The recent discovery of thousands of counterfeit toonies by the RCMP 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 tamper with the humble toonie? The counterfeits seized seem to contradict the prevailing wisdom about counterfeiting: Since high-denomination bills involve about the same labor and input costs as low-denomination coins, $50 and $100 bills are much more attractive targets for counterfeits than for coins. The answer may well lie in China, where the RCMP claims the Camel Toe Toonies (named for their most obvious flaw, a polar bear toe defect) originated. Daixiong He, 68, of Richmond Hill, Ont., was arrested last month and charged with forgery and possession of counterfeit money. (None of the allegations have been proven in court.) The RCMP said the charges stemmed from a nearly year-long investigation, during which it identified and seized about 10,000 counterfeit toonies from the Canadian banking system. (The Canadian Bankers Association declined to respond to questions.) Reports of the fakes surfaced in the first half of 2020, when a trader found 75 in a cash register. The dealer, who was not publicly identified, posted a message about the discovery in July 2020 on a coin collector forum. “Since I’ve been seeing them on and off since March, I’m guessing they’re already running in large numbers in [Greater Toronto Area],” he wrote. “There’s no way these toonies are profiting by spending it on $2 coffees.” This news soon spread to collectors. Mike Marshall, a coin expert in Quinte West, Ont., who has taught counterfeit spotting seminars, said he bought five rolls of toonies in October 2020 and spotted 26 fakes. Each had the characteristic flaw: the polar bear’s front right foot had a large torn toe. Brent Mackie, treasurer of the Waterloo Coin Society, learned 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 scammers. His curiosity piqued, he bought nearly 500 more boxes in visits to banks in Ontario over several months, worth a total of about $500,000. (He started a website dedicated to fakes.) He found about 2,500 fakes, almost all of them the Camel Toe variant. “Sure, they’re not hard to find,” Mr Mackie said. “You can go to a bank, get a bunch of buns, and you’re almost certain 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 counterfeits last summer through its random sampling. (He declined to describe the process and said the Mint does not have investigative powers.) Officials notified the RCMP, which assigned financial crime investigators from the transnational serious and organized crime division to the case. He said it’s extremely rare to find fake toonies, but not unheard of. Many Camel Toe Toonies have faint impressions of the polar bear around the portrait of the Queen. JP MOCZULSKI/The Globe and Mail In September 2006, police accompanied Revenue Quebec officials to execute a search warrant at a coupon manufacturing facility in Repentigny, Que., in a tax evasion case. They found equipment to make counterfeit coins, along with nearly complete toonies and loonies. They called the RCMP. The Mounties said this operation (dubbed the Montreal Mint) was the most complex of its kind they had encountered. These fake toonies were dated 2004 and 2005. The metal of their outer ring was a darker gray than the genuine coin, and the core could be removed because it had no mechanism to hold it in place. While the comparative quality of knockoffs is in the eye of the beholder, the RCMP said in a statement that the Camel Toe Toonies were even better. Their weight, for example, was close to that of the genuine article. And they came in many varieties: Mr Mackie said the most common dates were 1996, 2002, 2004, 2005 and 2006. The RCMP said in an emailed response to questions that the counterfeits are sophisticated in that they were able to enter the financial system and were accepted and deposited into banks. They did, however, contain notable flaws, the most obvious being the polar bear’s crude foreleg. The fonts differ in obvious ways from the genuine article: Real coins use sans serif fonts, while some Camel Toe versions have serifs. Mr. Marshall said the maple leaf on the front is slightly too tall. Mr. Mackie paid particular attention to manufacturing defects. For example, when dies – the metal stamps used to make a coin – hit each other, they leave damage called die collision on subsequent counterfeits. (That could happen when an operator doesn’t place a blank coin between them.) Many Camel Toe Toonies have faint impressions of the polar bear around the queen’s portrait, he said. Moreover, defects in earlier versions become more pronounced in later versions. Mr Mackie said this showed the business was producing a lot of fakes and quality control was not a priority. “They use these matrices until they literally explode,” he said. Coin expert Brent Mackie at his home in Kitchener, Ont., June 24. JP MOCZULSKI/The Globe and Mail Therein lies one possible explanation for how counterfeiting toonies 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 can only cost 50 cents a coin to produce.” This is the first foreign counterfeit ring of Canadian coins known to the Mint. But the supposed Chinese origin of the coins did not surprise collectors, who are used to seeing Chinese copies of rare collector coins. “They weren’t made to be traded as real,” Mr. Marshall said of the replica collectibles. “They’re honestly making them to fill holes in their collection that they could never afford.” But unscrupulous sellers often buy such coins and sell them online at inflated prices to unwary collectors, he added. On the fake toonies, he added: “The only thing that has changed is that now adventurers realize that the Chinese will make whatever you want. If you send them a picture, give them a diameter and a weight, they’ll do it.” As part of his efforts to persuade websites and e-commerce authorities to prevent the sale of Chinese-made knock-offs, Mr Marshall has ordered thousands of knock-offs from Chinese suppliers. None of those shipments made it across the Canadian border and onto his doorstep through the postal service, he said. (Canada Border Services Agency spokesperson Rebecca Purdy (these officers are trained to look for contraband and other customs offences; between 2017 and 2021, its officers dealt with a mix of counterfeit notes and coins and carried out 25 enforcement actions.) Mr. Marshall estimated that there are “millions” of Camel Toe Toonies in circulation. Originally found in British Columbia, Ontario and Quebec, they are now found across the country. In addition, Mr. Mackie and Mr. Marshall say they have seen entire boxes of toonies direct from banks that did not contain a single genuine coin. Mr Marshall said police should have launched the investigation when they were first alerted to the counterfeits in 2020 and that efforts to interest civil servants and the media had been unsuccessful. “Because they were coins, nobody reacted,” Mr Marshall said. “Everybody went, ‘Yeah, right, who’s going to fake a toonie?’ That’s exactly why you fake a toonie: Because nobody’s looking.” Your time is valuable. Deliver the Top Business Headlines newsletter to your inbox morning or night. Sign up today.
