Spokane7
65°
April 3, 2011 in City, Idaho
Bogus coins, bullion seized in CdA focus of federal action
Federal prosecutors go to court in North Carolina on Monday in an attempt to obtain government ownership of an estimated $7 million in “Liberty Dollars” and silver bullion seized as contraband at a private mint in Coeur d’Alene.
The forfeiture action comes 17 days after a jury in U.S. District Court in Statesville, N.C., convicted Bernard von NotHaus of conspiring against the U.S. government and manufacturing and selling counterfeit coins.
The case against the 67-year-old is believed to be the first time the Justice Department has brought a successful criminal prosecution against someone minting, selling and circulating coins in direct competition with the U.S. Mint and Federal Reserve.
The U.S. attorney who brought the case claims von NotHaus’ activities amounted to a form of domestic terrorism.
But his defense attorney called that poppycock and blasted the Obama administration for bringing the case. Attorney Aaron Michel said von NotHaus did nothing illegal and promised to appeal the jury’s guilty verdicts and oppose the asset forfeiture.
The owners of Sunshine Minting Co. and the private mint in Coeur d’Alene were not charged criminally, nor are they part of the forfeiture action.
The coins and silver, gold, platinum and copper that will be the focus of the forfeiture hearing are owned by von NotHaus and an estimated 250,000 purchasers throughout the United States who left their Liberty coins at Sunshine Minting for safekeeping, not realizing they would be seized as contraband, said Michel, of Charlotte, N.C.
The jury conviction of von NotHaus comes six years after the start of a joint investigation by the FBI and U.S. Secret Service into his nationwide Liberty Dollar operation.
During that time, von NotHaus went from promoting private coinage to promoting marijuana as a religious drug. He started the “Free Marijuana Church” in Honolulu, giving away joints and calling himself a “high priest” who had used pot for 40 years.
In 1998, while living in Hawaii, von NotHaus founded NORFED (the National Organization for the Repeal of the Federal Reserve Act and Internal Revenue Code) and began printing his own currency and minting coins.
His Liberty coins, manufactured at the mint in Coeur d’Alene, were marked with a “$,” the word “dollar,” USA and “Trust in God” instead of “In God We Trust,” which is found on U.S. coinage.
The private coin and currency operation would be to the Federal Reserve what FedEx became to the U.S. Postal Service, von NotHaus boasted a decade ago.
Quickly, von NotHaus and NORFED became icons in anti-tax and radical sovereign citizen movements throughout the United States.
Using the Internet and media outlets targeting anti-government ranks, von NotHaus and his sales team also sold Liberty Dollars at redemption centers in nearly every state.
“We never refer to the American Liberty as a coin,” von NotHaus told The Spokesman-Review in 1999. “The word ‘coin’ is a government-controlled term. This is currency that is free from government control.”
In 2004, von NotHaus sold his coins and anti-Federal Reserve philosophy at the anti-government We the People organization’s first convention. The following year, the FBI and Secret Service opened an investigation of von NotHaus and his operation.
In 2006, the U.S. Mint issued a statement warning that the NORFED operation was violating federal law.
The Liberty Dollars – in $1, $5, $10, $20 and $50 denominations – were manufactured under a contract von NotHaus had with Sunshine Minting. His NORFED paper currency, printed elsewhere, was issued with the promise that it was backed by silver bullion in a vault at the Coeur d’Alene mint.
In 2007, FBI agents served federal search warrants at the private mint, located at 750 W. Canfield Ave. in north Coeur d’Alene, and at NORFED’s headquarters in Evansville, Ind., where von NotHaus had moved.
At the Coeur d’Alene mint, federal agents hauled away an estimated 7 tons of Liberty Dollar coins, silver bullion and coinage scraps, along with dies, molds and cast used in the minting operation.
The seizure included 2 tons of freshly minted “Ron Paul” dollars, supporting the candidacy of the Republican congressman from Texas who unsuccessfully sought the 2008 GOP nomination for president.
Search warrants also were served at two Coeur d’Alene accounting firms involved in what a jury has now determined to be a counterfeiting operation.
The criminal indictment brought against von NotHaus only involved coins he manufactured, not the companion paper currency.
