The RCMP’s recent discovery of thousands of counterfeit toonies has raised concerns about the integrity of Canada’s banking system, through which they circulated with apparent ease.
It also begs a question: Why would anyone fake the humble toonie? The seized counterfeits appear to contradict the prevailing wisdom about counterfeiting: Since high-denomination bills involve roughly the same amount of labor and input costs as low-value coins, $50 and $100 bills are much more targeted. more attractive to counterfeiting than toonies.
The answer may well lie in China, where the RCMP alleges Camel Toe Toonies (named for their most conspicuous flaw, a polar bear paw flaw) originated.
Daixiong He, 68, of Richmond Hill, Ontario, was arrested last month and charged with pronouncing counterfeit money and possession of counterfeit money. (None of the allegations have been proven in court.) The RCMP said the charges stem from a nearly year-long investigation during which it identified and seized around 10,000 counterfeit toonies from the Canadian banking system. (The Canadian Bankers Association declined to answer questions.)
Reports of the fakes surfaced during the first half of 2020, when a dealer found 75 at a cash register. The dealer, who did not identify himself publicly, posted a message about the discovery in July 2020 on a coin collectors forum.
“Since I have been finding them on and off since March, I assume they are already in circulation in significant numbers in the world. [Greater Toronto Area],” he wrote. “There’s no way they’re profiting off these toonies by spending them on $2 coffees.”
That news soon spread among collectors. Mike Marshall, a coin expert in Quinte West, Ontario, who has taught seminars on identifying counterfeits, said he bought five rolls of toonies in October 2020 and identified 26 counterfeits. Each had the distinctive flaw: the polar bear’s right front leg had a large split toe.
Brent Mackie, treasurer of the Waterloo Coin Society, found out about Camel Toe Toonies through an online forum in March 2021. He went to the bank and bought a box of toonies and found two imposters. His curiosity piqued, he bought almost 500 more boxes in visits to banks in Ontario over several months, for a total value of approximately $500,000. (He started a website dedicated to fakes.) He found around 2,500 fakes, almost all of them camel toe variants.
“They’re definitely not hard to find,” Mackie said. “You can go to a bank, get a bunch of scrolls, and you’re almost guaranteed to find some, at least anywhere near [Toronto].”
Michelle Richardson, a spokeswoman for The Royal Canadian Mint, which produces Canada’s coins, said the Mint detected the fakes last summer through its random sampling. (She declined to describe the process, saying the Mint has no investigative powers.) Officials notified the RCMP, which assigned financial crimes investigators from its Transnational Serious and Organized Crimes Section to the case.
She said it’s exceptionally rare to find fake toonies, but not unprecedented.
In September 2006, police accompanied Revenue Quebec officials to execute a search warrant at a token manufacturing facility in Repentigny, Que., in a tax evasion case. They found equipment to make counterfeit coins, along with nearly finished toonies and wackos. They called the RCMP.
The Mounties said this operation (called the Montreal Mint) was the most complex of its kind that they had found. Those fake toonies had dates from 2004 and 2005; the metal of the outer ring was a darker gray than the genuine coin, and the core could be removed because it lacked a mechanism to hold it in place.
While the comparative quality of the fakes is in the eye of the beholder, the RCMP said in a statement that the Camel Toe Toonies were even better. Its weight, for example, was close to that of the genuine article. And they came in multiple varieties: Mackie said his most common dates are 1996, 2002, 2004, 2005 and 2006.
RCMP said in an emailed response to questions that the fakes are sophisticated in that they were able to enter the financial system and were accepted and deposited in banks.
However, they included notable flaws, the most obvious being the polar bear’s crude right front leg. The typefaces differ in obvious ways from the genuine article: actual coins use sans serif fonts, while some Camel Toe versions feature serifs. Mr. Marshall said the maple leaf on the front is a bit too tall.
Mr. Mackie paid special attention to manufacturing defects. For example, when dies, the metal stamps used to make a coin, hit each other, they leave damage called die shock on subsequent counterfeits. (This could happen when an operator fails to place a blank coin between them.) Many Camel Toe Toonies have faint polar bear prints around the Queen’s portrait, he said. Also, the flaws of earlier versions become more pronounced in later ones.
Mr. Mackie said this indicates that the operation produced many counterfeits and that quality control was not a priority.
“They are using these dies until they literally explode,” he said.
Therein lies a possible explanation for how toonie counterfeiting could be profitable: economies of scale. Says Mr. Mackie: “When you start making millions of them, you can reuse all the dies and machinery, and spread that cost over each individual part. When you’re producing millions of them, it might only cost 50 cents a coin to produce them.”
This is the first overseas Canadian coin counterfeiting ring known to the Mint. But the coins’ putative origin in China did not surprise collectors, who are used to seeing Chinese-made replicas of rare collectible coins.
“They weren’t made to be traded like the real thing,” Marshall said of the collectible replicas. “Honestly, they make them for people to fill in the gaps in their collection that they could never afford.” But unscrupulous sellers often buy those coins and sell them online at inflated prices to unsuspecting collectors, he added.
With the counterfeit toonies, he added: “The only thing that has changed is that now adventurous people are realizing that the Chinese will do whatever they want. If you send them a photo, give them a diameter and a weight, they will make it.”
As part of his efforts to persuade e-commerce sites and authorities to prevent the sale of counterfeits made in China, Marshall has ordered thousands of counterfeits from Chinese suppliers. None of those shipments failed to cross the border into Canada and arrive at his door through the postal service, he said. (Canada Border Services Agency spokeswoman Rebecca Purdy these officers are trained to search for contraband and other customs violations; between 2017 and 2021, its officers found a mix of counterfeit bills and coins and carried out 25 enforcement actions).
Mr. Marshall estimated that “millions” of Camel Toe Toonies are in circulation. Initially found in British Columbia, Ontario, and Quebec, they are now nationwide.
What’s more, Mr. Mackie and Mr. Marshall say they’ve seen entire boxes of toonies straight from banks that didn’t contain a single genuine coin. Marshall said police should have started investigating when they were first alerted to the fakes in 2020, and attempts to interest public officials and the media were unsuccessful.
“Because they were coins, no one reacted,” Marshall said. “Everybody said, ‘Yeah sure, who’s going to fake a toonie?’ That’s exactly why you fake a toonie: because no one is looking.”
Your time is valuable. Get the Top Business Headlines newsletter conveniently delivered to your inbox morning or night. sign up today.