Counterfeit Conviction

Liberty Dollar prosecution

In March a federal court in North Carolina convicted Bernard von NotHaus on three counts related to making and distributing counterfeit coins. Von NotHaus faces a possible sentence of six months to 25 years in federal prison because of the Liberty Dollar, a private currency he launched in 1998. His conviction was based on the premise that a minted round of nearly pure silver that is neither the same size nor denomination as any existing U.S. coin and does not display identical imagery is nonetheless a counterfeit of U.S. currency. In a press release announcing the conviction, U.S. Attorney Anne Tompkins described the Liberty Dollar as a form of "domestic terrorism."

Von NotHaus, who once ran an organization called the National Organization for the Repeal of the Federal Reserve and Internal Revenue Codes, explicitly advertised his silver product as competition to federal fiat money. He called the Liberty Dollar a "voluntary private barter currency," a phrase that appeared on the coins in later mintings.

Von NotHaus' lawyer, Aaron Michel, has filed a motion for a new trial, arguing that "there was insufficient evidence that the Liberty Dollars were counterfeits of United States coins and that Mr. von NotHaus acted with the necessary criminal intent." At press time, U.S. District Judge Richard Vorhees had yet to rule on the motion.

The government also confiscated around $7 million worth of silver, much of it the legal property of von NotHaus' customers. He is involved in a separate legal action to win that property back. A one-ounce Liberty Dollar denominated at $20 back in 2007 would now be worth more than twice as much for the silver.  

Comments

[Bruce]

I'd love to read the pleadings in the case. As a lawyer, I don't see how fake coins that don't look ANYTHING like real US currency can possibly be "counterfeit" money, let alone support evidence of intent to counterfeit. This case should have been dismissed.

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ThaNk U

[Dave R]

New to the site, reading the archives.

This case has always confused me. I can't see how this guy is doing anything different that the Franklin Mint or any of the other makers of commemorative coins. Just because someone says that a coin is "legal tender" doesn't mean it really is such. Some countries have "legal tender" that isn't even worth the price of the paper and ink used to print it in US dollars.

These "coins" have the same intrinsic value as as any other object--whatever you can trade them for in other goods. "Money"--all money--is just a way to make these trades easier. For instance, rather than having to find a shoemaker to trade my vegetables to for a pair of shoes and having to bargain with him over how many tomatoes and green beans he should receive, I can trade all of my vegetables to a third party, at once, for pieces of paper. I can then give some of the pieces of paper to the shoemaker for a pair of shoes and have other pieces of paper to trade for other things. These pieces of paper have no real value, they just make barter more convenient.

How is owning or producing 1 ounce bars of silver different than owning or producing 1 ounce disks of silver with pretty pictures on them? I could, if I wanted, trade all of my pieces of paper for bars of silver and use the silver to trade for the things I need. However, I apparently can't do the same with disks of silver with pretty pictures, or at least not these partcular disks.

Based on my years of law enforcement experience (I've been retired for 5 years), I seem to remember that counterfeiting is the process of reproducing, as accurately as possible, the items that a government says is "legal tender" without the permission of that government and then using the reproductions in your barter activities rather than using the official items authorized by the government in question. It appears that the coins this guy is producing look nothing like any money anywhere in the world, past or present, and yet the US government claims he is counterfeiting US "legal tender" or some such.

I agree with Bruce that that this is abuse of the legal process but, in my opinion, any competent investigator would have never presented this case for prosecution in the first place.

[alaamiah]

NotHaus on three counts related to making and distributing counterfeit coins. Von NotHaus