The folly of trusting gummint

[AMonger]

One more example of what happens when gummint is the arbiter of their own powers. Going to the government to appeal the actions of government is like yelling, "STOP! THIEF!" and expecting him to bring back your wallet.

U.S. Mint Keeps $80 Million in Coins Sent to It for Evaluating

Written by Gary North on September 10, 2012

Some people trust the U.S. government to protect their interests rather than the government’s interests. This is a very risky position to take.

A family found ten 1933 gold coins in their father’s safety deposit box. The coins were produced after the May 1 deadline to turn in all gold.

The family did not pay inheritance taxes on the coins. This was a mistake. Then it sent the coins to the Mont for evaluation. This was a bigger mistake. They were worth $80 million, private estimates said, so the Mint kept them. It said the man had stolen them in 1933. It offered no proof of this theft.

The statute of limitations for theft is seven years. But that applies only to things stolen from private citizens by private citizens. It apparently does not apply to things worth $80 million that the Mint says were stolen from the Mint, as defined by the Mint.

The case has been in court over a year. A judge recently upheld the Mint’s position.

The family plans to appeal the decision.

The problem here should be obvious. The agency that is entrusted with protecting citizens from state tyranny cannot safely be trusted: the U.S. government. Citizens should expect the government to break its own laws whenever its interests are at stake, as defined by a bureaucrat employed by the government whose position is protected by Civil Service legislation.

The family trusted another government bureaucrat to uphold their interests against the government’s interests. That trust was misplaced.

The family has decided to trust another group of judges to overturn the first judge’s defense of the government’s interests. This gets expensive.

 

[Turtle]

One more example of what happens when gummint is the arbiter of their own powers. Going to the government to appeal the actions of government is like yelling, "STOP! THIEF!" and expecting him to bring back your wallet.

Well, if you read the above story, and that's all you really know about it, then the above is a perfectly reasonable characterization. However, if you know the history of these coins, which are quite famous, then a more accurate characterization would be, "STOP! THIEF! Hey! That guy just stole his wallet back! STOP! THIEF!"

The Philadelphia Mint struck 445,500 double eagles in 1933 at the height of the Great Depression, but it pulled them back weeks later when President Franklin D. Roosevelt ordered U.S. banks to abandon the gold standard. The Emergency Banking Act of 1933, which unbelievably was passed before it was actually written down on paper, BTW, gave FDR the power to confiscate gold, in exchange for an equivalent amount of paper currency. That immediately led FDR to issue an Executive Order that stated, "I, Franklin D. Roosevelt, President of the United States of America, … do hereby prohibit the hoarding [of] gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations."

People turned in their gold, but a few gold hoarders hoarded their gold.

There was a window of 3-4 weeks between the minting of certain gold coins and the FDR Executive Order where some gold coins left the mint legally, but none were of the double eagle variety. None of the double eagle coins were ever released by the Mint into circulation. The Smithsonian received two coins. And with most 1933 double eagles having been melted into gold bars, the Smithsonian was thought to have the only two coins left in existence. But, it was soon discovered that a cashier at the Philadelphia Mint named George McCann had stolen 100 of the coins (5 rolls of 20 coins each) and had sold them to a coin dealer.

The dealer who bought the coins from George McCann was a man named Israel Switt, who knew the coins were hot when he bought them. He had paid McCann a large sum of money prior to McCann taking the coins from the Mint, and then another large sum shortly thereafter. Bank records showed withdrawals from Switt's bank account that exactly matched up with deposits the same day to McCann's bank account. The total transferred between accounts was $10,000.

Israel Switt was arrested in August 1934 at the Philadelphia 30th Street Station, when the Secret Service caught him “lugging a bag of $2,000 worth of gold coins.” It was actually $1600 worth, at face value, 80 coins. Switt, along with McCann, was convicted of stealing 100 coins in 1941.

In 1944 the US Mint got wind of a 1933 gold eagle set that was going to be up for auction in New York. They knew the coins were either counterfeit, or the last remnants of the stolen golden eagles. The feds fingered Switt and got the coins up for auction back, nine of them, with a tenth coin having already been sold to King Farouk of Egypt in earlier in 1944, thanks to a federal government clerical blunder with regard to export licenses. But there were still 10 coins unaccounted for. Switt maintained he had no idea what happened to them, and everyone thought they were destroyed, or that the original Mint records were simply in error.

