The CGC Reholder Scam, Hundreds of Fraudulent Comics Sold – What to Do If You’re Affected

(image courtesy Dustin Cassidy/FB)

CGC, also known as Certified Guaranty Comics, is the gold standard for appraising, certifying, and auctioning collectibles, especially comic books. When avid comic book collectors want to get their comics graded, slabbed, and sold based on current market values, they usually contact CGC as a third-party facilitator. CGC facilitated the auction of a copy of  Action Comics #1 with a CGC grade of 6.0 for $3.5 million in January 2023. However, the company is now being rocked by scandal; a scam artist has created a CGC reholder scam process and used the company to sell lower-value comics in slabs with high-value certifications.

While not being reported on mainstream media, the CGC reholder scam is rocking the online world of comic book collectors and investors. CGC has released an official statement admitting that the “incident affects a few hundred comic books,” implying that hundreds or potentially even thousands of its clients may have been scammed in the past months, years, or decades.

The company claims that it has certified the value of over 85 million collectibles over its 36 years of operations. It must perform a transparent investigation to restore the trust it professionally engendered with its clients and fans.

It could turn out to be a Herculean task if the company does not clean up its house, explain the scandal convincingly, and restore trust in its scammed clients. The minutiae of the scam required intimate knowledge of comic book lore, how valuable and collectible comics are handled, and how collectors responded to CGC grades, slabs, and labels instead of the comic.

Here is what you need to know about the scam, how to spot it, and how to protect yourself and your collectibles.

The CGC Reholder Scam

The CGC reholder scam artist was essentially selling reholdered and graded slabs that had low-value comic books inserted into slabs marked as high-value. 

Comic book slabs are reinforced plastic cases that encapsulate, protect, and visually authenticate valuable comic books. Third-party grading companies like CGC have comic book experts and authenticators who are employed to encase valuable comic books into the slab and then apply signatures, seals, and stickers that attest to the value and the grade of the comic book. Collectors can then be assured that they are getting the real deal when they pay big money for rare comics.

However, the CGC reholder scam artist created a loophole in CGC’s grading, slabbing, and reholder system which scammed buyers into paying for the appearance of high-value certified slabs that had low-value comics swapped into them. This should not have been possible since the slabs are designed to doubly encase the comic and are supposed to be hard to crack and leave visible evidence of tampering.

The scam artist used CGC’s own grading system against the company and the collectors who take the grading system for granted without question.

CGC grades run from a scale of 1.0 to 10.0. The higher the CGC grade, the more valuable the comic book. The CGC grade is printed on a color-coded seal that is encased inside the top of the slab along with a serial number to attest to the authenticity of the process. The point is that these slabs should not be easy to tamper with or crack, never mind swap lower value comics into. The whole premise of this collector practice is now being questioned online.

The CGC reholder scam artist would buy two or more of the same comic from low to high collectible value. So for example, the CGC reholder scam artist would buy a high grade copy of Incredible Hulk #181, featuring the first appearance of Wolverine, for several thousand, or much more, and then buy a much cheaper copy for a few hundred or thousand.

Then, the scam artist would get both comics graded and slabbed. The scammer would then remove each comic book from their respective slabs, a process which is not supposed to be possible without damaging or breaking the slab and leaving obvious clues of tampering.

Then, the scammer would insert the lower-grade, cheaper, or aesthetically defective comic in the slab with the high CGC grade certifications.

For example, the scammer could insert a $2,000 copy of Incredible Hulk #181 with an 8.5, 8.0, or even lower CGC grade into a slab that displays a 9.8 grade. 

The scammer then sends the slabbed and graded comic to CGC and asks CGC to reholder it or replace the graded and certified slab with a new one. CGC and other similar companies will only reholder or reslab comics that are already graded and slabbed. Comics are reholdered to upgrade slabs or denote new valuation details.

Comics are also reholdered when the slab is damaged. So, the scammer covers up their own tracks by having CGC reholder the high-value certification slab that they subtly damaged by swapping in a lower-value comic.

The scammer now has a lower-value comic in a new and upgraded slab, seemingly and unwittingly enabled by CGC itself. The scammer then sells the comic at inflated prices on eBay. 

Additionally, the scammer can keep repeating the process by continuing to buy expensive, valuable, and highly graded comic books, having them graded and slabbed to reflect that investment value, removing the valuable comic without showing obvious signs of tampering or destroying the slab, inserting a lower-value copy of the same comic, have CGC reholder the comic, and then sell it again at an inflated value.

The scam artist, or groups of scammers, could have potentially made small fortunes repeating this scam loophole process over the past few years or decades.

At present, no one knows how long this scam has been perpetrated on CGC and its clients; however, CGC does admit that currently, the scam has occurred hundreds of times through its services without giving an exact figure or concrete details.

