Comic books can be very valuable. Some issues are worth several million dollars. “Investment grade” comics are a special category of comic that meet one or both of two criteria: 1) high value (usually above $2,000), 2) Certified grade (condition). There are a lot of variations, but those are the basics. The three companies that do most of the grading are: Certified Guarantee Company (CGC), CBCS, and PGX. Of the three, CGC is the pedigree grader collectors tend to prefer.
Professional grading services are like assayers who put a stamp on gold ingots to guarantee and certify its weight and purity. In comics, the way this is done is that each comic is carefully examined, flaws are noted, and then the comic is placed in a double-sealed case to prevent tampering. A label with the grade is inserted into the case, along with information about the comic and a serial number (Figure 1).
Three Marvel test market variants, with no mention of that fact on the label
Comics are graded on a ten point scale, but realistic grades are in the range 1.8-9.8. A 9.8 is considered perfect and is worth a considerable premium over lower-graded comics. In the old days, comics weren’t graded on a ten point scale. Instead, they used the grades poor, good, fine, and mint. Mint comics were full value, fine was worth 33% less, good was 66% less, and poor was half the value of good. The new grading scale increases value logarithmically. This creates huge price jumps for small changes in condition in higher grades.
For instance, here are the eBay sold prices, at different conditions, for Amazing Spider-Man #300, from 1988:
- 9.8: $13,602.22
- 9.6: $2,495.00
- 9.4: $900.00
- 9.2: $882.03
- 9.0: $775.00
- 8.5: 629.99
- 8.0: $462.356
These large price differences are just one of the reasons why it is very important that comic book holders, called “slabs” are tamper proof. They are designed to be difficult to open, but if opened, visible damage is caused. When this happens, the grade is nullified. If not for this, unscrupulous people could buy a $15,000 comic in a 9.8 slab, then buy a $2,500 copy of the same comic in 9.6 condition, swap the 9.6 for the 9.8, and sell it for a huge profit. This could work because most people cannot distinguish between a 9.8 and a 9.6 unless it is in their hands for a close inspection.
Meanwhile, the unscrupulous person still has the now slab-less 9.8, can get it re-slabbed, and then sell it for his money back. At least, that is the theory. The good news is that certified comics come with a serial number. This serial number allows collectors to identify graded comics on an online registry to ensure they are legitimate. All you have to do is copy the number from an eBay listing, paste it into the registry on CGC’s site, and pull up a record of the comic. Again, this is supposed to inhibit fraud. Instead, one clever person found a way to use the serial numbers to commit fraud.
In addition to title (Spider-Man) issue (300) and condition (9.8), there are other factors that can influence price. I hinted at that above with the image of three comics from my collection. They aren’t worth a lot, but they are very rare. Here are a couple things that add to value:
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Edition type: Direct/Newsstand (Newsstand worth from 1.5x to 10x more, depending on issue)
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Inserts: Mark Jewelers put ads in comics sold to overseas soldiers. Comics with those ads can be worth 2x to 10x the price of issues that don’t have them.
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Test market price variants: Marvel and other publishers sometimes tested price hikes in a few representative towns before deploying them nationwide. These comics tend to be extremely rare and can increase value up to 5x a standard priced comic.
There are other things that can reduce value that are not visible in a slab:
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Missing pages, coupons, or “Marvel Value Stamps”. These can bring a grade from an apparent 9.8 to a 1.8.
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Missing premiums, like “Tatooz” inserts in Spider-Man and Fantastic Four
If we go back to three comics in the photo above, you will see that all three are labelled as “newsstand edition.” That adds to their value, but nowhere near as much as the fact that all three are test market variants. These aren’t well-known variants yet, so their value isn’t that high, and CGC didn’t notice they had a different price. For this reason, the label is missing crucial information. If I wanted, I could send them back and “reholder” them (put them in new slabs) with adjusted labels that contain the information about test market pricing. This is the loophole the scammer used to inflate the value of his comics.
First, he bought two versions of the same comic that could be passed off as the same comic, where one had or lacked something that radically changed the value of the comic. This was expensive. He did this with comics that typically sell for between $3,000-$15,000. He had to buy at both ends of the value spectrum for each comic, spending thousands of dollars for a high grade slab, then somewhat less for the replacement comic.
