National Collector's Mint pays up
The National Collector’s Mint, a Port Chester-based company, was ordered to pay civil penalties of $369,510 for profiting from misleading promotions of a coin marking the terrorist attack on the World Trade Center, New York Attorney General Eliot Spitzer announced yesterday.
National Collector’s Mint “preyed upon and exploited public sentiments concerning the tragic events of Sept. 11, 2001, and defrauded the public,” State Supreme Court Justice Thomas McNamara of State Supreme Court wrote in his order.
Spitzer, who had asked that NCM be fined $2 million, said he is gratified that the court agreed with his office’s contention that the company exploited public sentiments about the tragedy that happened more than four years ago.
“The significant penalty ordered by the judge should deter such unlawful conduct in the future,” Spitzer said in a written statement.
The civil penalty for the marketing and sale of the “Freedom Tower Silver Dollar” was in addition to the $2.2 million restitution in canceled orders the company was ordered to accept and refunds it was required to make to customers who had bought or ordered the coin, which sold for $19.95. Spitzer says the coin was worth less than a penny. The company valued the coins at 39 dollars, but sold them at 19 dollars and 95 cents. The company took in $11 million selling the coins.
McNamara wrote that restitution and civil penalties have different purposes.
Restitution restores consumers to the positions they held before the fraud or deception occurred. Civil penalties punish unlawful conduct and aim to deter similar unlawful conduct in the future.
NCM’s Web site at www.nationalcollectorsmint.com describ-es the company as “an independent, private corporation not affiliated with, endorsed, or licensed by the U.S. government or the U.S. Mint.”
Paul Caminiti, an NCM spokesman, said the company is glad the matter has been resolved.
“NCM is committed to treating its customers fairly and honestly,” he said.
One side of the medallion has an image of the Twin Towers; the other, a rendering of the Freedom Tower planned for Ground Zero. The coin no longer is advertised on the company’s Web site.
NCM had begun an extensive advertising campaign for the “Freedom Tower” coin on television, in magazines and on its Web site in September 2004. The coin was depicted in ads as a “legally authorized government issue silver dollar” and a “U.S. territorial minting” from the Commonwealth of the Northern Mariana Islands in the Pacific Ocean. The government of the islands, however, has no authority to coin money.
The ads further claimed that the coin was made of pure silver from silver bars recovered from Ground Zero. Spitzer’s investigation, however, found that the medallion is an inexpensive metal alloy plated with silver that is about one-third the thickness of a human hair.
The question of whether the silver used on the coin actually was from the site of the twin towers was not involved in the lawsuit, Spitzer said.
“The fact that the silver used was recovered at Ground Zero after 9⁄11 was not challenged by the attorney general nor was it questioned by any finding in the court,” said Caminiti, the NCM spokesman.
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