The Farouk coin disappeared for decades, but suddenly reappeared in the mid-1990s, to be sold at a Sotheby's auction in June of 2002. The British coin collector who bought the coin at auction was the unwitting victim of a sting operation that took place at the Waldorf Astoria Hotel in New York at the time of the auction. The coin went for $7.59 million, making it the most valuable coin ever sold. The coin collector didn't get totally screwed, however, as he received about half his money back when the feds compensated him for the coin. They reasoned, correctly, along with numismatist experts, that he overpaid a tad and that the fair market value of the coin in the open market would be about half what he paid. The auction house didn't get to keep any of the money, either, as that would make them a fence and not an auction house. The King Farouk estate got the remainder of the money paid at auction, the fair market value.

But that brings us back to the infamous missing and long-thought destroyed (or not ever missing in the first place) 10 coins found in the safety deposit box belonging to the father of Joan Langbord and her family.

The story above in the OP states, "They were worth $80 million, private estimates said, so the Mint kept them," As if somehow the value of the coins is what cause the government to just up and keep the coins. The story also states, "It said the man had stolen them in 1933. It offered no proof of this theft," as if no proof existed and the government just kept them because they wanted to. End of story, according to the esteemed author of the piece.

Except, the proof is incontrovertible, seeing how that Joan Langbord's father was none other than the one and only Israel Switt, and it was Switt's safety deposit box that Langbord and her two sons drilled open to find the coins, and Switt had already been convicted of stealing those very same coins, the last remaining of those 10 coins accounted for but not yet recovered.

Incidentally, the Langbords lost the first trial in a unanimous jury decision. On appeal, Judge Legrome Davis of the Eastern District Court of Pennsylvania merely affirmed that jury's decision.

Now you know the rest of the story. And it's a fascinating one if you are interested in rare coins.

 

[AMonger]

I sent the author a message to see what he says.
Regardless, the confiscation of gold was itself manifestly illegal, so all confiscated gold was stolen by the government.

 

[Turtle]

That really doesn't have anything to do with stolen gold coins that were never released into circulation, does it? Especially since they were minted prior to the confiscation of gold by the government.

 

[AMonger]

Sure. If gold confiscation was illegal, there was no legal obligation to turn gold in. If President Nimrod ordered us to turn over all our gold tomorrow, it would be illegal and of no effect. So you could hardly be guilty of not turning it in/stealing your own gold. So if you bequeathed it to your progeny and 100 years from now, it turned up, the gummint would have no rightful claim on it.

 

[layoutshooter]

Since when did the government care if something is legal?

 

[Turtle]

You're confusing "stolen coins" with "gold not turned in". The government didn't keep those coins because they were gold that wasn't turned in, they kept them because those coins were stolen from the Mint in the first place. They could have stayed in that safety deposit box for another 50 or 100 years, and they'd still be stolen coins, stolen from the Mint, with the Mint being the sole owner. They could also be made of nickel or iron and they'd still be coins stolen from the Mint, and the Mint would have kept them just the same. The fact that they were struck in gold is irrelevant.

The author of the piece, and apparently you, are fixated on the gold and the dollar value, when neither is relevant. The author brings up the 7-year statute of limitations for theft, as if once the statue of limitations is exceeded it somehow magically transfers the ownership of something that was stolen. The author believes that because the coins were valuable, the government kept them. Period.

Here's a real-life example of that. A little over 8 years ago we had a rather rare Jonesred chainsaw belonging to my step-dad stolen from our garage, at least we were pretty sure it was stolen. We also had our suspect, but couldn't prove anything. It's not a common brand, and it's a model that is designed for heavy, full-time forestry use. Two months ago my step-dad was talking to a fellow he knows, and this fellow mentions that he had a Jonesred chainsaw. My step-dad asked him how long he's had it, and it turns out he's had it a little over 8 years. Interesting. My strep-dad mentioned the stolen chainsaw, and they both noted there isn't even a dealer in town that wells that brand, and figured it was the same saw. But we needed proof. The fellow told who he bought the saw from, which coincidentally was who we thought stole it in the first place.

My step-dad got a hold of the dealer where be bought the saw, got the original sales receipt from 12 years ago that had the serial number on it, and got a hold of a repair receipt from about 10 years ago that also had the serial number on it. He presented the receipts to the fellow, who matched the serial number up with the one he had, and gave my step-dad back his chainsaw. He's going after the guy who sold it to him for his money back. The one who stole it can't be prosecuted, because the statute of limitations has passed, but the saw is and always has been owned by my step-dad.

This is not at all unlike the Farouk coin, or the Switt safety deposit box. The legality or illegality of the gold confiscation gives the background on the coins, same as the "for full-time forestry use" gives some background on the chainsaw, but it's not really relevant to the theft itself.

Those double eagles are legendary in coin collector circles. Especially the Farouk coin and the ten missing Holy Grail of coins, the Switt coins. But no one familiar with them has ever doubted for the slightest the true ownership of those coins.