There is no evidence that CGC or its employees were involved in the scam as of yet. However, CGC did unwittingly enable a scam artist, or multiple scammers, through negligent quality control measures. 

CGC Responds

CGC has put out an official statement admitting that several hundred of their reholdered comic books are now implicated in this scam. The company also vaguely states that they are conducting a full investigation and that any client affected by the CGC reholder scam will be “appropriately compensated,” without further clarification.

CGC has been in business for over 36 years and has professionally certified over 85 million collectibles for its customers in that time. It is a large company, but it has damaged its goodwill and trust with its client base.

The company either has extremely negligent quality control practices, reholders comic books without inspecting or verifying their value and grade, or potentially has malicious insiders on the payroll. Until the facts of the scam are revealed, speculation will abound on social media.

The company only states that “hundreds” of its reholdered comic books were involved in this scam. That estimate could grow higher in the coming weeks and months. Also, since the company has been in business for almost 40 years, this scam could have been going on for just as long.

Until CGC reveals the findings of such an investigation, there is no confirmation that the CGC reholder scam involved only one scammer, dozens, or even hundreds going back years or decades.

Comic book collectors have to ask themselves what is the value of grading and slabbing if the slabs can be tampered with so easily and negate their usefulness. 

Online Comic Book Collectors Revealed the Scam, Not CGC

The most damaging PR aspect of the CGC reholder scam is that it was online comic book fans, collectors, and auction purveyors who unveiled the scam, not CGC.

YouTube channels Automatic Comics and Swagglehaus offer detailed reports on the alleged eBay reholder scammer and how they got caught. YouTube channel Immaculate Comics offers a fascinating report and tutorial on how the CGC reholder scammer probably cracked open and swapped the comics from their respective graded slabs without showing signs of tampering.

YouTuber Action Figure Grader names the alleged eBay scammer who perpetrated the CGC reholder scam and offers his own insight on how it happened. (This site will refrain from naming the alleged scammer until there is official confirmation.)

Until CGC further explains how the scam happened, how it failed to notice it, the weaknesses in its quality control measures, how it will compensate victims, legal actions it will take against the scammers, and why it will never happen again, its reputation will remain damaged. 

Social media sleuths have revealed several ways that the CGC reholder scam artist probably perpetrated their schemes. Here is how to potentially spot similar scams in the future.

CGC Color-Coded Grade Labels

The certification labels in a graded and slabbed comic have different colors denoting the grade, value, and aesthetic condition of the comic. 

A blue color-coded label means that the comic matches the grade value on the certificate but has no other amenities that make it stand out. It is defect-free and has no signatures. This blue color certification is also known as a “Universal Grade.”

A yellow certification label implies that the comic book has no aesthetic defects, has never been tampered with, and was signed by someone connected to the comic while witnessed by a CGC employee. 

Some comic books from the Bronze and early Modern Ages of comic books featured coupons that needed to be cut out to redeem a prize. Valuable comic books from these eras might have aesthetic damage or torn or cut pages due to the marketing schemes of the era. These comics might even have signatures from creators that were not witnessed by CGC staff. These comics get a green-colored label; while they may be valuable, such defects bring down their full potential value unless they are significantly rare.

A purple-colored certification label implies that the comic was previously damaged and aesthetically restored by a novice or professional. A rare and valuable comic book that had a missing cover glued or stapled back on it might have a purple label.

A gold color-coded label signifies that the comic has a traceable and historical paper trail and collectible pedigree that proves its authenticity as a rare and valuable item. 

There are also variations of these color-coded grades; for example, there are certificates to denote facsimile comics, comics missing covers or staples, and so on, but those are the basics. 

The CGC reholder scam artist might bought low CGC grade but expensive comics with purple or green labels and stuck them in slabs with blue, yellow, or gold color labels. They more likely inserted low CGC-grade comics into blue, yellow, or gold label slabs that denoted high value and could be auctioned for higher prices.

The Marvel Value Stamp

From 1974 to 1975, Marvel Comics included a coupon within the pages of its comics called the Marvel Value Stamp. Readers could collect the Marvel Value Stamp to redeem small prizes.

Unfortunately, one had to cut the coupon from the comic book page which defaced and damaged the aesthetics of the comic. Still, this practice would help comic book collectors 50 years later learn how to appraise the value of the comic books printed in this era.

One of the most pivotal and valuable comic books in history is the first appearance of Wolverine in a comic book. Incredible Hulk #181, published in November 1974 features the first full appearance of Wolverine. (Wolverine technically appears for one panel in the previous issue in a cameo appearance.)

A copy of Incredible Hulk #181 with a blue CGC Universal grade of 9.8 sold for $146,000 through CGC in November 2022.

