|Volume 62 No. 2||February 2016|
As of our January meeting, about one third of our members had not paid their 2016 dues. If your 2016 dues were not yet paid, your printed December Chatter had a dues note on the cover. If you receive an emailed link to each Chatter and your 2016 dues were not yet paid, your email for the December issue included a dues note. Annual dues are $20 for each individual member, and $10 for each junior member. Our record keeping system is able to handle payment of more than one year’s dues.
There is a correction to one of the Important Dates in the last Chatter issue: the venue for the March CICF is different for this year — it is the Stephens (Rosemont) Convention Center.
Paul Hybert, editor
The 1165th meeting of the Chicago Coin Club was held January 13, 2016 in the Chicago Bar Association Building, 321 S. Plymouth Court, Downtown Chicago. President Elliott Krieter called the meeting to order at 6:45 PM with 24 members and 2 guests present, Willie Davis and Nicholas Zacny.
A motion was passed to accept the Minutes as published in the Chatter. Treasurer Steve Zitowsky gave a detailed financial report for November-December showing $4,268.00 in revenue and $3,774.99 in expenses. He also went on to report 2015 year end with $22,992 in revenue, $20,047 in expenses, and $2,945 in net income, held in Life Membership $2,490 and Club Equity $27,331. After several questions, a motion was passed to accept the report. Steve also passed out a list of upcoming coin shows where the Club anticipates manning a table.
The membership applications of Willie Davis, Jr., and Nicholas Zacny received a first reading. President Krieter announced “Portraits of Liberty: Icon of Freedom” is the theme to National Coin Week, April 17-23, 2016, and encouraged members to place exhibits. Jeff Rosinia brought up the subject of appointing a committee to plan and organize the Club’s 1200th Meeting Celebration in December, 2018. Richard Hamilton brought up the subject of reordering a supply of Club name badges.
First V.P. Richard Lipman introduced featured speakers Robert and David Greenstein who delivered a talk on Anti-Money Laundering. Following a question and answer period, Rich presented them with ANA Educational Certificates and engraved Club medals.
Second V.P. Marc Stackler announced the exhibitors. DARREN HOOPER: a magician coin made from an 1896-S Morgan dollar. BILL BURD: story of the Chicago Numismatic Society’s Nashville Medal, how a quantity of bronze medals were purchased by Virgil Brand, and recently purchased by Bill who distributed one to everyone in attendance. DEVEN KANE: coins from the Baktrian Kingdom, India, and Safavid. MARK WIECLAW: a Coin World ad, 2016 gold Chinese Panda, German gold medal, and a Roman quadrigatus 225-214 B.C. RICHARD HAMILTON: 4 world crowns. ERIC DELGADILLO: 6 high grade U.S. coins. DALE LUKANICH: Sicilian Kingdom cut coin and 2 overstruck bronze coins from Herbassos, Sicily. LYLE DALY: Celtic coinage. RICHARD LIPMAN: 6 pieces of currency, plus a Wall Street Journal article on paper money collecting. ROBERT GREENSTEIN: 2 double denomination U.S. coins.
The meeting was adjourned at 9:08 PM.
Carl Wolf, Secretary
a presentation by David Greenstein and Robert Greenstein,
to our January 13, 2016 meeting
As long as there have been laws, there have been criminals. Illegal activity can be profitable, and the profits often are in cash, so law enforcement has often “followed the money.” With cash identified as an enabler of international terrorism after the 9/11 attacks, the federal government expanded its monitoring of cash transactions, and became more interested in actions that might be useful in laundering money.
What is money laundering? It is the process of taking ill-gotten gains and making them seem legitimate. This is usually achieved by adding the ill-gotten cash to the cash stream of a legitimate business, ideally a cash-intensive business. Start a list of sources of illicite cash by thinking of the Corleone family’s businesses in the Godfather books and movies. After that introduction, David and Robert started to explain how the government’s interest affects the coin and bullion businesses.
