The scrap metal recycling industry is alive and well in China… to the tune of $50 billion.That’s right, $50 billion.

And a treasure hunt has commenced amid the metal heaps. Some cunning entrepreneurs are pillaging the junk cars and metal shredders to scavenge for mutilated coins. Pennies, nickels, dimes, you name it.

In today’s “Slap in the Face” Award, I reveal how they’re quite literally “cashing in” thanks to the U.S. Mint’s generous coin repatriation program. And the suspicions of foul play may shock you…

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Transcript:

This is a funny one out of China.

If you’re looking for that niche job in retirement, consider the business a guy named Shahar from Australia carved out for himself.

He started buying mutilated and defaced coins – U.S. coins – from all over the world. From the kinds of places where people either throw away money, like in wishing wells or fountains, or lose it in the car seats. He then sells the coins to the U.S. Mint, which melts them down to make new coins.

His first deal was for 6,000 pounds of coins from one Asian temple. He now has deals for beaten-up coins from all kinds of sources in 25 countries.

He described it as quite a good business for the past 25 years. The whole wishing well/fountain coin recycling business has added up to the tune of about $100 million just since 2009.

Then China got in on the deal.

It buys hundreds of thousands of tons of American scrap metal, mostly old cars, and guess what? A whole lot more coins started showing up from the shredded cars.

You know, those quarters and dimes that fall into areas you can’t reach… or a dime stuck to a piece of gum in the ashtray.

In just one Chinese scrap metal recycling plant, which is a $50 billion industry in China, there were 1,000 workers picking through the fist-sized chunks of metal that come out of the shredders, looking for coins.

And this is where the slap comes in.

The U.S. Mint recently filed a complaint in federal court stating that a large number of coins sent by three Asian coin recycling companies, not Mr. Shahar’s, had trace elements of metals not found in U.S. coins.

Oops!

And there’s more.

According to the Mint’s complaint, to arrive at the volume of coins these three companies have sent in, there would have to be 746 coins, or about $105 on average, in each junk car exported to China.

That’s a lot of dimes stuck to gum and under the front seat.

And of course the companies are screaming foul. They say their coins are authentic and that no one is stupid enough to counterfeit coins.

But one of the companies in question has agreed to forfeit $129,000 of the $220,000 worth of coins they sent in for reimbursement.

Now that sounds like a bit too much like a give-up to me.

746 coins per car, that’s unbelievable!

I wonder how you get 6,000 pounds of coins from Asia to the U.S without someone dipping their hands into it.