Included on the forfeiture list are 8 tons of precious metals, including 168,599 silver Liberty Dollars in various denominations, an additional 1,000 pounds of silver bullion and 3,039 pounds of copper coins.
Initially, the value of silver in the Liberty Dollars was less than their face value, and von NotHaus eagerly took Federal Reserve notes for their purchase. Over the past years, the value of silver has risen from $20 to about $35 an ounce, so the government-seized contraband now has a higher value.
With the Liberty Dollars now viewed as contraband by the federal government, their numismatic value to some coin collectors is reportedly skyrocketing.
“They’re sort of treating these Liberty Dollars like they were cocaine – you know, illegal,” Michel said. “That’s certain to drive the price up.”
No one is certain how many Liberty Dollars remain in circulation or in the hands of collectors, but it’s believed to be more than the $20 million estimate from a decade ago.
The defense attorney said the case was a political prosecution and promised to vigorously oppose the government’s forfeiture attempt contained in the criminal indictment brought against von NotHaus. U.S. District Court Judge Richard Voorhees – not a jury – will decide if the assets should be forfeited.
Michel said the coins and bullion seized in Coeur d’Alene not only belong to his client but to an estimated 250,000 purchasers throughout the United States.
The defense also contends that 16,000 ounces of silver seized at Sunshine Minting belonged to Mary S. Nothhouse, the defendant’s mother, and shouldn’t be subjected to forfeiture.
To bolster that claim, the defense has introduced a legal declaration from Tom Power, the current owner of Sunshine Minting.
Sunshine Minting and Power were not criminally charged in the case, but Power was subpoenaed to testify at von NotHaus’ trial in Statesville, N.C. Power, who was not called as a witness for either side, did not return calls for comment.
However, his attorney, Ronald A. Van Wert, of Spokane, said Power isn’t “taking sides in this action.”
Power became owner of Sunshine Minting in 2007, eight years after the private mint began manufacturing the Liberty Dollars.
“It’s like making widgets,” Van Wert said. “You get paid and make the widget. We had no involvement with what he (von NotHaus) did with the coins after they were minted.”
On March 18, after an eight-day trial, a 12-member federal jury in Statesville deliberated only 90 minutes before convicting von NotHaus of making coins “resembling and similar to U.S. coins” and issuing, passing, selling and possessing Liberty Dollars intended for use and common currency.
A sentencing date hasn’t been set, but von NotHaus faces up to 15 years in prison and a $250,000 fine. He remains free on bond, temporarily living in North Carolina. Through his attorney, he declined an interview request.
1992 murder trial begins against sex offender 
DHF on April 03 at 5:46 a.m.
You can buy Funny Money from ads in magazines, ads on TV thats minted all over the place. Whats the difference. Your just wasting your money as it is nothing more than a conversation piece.I would like to think that the Justice Dept. has better things to do. Another waste of taxpayer money.
berrybestfarm on April 03 at 8:15 a.m.
Fascinating case. Although the news story may not have all the relevant facts, if I’m reading it right there are no criminal charges, only civil. This would be a very dirty, back door assault on what is otherwise lawfull behavior. The charge appears to be competition with the government by making coin—Bad when it comes to making money but just fine if it generates tax dollars. The jury can only go by the definitions they are told to use in their instructions. You can be sure the government will pull all stops to put this down and make an example out of this case. Yes, it is this sort of insidious activity by government that leads to revolution.
Dennis Patterson—Deer Park
SpokaneLiberal on April 03 at 9:06 a.m.
He was convicted of criminal not civil charges. They charged him with counterfeiting and augmented that with the assertion this was an act of domestic terrorism. I find that ridiculous. But the charges of counterfeiting seem to have strong standing under the law.
My question is how is this illegal and yet company script (not for wages), Christmas script to promote local economies, etc. is not illegal (or at least not prosecuted)?
berrybestfarm on April 03 at 9:17 a.m.
Thanks SpokaneLiberal—My bad, the conviction is criminal, the forfeiture is civil.
Dennis Patterson—Deer Park
opeled on April 03 at 10:30 a.m.
go to a seach engine, type in “history of the federal reserve”..that is what is behind all of this
polistra on April 03 at 10:45 a.m.