The coin and bullion businesses are cash intensive, with most of the items untraceable because they are not unique. Bullion trades as money worldwide, is easily transported, has a low markup, and can be sold readily. Add unscrupulous dealers who make transactions invisible, and the government introduced cash compliance regulations. To guard against money laundering through financial institutions (banks, in other words) section 352 of the Patriot Act requires that financial institutions establish anti-money laundering programs that include, as a minumum, a bunch of internal policies and such, a compliance officer to ensure the policies are followed, a training program so employees know the policies, and an independent audit program to verify the policies are being followed. The banks are also supposed to know their customers, but the normal transactions by a local coin business can be unlike those by most other businesses. Accountants, regulators, and auditors do not appreciate diversity among business practices — they produce questions at best and suspicions and allegations at worst. The result is that some banks, especially the large ones with many branches, simply avoid potential issues by not keeping coin dealers as customers.
Robert stated that Harlan J. Berk, Ltd uses a former government employee, someone who had written some of the reugulations, to audit them and review their own internal policies. Yes, a coin dealer also has to have its own AML (anti-money laundering) plan; and use and follow it, and be prepared to share it with its bank! A simple plan would suffice for a small dealer — “buy from the public and sell only to wholesalers” describes many small dealers without a storefront. The government and your bank might consider you to be a coin dealer even though you do not consider yourself as such. David and Robert mentioned a number of actions of coin dealers, including: have an online store (even if just eBay), buy ads in newspapers, and conduct for-profit transactions for friends and family.
If you perform any of the actions of a coin dealer, you will be expected to meet all of the corresponding obligations. With banks being more cautious regarding cash transactions, expect questions about any of your past transactions. Instead of a bank trying to understand your business by reviewing your business policies, it is easier for a bank to look for transactions that meet the criteria of “suspicious.” They will ignore all of your other transactions, and ask you about the “suspicious” one — your records had better provide sufficient details so you can explain it away.
The government’s preferred anti-money laundering measure is the creation of a document for every transaction, enabling the government to reconstruct a trail of interest at any time in the future. The laws have increased and changed over the years, adding to the types of transactions of interest bit by bit, and resulting in a set of forms and regulations that resembles a quiltwork more than a blanket. As an example: even though the rule for you requires reporting transactions of more than X amount of dollars, the government still has a record of your transactions of less than X amount of dollars because some other party is required to report those transactions. Everything is reported by a bank or company, even if you do not think so!
What is cash? The government regulations specify different dollar amounts for different financial instruments. Robert and David provided us with some examples on a slide, but by no means a complete listing. Because the ranges are subject to change, I will not even try to provide here a partial current snapshot. Two specific government forms were mentioned by Robert and David: Form 8300, and the Suspicious Activity Report (SAR).
Form 8300 is used to report transactions over $10,000 to the IRS, and requires the customer’s ID and Social Security Number. This is used for a single or related transactions of over $10,000. This form provides a generic description of the merchandise, and is rarely read by the IRS — there are just too many of them! But if any of your future actions raise a flag, expect all records involving you to be examined. When a customer buys $6,000 of gold and $6,000 of silver and pays for it all in one $12,000 transaction, the dealer must file a Form 8300. Now consider related transactions. If that customer had paid $6,000 now and agreed to pay the $6,000 balance in a month, that is a related transaction and a Form 8300 must be filed. If the customer had bought $6,000 of gold now, and $6,000 in silver a month later without telling the dealer about this plan, no Form 8300 would have been filed for either transaction. But if the customer had told the dealer of the planned future purchase, the dealer must file a Suspicious Activity Report — and the government reads each SAR when it is filed! A coin dealer must file an SAR whenever any looks suspicious; not only is the SAR filed without the knowledge of the reported customer, it is illegal to tell someone you filed it. You can talk about a filed SAR only if you are subpoenaed about it.
Do not get cute and try to avoid the rules by being creative. Although the government can accept, as honest mistakes, a few simple errors in filed reports, actively avoiding the rules can result in fines and criminal prosecution. The US government’s anti-money laundering rules are only one type of the regulations that coin dealers face. Local governments have produced their own rules, from the second-hand dealer rules in Chicago, to the rules in Minnesota that have made some coin dealers, even if located outside of Minnesota, from doing business with anyone in Minnesota, even by mail.