This was first noticed with a copy of Amazing Spider-Man #252. Based on evidence, it appears to have worked like this: The “high value” version was a 9.8 slab, labelled as a newsstand comic that cost around $2,500. He then bought a lower grade newsstand with a Mark Jeweler ad for about half that. He then opened the 9.8 slab and inserted the lower grade comic. This was then sent back to CGC for reholdering, along with the note, “you missed the Mark Jeweler’s insert.” He got back the lower grade comic with the valuable ad in a holder that was now labelled 9.8 and “Mark Jeweler’s Insert.” He then sold it for over $17,000. He then sent the original 9.8 newsstand back to CGC and got it back in another 9.8 slab that he could use again for the same scam with another lower value comic.
This scam was discovered when a collector got curious about the price realized for the $17,000 comic. He copied the serial number, then pasted it into the registry, and took a look at the comic. CGC has photos of the comics, so he could see that the comic with that number did not say it was a Mark Jeweler’s variant. He contacted the seller and asked how that had happened. He explained that CGC had missed the insert when they first graded it, but fixed it after being informed of the error.
This kind of thing does happen, though it is a big thing to miss. My price variants are much easier to miss, because until recently, it wasn’t even known that Marvel tested new prices in that year. What the intrepid collector investigator didn’t tell the scammer is that he knew he was lying. He knew the comics weren’t the same. The reason is that the lower grade comic had unique signs of wear, like a tire track or shoe print, that didn’t exist on the other comic. He knew for a fact that somehow, a new comic was substituted for the earlier one, and had taken on the original comic’s serial number and grade.
After confirming his suspicions regarding this comic, the results were posted to the CGC forums, and many new investigators got in on the act. They discovered this counterfeit wasn’t the only one. They quickly identified several more, then what looked like dozens, and now possibly hundreds. It could even be more, because new evidence suggests the possibility that this seller has been committing this type of fraud, with variations, for around 30 years without detection.
Disclaimer: Some of the comics found are definite examples of counterfeiting via slab-switching. Others look that way, but are not yet proven because the original comics haven’t been located for comparison.
There are several theories about how this happened and where the breakdown happened. My theory is that CGC was insufficiently vigilant in the reholdering process. Instead of inspecting comics submitted for reholdering to ensure they are the same comic originally graded, they accepted it was the original comic provided the case wasn’t obviously tampered with. Our friend likely found a way around this, possibly by purchasing equipment similar to that used by CGC, to make it look untampered with.
In an ominous sign, some evidence was found that the seller also traded in coins, guaranteed and certified by CGC’s sister company, Numismatic Guarantee Company.
This breakdown in process may have serious implications for the hobby and businesses associated with it due to a catastrophic loss of trust. When collectors are spending tens of thousands of dollars on individual comics based on CGC’s guarantee that comics within their slabs are what they purport to be, what will they do when they can no longer trust that guarantee?
This situation cannot be fully resolved by finding the present owner of all affected slabs, assuming they can be found. It may not be resolvable by modifying the reholdering process to prevent this type of fraud in the future. The culprit must also be brought to justice. Even then, how can faith in the certification process be restored after an event like this?
This situation with the counterfeit comics reminds me strongly of the things I have found, or others on the team have found, in our study of New York’s voter rolls. The switching of one comic for another to take advantage of the ‘good” grade is exactly what can happen when a voter’s information is duplicated and a new ID number is assigned. Now the voter can vote twice, just as the scammer has created two 9.8’s out of one.
The result is also the same: a loss of faith in the system. For the same reason I don’t think the CGC scandal can or should be swept under the rug, I am offended by public officials who refuse to look at or acknowledge the mountain of evidence that illegal irregularities exist in American elections, and likely have for some time.
The 2020 election was our Amazing Spider-Man #252. It got our attention and we started looking. What has been found extends well beyond the scope of the original inquiry, and continues to grow. It is a systemic problem, meaning it can only be solved at that level.
Other comic Youtubers have begun weighing in on the impact this could have on grading.