Counterfeit fares cost TTC $5M

(for those who aren’t from Toronto, the TTC is the Toronto Transit Commission)
Police are today expected to reveal details of the arrests made in a counterfeit case that is believed to have ‘international implications’ and has cost the TTC $5 million at a time when it’s dealing with a budget shortfall.

“It’s the biggest ever,” said an unusually tight-lipped TTC chairman Howard Moscoe. He said the fraud wouldn’t impact the fare increase announced Wednesday.

Moscoe said the dollar value of the fraud would have been enough for the TTC to buy 10 regular buses, which cost about $500,000 each.

It’s believed fake tokens — easily duplicated with a stamping machine — are at the heart of the scam, although there was a hint yesterday that fake Metropasses may be involved.

Fares are now $2.25, so a $5 million fraud is just over 2 million tokens.

What interested me about this article, as a metal stamper, were some details at the end about the 2004 counterfeit case, which I don’t recall seeing at the time.

The TTC, which doesn’t use watermarks or other special protection measures on tickets or tokens, is an easy target for counterfeiters.

Rick Ducharme, the TTC’s general manager, said in late 2004 that the system was losing about $7 million a year to fraud — about a third of that because of fake tickets and tokens. Ducharme said that since 2003 the TTC had laid about 450 criminal and provincial charges against people using phony tickets.

Three brothers were arrested in November 2004 for their alleged involvement in a counterfeit token operation that cost the TTC about $1.2 million over three years. One hundred bogus tokens were being sold for $120 to $130. At the time, buying 100 tokens from the TTC would have cost $190.

The fakes were lighter, thinner, duller and had slightly sharp edges.

In fact, police said, the fakes could not be used in TTC turnstiles.

Those who bought the fakes were told to use them only in fare boxes.

I was interviewed yesterday by Global TV because, as a blogger and a metal stamper, I would know something about this. I told them I knew nothing about counterfeiting, but coining is a standard process learned by tool and die students and routinely practiced by stampers, generally with bigger presses than the ones we have. So you’d be hard pressed to set up much of an operation in your bedroom, although you might do it in a tall basement.

There are several things going against the TTC in this case. I said that a fair amount of token collecting is done in fare boxes supervised by bus drivers who have plenty to do and really not much time to check the quality of the coined image on the face. You could set up a small scam by just passing anything roughly the same size and colour as a token on a bus.

So it’s interesting that, in the 2004 scam, the fake tokens used weren’t even the right thickness, may not have been the right alloy (lighter and duller). That says to me that they didn’t have access to a service center that could get them the correct alloy (no, I don’t know what alloy the TTC uses, but it is some kind of aluminum, because the coins are considerably lighter in my pocket than dimes). The “sharper edges” means that the people didn’t have the proper tools or didn’t know how to properly maintain their dies.

Here is a followup article from 2004, from the google cache of the article at the time. The original article seems to be gone.

Last stop for fake TTC tokens

Toronto — Police have charged three Toronto brothers after cracking a counterfeit operation that produced an estimated $1.2-million worth of illegal subway tokens.

The men, aged 59, 54 and 48, were arrested at a home in East York in a raid by Toronto Police and special constables from the Toronto Transit Commission.

Investigators estimate that the suspects produced about $400,000 worth of fake tokens a year for the past three years.

The bogus coins were manufactured using a press that stamped them out from strips of aluminum.

They could not be used in subway station turnstyles, police said, but were easily passed off as legitimate when placed in fare boxes located in buses and at the stations.

During the raid, police also discovered a plaque that the men had made to commemorate the minting of their 400,000th counterfeit token.

Here is an article from Ryerson’s online newspaper talking about how it played out on campuses. There was, it seems, a distribution ring operating on the Ryerson campus.

And here’s an article from Pulse24 at the time. Here’s the Globe and Mail article, which names the 3 brothers charged. And a press release.

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