There are more details and nuances to the rules than can be covered in this report, or even just this presentation. If you think the rules might apply to you, learn more about them now. Robert and David ended the program by mentioning the Industry Council for Tangible Assets (ICTA), and the work they do in support of coin and bullion dealers.
|CSNS Convention||Chicago Coin Company|
|PCDA Convention||Harlan J. Berk, Ltd.|
Items shown at our January 13, 2016 meeting,
|Date:||February 10, 2016|
At the Chicago Bar Association, 321 S. Plymouth Court, 3rd floor meeting room. Please remember the security measures at our meeting building: everyone must show their photo-ID and register at the guard’s desk. Nearby parking: South Loop Self Park, 318 South Federal Street; that is two short blocks west of our meeting site. Note: Their typical rate of $33 is reduced to $9 if you eat at the Plymouth Restaurant, 327 S. Plymouth Court (next to our meeting site at the CBA) — show the restaurant your parking ticket, and ask for a parking voucher. The restaurant offers standard sandwiches, burgers, and salads for members who want to meet for dinner. Members start arriving at 5pm.
|Featured Program:||Marc Stackler
— Banco Revolutionario de Guerrero
Paper money from the Banco Revolucionario de Guerrero is a popular but obscure series from the Mexican Revolution. Surviving examples are scarce at best. The bank was established in the State of Guerrero in October, 1914, by a group of generals loyal to Emiliano Zapata. It never got off the ground. Less than six months after agreement was reached to establish the bank, its currency was recalled. Come to our February meeting to hear about this colorful, short-lived series of paper money from the Mexican Revolution.
Unless stated otherwise, our regular monthly CCC Meeting is in downtown Chicago on the second Wednesday of the month; the starting time is 6:45PM.
|February||10||CCC Meeting - Featured Speaker - Marc Stackler on Banco Revolutionario de Guerrero|
|March||9||CCC Meeting - Featured Speaker - Dale Lukanich on to be announced|
|March||18-20||22nd Annual Chicago Paper Money Expo (CPMX) at the Crown Plaza Chicago O’Hare, 5440 North River Road, Rosemont, IL. Admission is $5 for Friday and Saturday; free on Sunday. For details, refer to their website, http://www.cpmxshow.com.|
|March||19||CCC Meeting - 1pm at the Chicago Paper Money Expo,
which is held at the Crown Plaza Chicago O’Hare, 5440 North River Road, Rosemont, IL.
No admission charge for our meeting.
Featured Speaker - to be announced
|April||13||CCC Meeting - Featured Speaker - to be announced|
|April||15-17||42nd annual Chicago International Coin Fair (CICF) at the Donald E. Stephens Convention Center, 5555 North River Road, Rosemont, IL. Admission is $5 for Friday and Saturday; free on Sunday. For details, refer to their website, http://www.cicfshow.com.|
|April||16||CCC Meeting - 1pm at the Chicago International Coin Fair (CICF),
which is held at the Donald E. Stephens Convention Center, 5555 North River Road, Rosemont, IL.
No admission charge for our meeting.
Featured Speaker - to be announced
|April||28-30||77th Anniversary Convention of the Central States Numismatic Society at the Schaumburg Renaissance Hotel & Convention Center, 1551 North Thoreau Drive, Schaumburg, IL. Free public admission. For details, refer to their website, http://www.centralstates.info/conv.html.|
|April||30||CCC Meeting - 1pm at the CSNS Convention,
which is held at the Schaumburg Convention Center.
Featured Speaker - to be announced
All correspondence pertaining to Club matters
should be addressed to the Secretary and mailed to:
CHICAGO COIN CLUB
P.O. Box 2301
CHICAGO, IL 60690
|Elected positions (two-year terms):|
|Elliott Krieter||- President|
|Richard Lipman||- First Vice President|
|Marc Stackler||- Second Vice President|
|William Burd||- Archivist|
|Jeffrey Rosinia||- Immediate Past President|
|Carl Wolf||- Secretary|
|Steve Zitowsky||- Treasurer|
|Paul Hybert||- Chatter Editor, webmaster|
|Robert Feiler||- ANA Club Representative|
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