New Taipei brothers arrested for fraud involving damaged NT$50 coins

Taipei, May 5 (CNA) Two brothers from New Taipei have been arrested on suspicion of purchasing over NT$250,000 (US$7,735) worth of damaged and unauthenticated NT$50 coins at a discount, and then exchanging them in the Taipei Metro system.

In a press release, the Rapid Transit Division of the Taipei City Police Department said it began an investigation after being contacted by the metro operator, which said "large quantities" of NT$50 coins being used at certain MRT stations were being refused by financial institutions, based on doubts about their authenticity.

Upon looking into the matter, police discovered that suspects had been using the coins to add value to their MRT cards at Banqiao, Ximen, Jiangzicui and Xingtian Temple stations since Feb. 12 last year.

After topping up their cards, the suspects applied for cash refunds from station information desks, the department said.

Investigators zeroed in on an incident on Feb. 16 last year, when a man complained to a station worker about a ticket machine not accepting the coins he was using to add money to his iPass card, police said.

Using surveillance camera footage, police were able to identify one of the suspects as a 48-year-old New Taipei man employed in the tourism industry, surnamed Tsai (蔡). The man's 45-year-old brother was also named as a suspect soon after.

On March 9 last year, police brought the elder Tsai back for questioning and seized 98 NT$50 coins from his possession after he was spotted by Taipei Metro staff at Jiangzicui Station.

During interrogation, the two Tsai brothers said they had been purchasing the coins from "recycling companies" in Taiwan and China for between 60 and 70 percent of their face value.

The brothers said the companies had claimed the coins were retrieved from the bottom of fountains.

They admitted they had no way of knowing whether they were real or fake.

The brothers said they initially tried to exchange the coins at banks, but were told they would have to pay a fee to authenticate them, and for that reason decided to exchange them at MRT stations instead.

According to police, the brothers exchanged at least 5,148 of the suspect NT$50 coins, with a total value of NT$257,400.

The Central Bank later determined that only 33 of the coins used by the brothers were counterfeit. However, police said the brothers had also broken the law by using, rather than trying to authenticate, coins of questionable validity.

After completing their investigation, police turned the brothers over to Taipei prosecutors on April 24 on suspicion of fraudulent offenses under Articles 339-1 and 339-2 of the Criminal Code and circulating counterfeit currency. They have not yet been charged.

According to the Central Bank, the authentication process costs NT$0.5 for NT$1 coins, NT$2.5 for NT$10 coins, and NT$7 for rarely-seen NT$20 coins and NT$50 coins.