Feds seize man's $10 million in gold

WASHINGTON -- A Philadelphia antiques dealer says he will sue the U.S. Mint to recover rare gold coins worth millions of dollars after the federal government seized them, claiming they were illegally obtained.

The dealer, discovered 10 "Double Eagle" $20 coins minted in 1933 in a Philadelphia antiques and jewelry store and voluntarily brought them to the U.S. Mint for authentication.

In June, the Mint confirmed they were the coveted Double Eagles but informed the Langbord family that the coins were being sent for safe-keeping to the U.S. Bullion Depository at Fort Knox, Ky., because the family had no right to them, according to the family's attorney.

Only about 25 out of 445,500 are known to have survived destruction after President Franklin D. Roosevelt mandated all privately owned gold confiscated in the U.S. in 1933 – ordering the coins melted down. Two of the coins were given to the Smithsonian Institution in Washington for display.

But a few more survived. The 10 recently discovered were obtained in 1937 by Israel Switt, an antiques dealer and ancestor of the Langbord family, in whose store the coins were found. Switt died in the 1980s.

Mint officials claim Switt got at least 20 of the coins from a cashier at the Philadelphia Mint, later convicted of a crime relating to his work there.

One of Switt's coins is believed to have found its way to the late King Farouk of Egypt, and was auctioned to an anonymous buyer in 2002 for $7.59 million, the largest sum ever paid for a coin. In that case, the government retained title to the coin but agreed to split the proceeds because of a dispute over evidence, a Mint official said.

Barry Berke, a New York lawyer for the Langbord family, argues the Mint cannot prove the coins were illegally obtained and should return them to the family.

Mint officials said no such proof is needed because the coins were never issued and so remain government property. Mint officials say they will fight any lawsuit, and if they succeed the Double Eagles will be shown in museums.

"What we appear to have is yet another example of the U.S. government overstepping its boundaries, further alienating American citizens from conducting free trade of personal property," said Kevin Lipton pf Kevin Lipton Rare Coins in Beverly Hills.

The government claims extraordinary powers under the "Trading With the Enemy Act of 1917," which is still in force. Article 5(b) of the law holds:

• That the president may investigate, regulate or prohibit, under such rules and regulations as he may prescribe, by means of licenses or otherwise, any transactions in foreign exchange for the export, hoarding, melting, or earmarking of gold or silver coins or bullion or currency.
• The president has nearly unlimited power when it comes to money if he deems the monetary system to be in jeopardy.
• It was this section that was used to justify Roosevelt's decision to confiscate gold. President Jimmy Carter later used it to freeze Iranian assets during the hostage crisis. President Nixon used it to take the country off the gold standard.

"Will the president or Treasury use this law against U.S. citizens again?" asks David Bradshaw, editor of Real Money Perspectives. "Don't bet against it."

But he maintains U.S. citizens have a right to own gold.

Just last week, the U.S. Treasury Department told the Gold Anti-Trust Action Committee that the government has the authority to prohibit the private possession of gold and silver coin and bullion by U.S. citizens during wartime and declared emergencies and the authority to freeze their ownership of shares of mining companies.

The Treasury Department's assertions came in a letter to GATA dated Aug. 12 and written by Sean M. Thornton, chief counsel for the department's Office of Foreign Assets Control, who replied to questions GATA posed to the department in January. It took GATA six months to get answers from the Treasury.

Thornton specifically cited the Trading With the Enemy Act, which became law during World War I and applies during declared wars and from 1977's International Emergency Economic Powers Act, which can be applied without declared wars.

When the Trading With the Enemy Act was passed in 1917, gold and silver formed part of the official currency of the United States and were essential to ordinary commerce.

Read more about your right to own gold