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#1652791 - 01/19/12 04:11 PM SAR- pennies
Anonymous
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We have a customer that we suspect is ordering large amounts of pennies ($1000/wk) in order to melt them down for their copper value. From what I have read online through a Google search, this is illegal. So far he has only ordered $2000 in pennies. Should I file a SAR?

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#1652819 - 01/19/12 04:09 PM Re: SAR- pennies Anonymous
Matt_B Offline
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That is certainly illegal, yes. Might be worth someone casually asking "Gee mister, whatcha doin with all them pennies!" and see what happens.

Also depends if they come back to you. I know quite a few people that buy up coin to sift through them for silver or wheat pennies or anything you can make money on. They also will buy from one place and return to another place figuring that they will have a better chance at sifting through new stock as opposed to buying coin that they themselves have already perused.

So I think it warrants further question before acting.
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#1652827 - 01/19/12 04:26 PM Re: SAR- pennies Anonymous
Anonymous
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Thanks! I will have the branch inquire further before taking any action.

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#1652848 - 01/19/12 04:35 PM Re: SAR- pennies Anonymous
rlcarey Online
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For large qualities of coin, you might want to impose a service charge large enough to diswade this person from returning. Buying coin is not a service covered under Reg. DD, so no disclosure would be required.
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#1652903 - 01/19/12 04:51 PM Re: SAR- pennies Anonymous
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Very true. We had to do this about a year ago because we had people buying up bags of quarters which forced us to have to buy more as opposed to being self-sustainable. It has worked well for us.
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#1652905 - 01/19/12 05:06 PM Re: SAR- pennies Anonymous
Anonymous
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Good point. I know we are looking into how much this is costing us so I will discuss passing on the fee to the individual. Thanks!

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#1653007 - 01/19/12 05:59 PM Re: SAR- pennies Anonymous
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That is a lot of work, going through the bag to find pre-1982 pennies, and then they are only worth about 3 times face value.
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#1653043 - 01/19/12 06:06 PM Re: SAR- pennies Anonymous
Matt_B Offline
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Lazy people will go to extraordinary lengths to make a few bucks, in order to avoid real work. (in the case of someone that's actually melting the stuff down)

For people sifting through looking for "valuable" coins, it's usually retired people with nothing else to do. I'd also do it if it wasn't frowned upon!
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#1653047 - 01/19/12 06:08 PM Re: SAR- pennies Anonymous
JacF Offline

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This is below the required reporting threshold (unless your customer is also an insider), so any filing you do would be voluntary, and not required.

That said, I wouldn't file on this anyway, because unless your customer truly is melting the coin, he isn't doing anything illegal. I had a customer who was doing this same thing a couple of years ago- he ran all of his pennies through a coin counter which could somehow separate the copper from the not-so-copper coins (either by wieght or magnetic properties). Then he brought the non-copper pennies back to the branch.

I do, however, concur with the chorus of voices suggesting a cost-benefit analysis to determine if you should charge a fee for large coin orders.

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#1653086 - 01/19/12 06:32 PM Re: SAR- pennies Anonymous
HappyGilmore Offline
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Pulling people out of the ditc...
pennies aren't legal tender, so why is melting them illegal?
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#1653104 - 01/19/12 06:59 PM Re: SAR- pennies Anonymous
rlcarey Online
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A New Law Makes it Illegal to Melt Down Pennies and Nickels

From Susan Headley, About.com Guide December 14, 2006


The U.S. Mint has announced that a new regulation, effective immediately, makes it illegal to melt down U.S. Cent and Nickel coins. Due to sharply rising metal prices, the U.S. Cent (99.2% zinc and 0.8% copper core, plated with 100% copper) has a current melt value of 1.12 cents per coin. The nickel, (75% copper and 25% nickel) has a melt value of a hefty 6.99 cents per coin!

Important Features of the New Regulation: •Travelers leaving the U.S. are limited to taking $5.00 worth of pennies and nickels out of the country.


•No more than $100.00 worth of pennies and nickels can be shipped out of the U.S. in any one shipment, and those only for "legitimate coinage and numismatic purposes."


•Penalties for violation include fines up to $10,000 and 5 years in prison, plus forfeiture of the melted, shipped, or treated material.
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#1653122 - 01/19/12 07:01 PM Re: SAR- pennies Anonymous
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I wonder what a "numismatic purpose" is...

::ponders::
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#1653182 - 01/19/12 08:31 PM Re: SAR- pennies Anonymous
Anonymous
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So I have some more information. The customer did tell one of our tellers that he is separated the copper and zinc and then actually selling the copper. He didn't go as far as to say that he is melting the coin, but he said he has a machine that separates the copper.

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#1653205 - 01/19/12 08:40 PM Re: SAR- pennies Anonymous
BSABecky Offline
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There are machines for separating the zinc pennies from the copper pennies; while that's legal the rest of what he may be doing is questionable. If he's only selling them to other people, that's legal. If any mention of melting is heard, that's time for alarm.
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#1653210 - 01/19/12 08:42 PM Re: SAR- pennies manimal
Matt_B Offline
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Originally Posted By: manimal82
I wonder what a "numismatic purpose" is...

::ponders::


Coin collecting purposes, not to be further utilized as legal tender basically.
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#1653337 - 01/20/12 02:41 AM Re: SAR- pennies JacF
Deputy Dawn Offline
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Originally Posted By: Agent P
This is below the required reporting threshold (unless your customer is also an insider), so any filing you do would be voluntary, and not required.

That said, I wouldn't file on this anyway, because unless your customer truly is melting the coin, he isn't doing anything illegal. I had a customer who was doing this same thing a couple of years ago- he ran all of his pennies through a coin counter which could somehow separate the copper from the not-so-copper coins (either by wieght or magnetic properties). Then he brought the non-copper pennies back to the branch.

I do, however, concur with the chorus of voices suggesting a cost-benefit analysis to determine if you should charge a fee for large coin orders.



He didn't bring them back to the branch because I wouldn't let him smirk

He bought my bagged pennies that I would normally have to pay to ship out and he was informed that we would not take any returns.

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#1653340 - 01/20/12 03:27 AM Re: SAR- pennies Anonymous
JacF Offline

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That's right- I remember now- he took them to a different bank.

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#1653394 - 01/20/12 01:31 PM Re: SAR- pennies Anonymous
HappyGilmore Offline
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Pulling people out of the ditc...
I have a bunch of lead pennies from WW2 era...
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#1653466 - 01/20/12 02:50 PM Re: SAR- pennies Matt_B
Bob The Banker Offline
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Originally Posted By: Matt_B
Lazy people will go to extraordinary lengths to make a few bucks, in order to avoid real work. (in the case of someone that's actually melting the stuff down)

For people sifting through looking for "valuable" coins, it's usually retired people with nothing else to do. I'd also do it if it wasn't frowned upon!

He may not be lazy, he may just be a coin collector. I used to have a customer whose hobby was coin collecting, he would come pick up a box of coins at a time, sift through for rare/collectable coins, come back and dump them in our coin machine and pick up more.

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#1654091 - 01/21/12 03:07 PM Re: SAR- pennies HappyGilmore
rlcarey Online
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Originally Posted By: HappyGilmore
I have a bunch of lead pennies from WW2 era...


They aren't lead, they are zinc and steel and worth a lot more if you don't melt them down. smile
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