strengths are used to test for different purity levels, and if the streak of metal changes color or disappears entirely, then the metal that rubbed off onto the stone is, at the very least, less than the karat level being tested for by the specific acid. Tang’s bar failed the 18-karat test despite supposedly being 99.99% pure 24-karat gold.
Tang contacted both the bank and the Royal Canadian Mint. Neither one would take the bar back.
At this point, the jeweler turned to the Canadian Broadcasting Corporation (CBC) for help. Besides reporting on the story, the CBC also sought a second opinion from another dealer. The supposed gold failed another acid test, this time for 14 karats.
After the news broke, the Royal Bank of Canada refunded Tang his purchase price of $1,680 CAD and returned the bar to the Mint for testing. According to A.J. Goodman, a spokesman with the bank, the RBC is actively working with police to determine how the counterfeit got into bank inventory – which, according to the bank, is a rare occurrence.
Of course, figuring out how rare may be a difficult problem to solve. As Tang himself noted, since the counterfeit gold was sealed in mint packaging, why would an investor in precious metals have any reason to doubt its provenance and actually open it up to check? Such a scenario could be dramatically damaging to consumer confidence in Royal Canadian Mint bullion products.
“I am worried there are more of those out there, and no one knows,” Tang said.
To help assuage such fears, the Mint released a press statement on October 31. Here is it in its entirety:
Recent news reports of a counterfeit 1oz. Mint-branded gold bar sold at an RBC branch have raised unfounded speculation as to the origins of the counterfeit and the purity or Royal Canadian Mint bullion products. The Mint is therefore issuing this statement to clarify the facts surrounding this matter, specifically:
- The Mint did not manufacture, ship or sell the above-mentioned product.
- RBC has confirmed that the bar it sold to its customer did not come from the Royal Canadian Mint and it continues to investigate the matter with our support.
- Attempts to re-sell counterfeit Royal Canadian Mint bullion products are rare and this is an isolated case.
- We take any suspicion of counterfeiting seriously and work with law enforcement to support their investigations.
- Without exception, we test all of the product leaving the Mint to ensure that all gold bullion products (coins, wafers and bars) we produce and sell are at least 99.99% pure.
Customers can remain confident in the purity of Mint bullion products, which is governed by rigorous production standards reinforced by strict protocols applied at every level of refinery and minting operations. In addition, our world-class assay (or gold testing) laboratory certifies that all gold bullion delivered to customers meets its stated purity (99.99% or 99.999%). All wafers are weighed and assayed before being shipped.
Because of their purity and security, Royal Canadian Mint bullion products stand for excellence worldwide and lead the global bullion market. We vigorously protect the reputation of our brand by adding advanced anti-counterfeiting features to our bullion products, such as Bullion DNA technology and micro-engraved security marks, which offer buyers of Royal Canadian Mint bullion the highest level of security in the industry.
In addition to the statement above, RCM Senior Communications Manager Alex Reeves stated that federal agents have inspected the counterfeit wafer and it has been determined to be a copy of an older design that is no longer in production. Reeves also said that the wrapper was a forgery as well, featuring distinctive errors. All gold that is purified at the Mint is immediately used to produce either coins or bullion and is sealed on the premises before being sent to a distributor (the Royal Canadian Mint, like the United States Mint, does not sell bullion products directly to the public).
Barnard, however, believes that both the Mint and the bank were too slow dealing with the issue.
“Even if they wanted to handle it quietly, they went about it the wrong way. I don’t know if they were hoping that we would just go away, but we are not a massive company that can afford to just drop $1,680 and forget about it. Even if we could, what about everybody else out there that could be affected by this,” he said.
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