Until last week, collectors looking for a way to mark the restoration of the Statue of Liberty could buy a set of two U.S. coins and a gold medallion for $345 from the Federal Mint Corp. through a nationwide advertising campaign.
Coin dealers say the set is worth only $140. Last Friday, Federal Mint closed its post office box after the U.S. Postal Service filed a civil complaint against the company alleging that buyers could easily confuse the set with government-issued commemorative coin sets worth three to four times that amount.
Federal Mint, which advertised in The Washington Post last on June 16, is also being investigated by the Florida comptroller's office for "possible fraud and misrepresentation," according to a source in the Florida attorney general's office.
Attempts to reach Joyce Gable, listed as a Federal Mint director in Florida corporate records, and Jay Schlak, identified as a director in the postal complaint, were unsuccessful this week. The company's sales office in Hollywood, Fla., closed during the weekend. Its direct mail flyers were in the mail as late as last week.
The Bureau of the Mint said that because of the way the Federal Mint set was advertised, it was easily confused for three-piece government-issued sets that have more than doubled in value since they sold out late last year, according to Kenneth Gubin, general counsel to the bureau.
Federal Mint sold the U.S. Liberty silver dollar and half dollar proof coins along with its own, privately struck gold medallion, for $345. The U.S. coins in the set are available from the bureau and from private dealers for $31.50, and the medallion is worth only about $80, according to gold content, local coin dealers said.
The medallion and the advertising confuse people into believing the set is one of two three-piece Liberty commemorative sets issued by the government that include a $5 gold piece, Gubin and others said. Those sets, which sold out late last year, are now valued by collectors at about $650 for the uncirculated set, and $425 for the proof set.
The Postal Service charges that Federal Mint presented its gold medallion as legal tender issued by the government and associated with the bureau of the Mint.
"In some of their literature they refer to the medallion as a coin," Gubin said. "It's a trap a lot of people fall into. It's not a coin, but it resembles the genuine Statue of Liberty coin that is sold out."
The company's display case is "identical to the one used by the Mint in size, shape and color," Gubin added. Both cases have an eagle on the bottom right corner.
Other industry experts also consider the ad to be confusing.
"The packaging and presentation itself lead one to believe that it's the government-issued three-coin set," said Beth Deisher, editor of Coin World, a numismatic newspaper. "We've had calls from our readers, who have been confused by it. And if our readers are confused, the general public will be very confused."
The "disturbing" part, Deisher said, is that the public is becoming aware of the rarity of the official set because its rapid escalation in value has made it a news item in general interest magazines. Many people who read about the government's set may not realize Federal Mint's set is different and not nearly as valuble, she said.
Kenneth Brussett, education director of the American Numismatic Association, called the ads "tremendously misleading."
"The words that they use make one think that it's the government issue, which most people know is sold out and virtually unattainable," Brussett said.
Dealers said the medallions have no numismatic value at all.
"They're scrap gold as far as I'm concerned. It's not a government issue and adds no value to the set," said Marc Watts, owner of the Gaithersburg Exchange.