Buyer Beware: ‘Bad actors’ look to sell common stamps for big bucks

An online auction listing offered a damaged cover franked with an extremely common 5-cent George Washington stamp for $12,000. The seller likely was looking for an unknowledgeable buyer or may have been part of a potential money laundering scheme

Note: This column is reprinted courtesy of The Chronicle-Telegram of Jan. 11, 2025.

By Dennis Sadowski

There have been a few times since I started writing this column more than a decade ago that a reader contacts me believing they have a rarity among stamps they’re holding or have inherited.

Their minimal research has taken them to online auction sites where they see a stamp such as the 1-cent Franklin of the 1920s being offered for thousands of dollars. Their message: “I have a stamp that looks just like that.”

Patiently I respond that the chances of having a rare version of an otherwise common stamp are extremely small. In reality, I’m thinking, they have a better shot at winning a $1 billion lottery.

For collector or non-collector, it’s important to remember that such listings fall into one of three categories: misidentification, fraud, or money laundering.

Misidentification

This is the most common reason. As stamp dealer and philatelic author Wayne Youngblood wrote in an Oct. 1 post on Substack, “Many, many cheap stamps look exactly like valuable ones to the untrained eye.”

The 1-cent Franklin stamp of the Fourth Bureau Issue is one of those most commonly misidentified. One rotary press printed version, Scott 594, catalogues $35,000 mint and $11,000 used. A second rotary press version, Scott 596, of which only 13 used examples are known, is listed at between $200,000 and $250,000.

More common versions of the same design, such as Scott 552, 581, 597, 632, and others, sell for pennies.

Several factors determine which stamp is the valuable one and which one is common. The most noticeable is the size of the printed design. As little as one-half millimeter determines the difference. A measurement with a ruler or stamp gauge can clear up the confusion.

Youngblood advises to “assume you have the most common stamp until proven otherwise” by having it certified by a professional philatelist.

“Rare stamps are rare because only a few exist after more than a century of dedicated collectors and dealers searching for them; not because there are thousands just waiting to be discovered in common accumulations,” he wrote.

Fraud

Unscrupulous sellers abound online. They list common stamps almost always using the word “Rare” or “Gem” in the listing headline. One example found on Jan. 2 offered a used copy of the 2-cent stamp issued for George Washington’s birth bicentennial in 1932 (Scott 707).

The obviously faulty stamp was priced at $450. It appears the seller was looking for a quick victim.

Money Laundering

This is an idea I had not thought about until reading Youngblood’s comments. He wrote that many cheap stamps are being “sold” online at high prices. “This is a hallmark of money laundering, which is an attempt to get illicit money into the ‘legitimate’ stream of wealth,” his post said.

A search revealed several listings of otherwise common stamps being offered for thousands of dollars. One involved a 1966 wrinkled cover franked with a 5-cent George Washington stamp (Scott 1213). More than 1 billion were printed.

Youngblood has found that similar listings of common stamps had just one bidder. He postulated that “dirty” money from illicit activities like casino laundering, arms dealing, and drug dealing need to enter the financial system in ways that cannot be easily traced.

“Posting ‘rare’ stamps and having a partner pay exorbitant prices for them is just one way to obfuscate the origin of the money, which may go through one or more additional laundering cycles,” Youngblood wrote.

In conclusion, he cautioned that “there are many greedy, ignorant, or bad actors out there who continue to foster the notion among the unknowledgeable that rare stamps can be found around every corner.”