Here’s a nice current example of a ‘town scrip’ that isn’t being bothered by the FBI.
http://www.thenewstribune.com/2011/01/23/1513629/booster-creates-scrip-to-help.html
Interestingly, the creators of this ‘scrip’ also have a clear connection to legalizing marijuana.
What’s the diff? They’re hippies. Von Nothaus, though he’s doing and advocating the same things, is the opposite of a hippie.
Since Watergate, FBI has been perfectly comfortable with hippies and communists, and lethally uncomfortable with anti-communists.
oneanddone on April 03 at 11:47 a.m.
How long before the Idaho Politburo files suit against the Federal Gov’t for infringing on the rights of Idaho citizens. Certainly Hart is their hero.
maria on April 03 at 12:41 p.m.
Hmmmmmm……
http://www.kkklan.com/restrikes2.htm
RedCedar on April 03 at 1:02 p.m.
Wow… lots of different angles to this one… How in hell can you “counterfeit” a one-ounce disk of silver? I kept reading the article for the part where they accused him of selling silver-plated zinc or something, but there was nothing about that in there. Sunshine Mint will have a die made and stamp whatever you want onto a piece of silver or gold.
Von Nothaus may well be a flim-flam artist, and the people who bought his paper money may have been conned, but this is no more a case of “domestic terrorism” than it is for somebody to pass a bad check.
What’s scary about the whole “civil forfeiture” thing is that there’s very little recourse for the person whose property is confiscated. They can’t get a jury trial. There’s little chance they’ll ever get their property back. Essentially what the government does is “arrest” their money. The whole civil forfeiture concept is bound to corrupt the criminal justice system because now, like in third-world countries, the law enforcement agencies get to take the property of alleged criminals. That can’t help but make them bias their investigations towards those who have a lot of good property to take. Why bother going after a lousy murderer or rapist who probably doesn’t have a penny to his name, when you can bust a big-time drug distributor or investment scam promoter who’s worth millions?
What’s particularly egregious here is that the feds appear to be confiscating the silver owned by innocent people who foolishly let Von Nothaus store it for them. Can you imagine the outcry if they did that with any of the legitimate banks? Say Citibank gets caught in some sort of funny slight-of-hand with, oh, say, mortgage pools turned into SIVs and CDOs (I know they’d never do it, but just imagine for a moment), so the Feds come in and arrest the CEO (on the same day they hold the Stanley Cup playoffs in hell, I know), but then they also confiscate all the money of all the people who have bank accounts at Citibank. That’s exactly what’s being done here by doing a civil forfeiture against the money that unwise people let Von Nothaus store for them.
About 20 years ago, something similar happened with Craig Rhyne in Seattle, but in that case, the prosecutors treated the victims as victims rather than as co-conspirators. Eventually they got a plea bargain with Mr. Rhyne and he agreed to pay back the money that people had lost by holding certificates for silver that didn’t really exist. Something like that would be the right way to approach this. Instead it appears that the feds want to prosecute the entire concept of people owning non-numismatic precious metal rounds as an alternative to US currency. In other words, they’re trying to go after the whole class of people who doesn’t trust the government.
This sort of prosecution couldn’t be better designed to prove, in fact, that said government is not to be trusted. Not only are they claiming that a common con-man is a “terrorist” (what’s next, jaywalking as a terrorist offense?) but they’re punishing, without any recourse or due process of law, the very people he’s conned.
hawken on April 03 at 1:13 p.m.
Those on the left, and too may on the right, who deny the heavy hand of government, will not see otherwise until they are the victim.
Just look at our constitution. The greatest threat to the new republic, the United States of America, per the constitution, was over-reaching, tyrannical, government.
All of the safeguards built into our constitution had to do with the normal “tyranny” of our own government.
Of course, “loyalists” of the day, at our founding, saw no problem with the tyranny of government. It was the “patriots” that fought against the tyranny of government.
These are “historical facts,” not just my conservative, patriotic, “so-called far right extremist” world view, by the left.
Having said all of the above, I will wait for the judicial process to work to its conclusion. Which many of the liberals above have not done.