Incredible Hulk #181 features Marvel Value Stamp #54, which features Shanna the She-Devil. If the Marvel Value Stamp is in the comic, the certification label should state it and the condition of the comic via the color-code. 

The CGC reholder scam artist could put a comic that does not have the Marvel Value Stamp in a slab that denotes it does and sell it for an inflated price since such comics are rare.

Mark Jeweler Inserts

Mark Jeweler Inserts were four-page jewelry advertisements that were inserted into the center of certain newsstand and direct market editions of Marvel Comics sporadically from 1972 through 1986. The insert contained advertisements for jewelry and was marketed to military service members domestically and abroad.

Comic books featuring these Mark Jeweler inserts are rare; they also should be noticeable since the insert subtly sticks out from the top of the comic book.

Graded comic book slabs should denote if the comic has a Mark Jeweler insert. Eagle-eyed online sleuths noticed that the CGC reholder scam artist was placing non-Mark Jeweler comic books into slabs claiming that they were such and auctioning them on eBay.

Essentially, the CGC reholder scam artist got caught because they used the scam too many times on their eBay page and online sleuths realized the scammer was using CGC as an unwitting and negligent enabler.

What To Do If You’ve Been Scammed and How to Spot It in the Future

While CGC is technically a victim, they are still a third-party facilitator service that failed its customers. The company obviously has blind spots and weaknesses in its quality control systems that allowed this scam to fester for however long it did.

At best, CGC was negligent and not inspecting the comics they were reholdering. At worst, there may have been some shady in-house intent and some bad apples involved if this scam has been going on for years or decades; none of this can be proven without a thorough investigation.

CGC is the gold standard for collectors and investors to certify their comic books and have them appraised, graded, slab, and sold at auction. This scandal is a reckless breach of trust with the comic book collectibles fandom.

CGC currently finds itself between a rock and a hard place. No one is going to give the company the benefit of the doubt that this scam only happened a few times. The company could hope the scandal goes away, which it won’t. 

They must commence a thorough in-house investigation to find out how many times this scam has occurred; it could be revealed that the scandal occurred much more than a few hundred times as the company claims.

If one or several scammers have already been exposed, it must be assumed that others have been doing this for some time now without being caught. Furthermore, this scandal will inspire new scammers to get in on the action.

So, what can you do to protect yourself? 

Check Your Certification Number on GPAnalysis

You can check the serial number of every CGC graded and slabbed auction on a website called GPA or GPAnalysis. The site keeps a running directory of every CGC-graded slab sale on its system. If you see your graded slab’s certification number appear more than once, then you may have been scammed.

Compare Grading and Slabbing Companies

Comic book fans treating CGC like a grading and slabbing monopoly could be part of the problem. There are many other grading and slabbing companies that you can consult as well like CBCS, Quality Comix, Becketts, PGX, EGS, Heritage Auctions, and more. 

Compare services and prices. Contact the employees of these companies and ask questions.

Each company has its own grading process, and while CGC is the industry standard, they are not the only game in town. Always consider your options and compare the grading and slabbing processes of different companies.

Learn About Comic Book Culture

The biggest weakness the CGC reholder scam artist exposed in the comic book collector community is that some collectors buy the grade and the slab, not the comic.

Consult with a true comic book culture fan and expert and conduct meticulous research on the comics you want to buy. Take the time to learn about the comics you want to buy, its creators and the zeitgeist of the era in which it was published. 

If you are going to buy a valuable comic book printed in 1974 or 1975 then you should be aware if it has a Marvel Value Stamp or not. A Mark Jewelers Insert should be aesthetically obvious and rise a bit above the top of the interior pages of a comic in which it is inserted; you should know if the particular comic you want to buy has one and how to spot it.

Comic books with CGC grades of 8.0 and higher should not have noticeable aesthetic defects like wrinkles, stains, discoloring, and so on. If it looks too good to be true, it might be so. 

If you buy or sell comic books worth thousands or tens of thousands of dollars, then you might want to take business trips and have some of your more valuable comic books appraised, valued, graded, slabbed, or reholdered in front of you and watch as much of the process as possible

Do your research and buy the comic, not the grade or the slab. While CGC was used by a scammer, the scammer was a comic book fan who knew that some collectors see what they want to see instead of verifying and authenticating. The scammer is a comic book fan who knows how to take advantage of other comic book fans. 

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Allen Francis

Allen Francis is a full-time writer, prolific comic book investor and author of The Casual’s Guide: Why You Should Get Into Comic Book Investing.  Allen holds a BA degree from Marymount Manhattan College.  Before becoming a writer Allen was an academic advisor, librarian, and college adjunct for many years. Allen is an advocate of best personal financial practices including saving and investing in your own small business.