Germans arrest 6 in euro coin racket

AP News
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Posted: Mar 31, 2011 7:50 AM

Six people have been arrested on suspicion of netting some euro6 million ($8.5 million) by having scrapped euro coins reassembled in China, then cashing them in at Germany's central bank, prosecutors said Thursday.

The group is suspected of collecting 29 tons of mangled, invalidated 1- and 2-euro coins, which had been sold to China as scrap metal, and exchanging them in Germany for valid currency between 2007 and 2010, Frankfurt prosecutor Doris Moeller-Scheu said.

Germany's central bank, the Bundesbank, is the only financial institute in Europe that allows old or damaged coins to be exchanged without charge, prosecutors said.

The coins are put into special bags, which can be purchased over the Internet. They are evaluated by weight, with only occasional spot checks on the bags' contents.

Higher-value euro coins are made up of an inner, nickel center surrounded by an outer ring. As part of the scrapping process, the two parts of the coin are separated.

Prosecutors said that in China, "the center and the ring were reassembled and exchanged at the Bundesbank as allegedly damaged coins."

Four flight attendants, "who have no weight limits on their luggage," are among those suspected of taking part in the scheme by carting the reassembled coins back to Germany, Moeller-Scheu said.

Four of the six people detained following a sting Wednesday in the Frankfurt region were immigrants from China, Moeller-Scheu said in a statement.

No employees of the Bundesbank were among the suspects, she said.

Authorities are investigating the six on suspicion of fraud and bringing counterfeit money into circulation.