SpokaneLiberal on April 03 at 1:13 p.m.
It is worth noting the case began under the previous administration and was finished under this one by an relatively autonomous prosecuting attorney. So it is not an anti-conservative prosecution.
It is a “terrorist” action because it is designed to undermine the legitimate US currency (ridiculous).
It is counterfeiting because he specifically marketed it as a competing private currency within the US economy. If it was “discs” of silver for commemoration that is probably not counterfeiting, but as an alternative for commerce it is a violation.
eagleproducer on April 03 at 4:06 p.m.
Hawken: Like any one needed you to reset your “values.”
redcedar: Yeah, right… the criminal justice system always goes after wealthy people before targeting the poor. That’s why are prisons are packed with The Hiltons and Rockefellers.
RedCedar on April 03 at 6:01 p.m.
eagleproducer, I never said they throw the rich in prison. I said the “civil forfeiture” law gives prosecutors and police agencies an incentive to go after the millionaire criminals. I’ll modify that and say that they’ll go after the millionaires, but not the billionaires, since the latter can afford the best lawyers and senators that money can buy.
My bigger point, though, is that it’s as wrong to confiscate the silver owned by the victims of this con man as it would be to confiscate the deposits in the bank accounts at a bank that did something illegal. In these investment scams, the prosecutor’s role ought to be to try to make the victims as nearly whole as possible, not to punish them for trusting the crook.
lee1954 on April 03 at 7:33 p.m.
this guy did nothing wrong..his money is backed by precious metals and..guess what? his dollars grew in value because it is backed by gold,silver or copper thats how it used to be.. and the money the fed prints is backed by nothing..he acted as his own bank and like any other private bank would..also since the govt. took his assets the value of the assets have gone up..go figure…how can this be a form of terrorism when his money is increasing in value since its backed by precious metals? this is an attack on…wtf?..the american dollar is worth about what? ten cents? the fed wants us on their system because they charge big interest that can never be paid back..look at the debt..its impossible to pay the fed back..its too much..the fed priints money and then charges interest the money has no backing and you will never be out of debt because of the interest..this guys money has real value and its a threat to the banks printing worthless money so they are going after him..
lee1954 on April 03 at 7:42 p.m.
it seems to me that the federal reserve is the one printing counterfit money..
MrNatural on April 04 at 9:24 a.m.
Yeah…this story tells me what I’ve known all along about this penchant for immature condescension among bone-headed seditionists…it’s more fun to screw over this nation with an angle and get your 15 minutes of fame than try to work with it to make it a better place…clowns like this von NotHaus disgust me…
morgoth37 on April 04 at 8:56 p.m.
It is sheer nonsense and unabashed hyperbole that Von NotHaus engaged in behavior that constitutes “domestic terrorism”. But that’s a pretty good description of Ben Bernanke, chairman of the Federal Reserve and his actions to date. A good article with 6 reasons to buy silver is Why You Must Buy Silver Noiw! http://survivalus.blogspot.com/2011/02/why-you-must-buy-silver-now.html
RedCedar on April 04 at 10:56 p.m.
Based on the comments here, the feds are lucky they don’t have to give the guy a jury trial.
DemoDriver on April 06 at 1:41 p.m.
Companies can issue their own scrip. Cities can issue various forms of scrip—partnering with merchants. Then there’s cupons.
Last I checked, barter IS legal! You can trade a rifle for an old pickup, two cows for a horse, etc, so what’s the difference? Provided you’re representing bartered goods as such and not as legal tender (and that the necessary paperwork is kept, that the books are square) then there can be no actual crime in trading a piece of silver, gold, platinum, palladium, etc for whatever legal good or service your heart desires.
Methinks calling it a “Liberty **Dollar**” was the only sin here—that these commerative precious metal discs were represented as currency.
Putting an image of Texas Senator Ron Paul on some of them probably din’t help his case much, as DHS Secretary Napolitano once branded Paul supporters as “potential terror threats” not so long ago.
Sadder still that the Feds don’t need a jury. It would be nice to see this one dismissed. If there truly was a con-game going on, then let the victims get their satisfaction in a class-action suit instead of wasing tax dollars on such a colossal non-sequiter as this.