View Full Version : The most valuable coins in the world. Maybe.

10th April 2011, 10:55 PM
Note that these coins were in a safe deposit box for 70 years. Maybe SDBs aren't so bad after all.

Rare Coins: Family Treasure or Ill-Gotten Goods?

Published: September 15, 2009

Roy Langbord had guessed that someone in his family might have hidden away a great treasure decades before, but not until his mother had him check a long-neglected safe-deposit box did he realize just how great it was.

Inside the box, opened in 2003, he found an incredibly rare coin, wrapped in a delicate paper sleeve. It was a gold $20 piece with Lady Liberty on one side, a bald eagle flying across the other and, at Liberty’s left, the four digits that made it so valuable: 1933.

The famous “double eagles” from that year were never officially released by the government. Only a few had ever made their way out of federal vaults, and only one had ever been sold publicly, in 2002. The price: $7.6 million.

And there were nine more of them in the safe-deposit box.

But after the Langbord family took the coins to the United States Mint to be authenticated in 2004, they got a rude surprise. The Mint said the coins were genuine and kept them.

The government claims that they are government property stolen from the Mint, most likely in the 1930s, by Mr. Langbord’s grandfather, Israel Switt, a Philadelphia jewelry dealer.

The Langbords went to court and recently won an important ruling. A United States District Court judge has given the government until the end of the month either to give back the coins or go back to court to prove that they were in fact stolen by Mr. Switt, a daunting task after three-quarters of a century.

Nearly a half-million 1933 double eagles were minted before President Franklin D. Roosevelt, shifting the nation away from the gold standard, issued an executive order that made owning large amounts of gold bullion and coins illegal. Two of the coins went to the Smithsonian Institution, and almost all the rest were melted down.

Some, however, escaped that fate, including the coin sold in 2002, which had made its way into the collection of King Farouk of Egypt and later the hands of a British dealer. The government had seized that coin, too, and arrested the dealer, Stephen Fenton. But Mr. Fenton’s lawyer, Barry H. Berke, reached a settlement that allowed that single coin to be issued officially and sold at auction, with the government taking half of the proceeds.

Mr. Langbord, an entertainment industry executive, said he first learned about his family’s involvement with the storied coins in 2002 on a flight to Las Vegas, when he read an account of the Farouk coin’s odyssey in an advertisement for the auction. He was stunned, he said, to see that the dealer who first procured the coin was his grandfather. When Mr. Langbord got off the plane, he said, he called his mother, Joan Langbord, and asked, “Do we have any more of these?” About a year later, the search turned up the safe-deposit box in Philadelphia.

The Secret Service, which polices currency crimes, has argued that all of the double eagles that escaped government control passed through the hands of Mr. Switt, working with a corrupt cashier at the Mint. A Mint spokesman declined to comment on the case because of the litigation.

According to a history of the coins by Alison Frankel, a journalist with The American Lawyer, a United States attorney decided not to prosecute Mr. Switt in the mid-1940s, saying the statute of limitations had passed.

Ms. Frankel wrote in her 2006 book “Double Eagle: The Epic Story of the World’s Most Valuable Coin” that Mr. Switt was “a thoroughly nasty piece of work,” and that a dealer who traded with him called him a “gold coin bootlegger” who continued to sell gold coins long after the practice had been prohibited. The book details the government’s contention that Mr. Switt worked with a corrupt Mint cashier.

Mr. Berke counters such arguments by quoting the Secret Service report on the coins, which explicitly admitted that its investigation “did not conclusively establish when, how or by whom the coins found in circulation were taken from the Philadelphia Mint.”

The Langbords insist that Mr. Switt, who died in 1990, acquired the coins legitimately before the ban, most likely through a gold-for-gold exchange process used by the Mint in those days.

In fact, Mr. Berke said, Mr. Switt was a frequent visitor to the Mint, had plenty of gold to trade for gold coins and probably did so. Proving otherwise will be extremely difficult, he said. “There’s really nobody with contemporary knowledge from the Mint who’s still living,” he said, having sought out former Mint employees for the earlier litigation.

In an interview, Ms. Frankel called Mr. Berke’s success in persuading the judge to shift the burden of proof onto the government in the case “quite an amazing accomplishment” that forces the government “to prove a negative — that the coins could not have gotten out legally.”

Armen Vartian, the general counsel of the Professional Numismatists Guild, agreed. “Nobody can prove conclusively what happened,” Mr. Vartian said. “Anybody who has to do that, I think, is going to fail.”

Mr. Vartian said he would be happy if the Langbords were allowed to sell the coins. “Maybe they were stolen in the 1930s,” he said, “but they certainly weren’t stolen by the people who are holding them now.”

Mr. Fenton, the coin dealer who sold the Farouk double eagle, said that if the coins were allowed to be sold, he would advise selling just one or two a year. With the right timing and a good market, he said, they could bring $4 million to $6 million each, because there are many people who would want to own one.

“This coin,” he said, “has got so much charisma.”

From the New York Times (http://www.nytimes.com/2009/09/16/us/16coin.html).

10th April 2011, 11:08 PM
Government Sues Itself in 1933 $20 Dispute

Just when you thought that the Bleak House of coin litigations was percolating toward a trial date early next year, the contest over who owns 10 1933 $20 gold pieces took a strange turn Dec. 2 as the government of the United States of America sued itself – and Israel Switt, the original supplier of the coins to the secondary market, spoke from the grave in an affidavit filed by the Mint.

It actually couldn’t be stranger. But in case you’ve not been following the case, here’s a quick summary. Israel Switt was a jeweler and sometime coin dealer in Philadelphia who, at various times in the 1930s, sold a series of double eagle coins dated 1933 that the U.S. Mint now claims were never lawful legal tender because they were purloined from the Philadelphia Mint by its head cashier.

The government’s theory turns the laws of legal tender and money on their head, and if applied any more widely than this case, would strike at the heart of commerce, for it would essentially make every coin a suspect for theft from the government once it enters the stream of commerce – no matter how it got there. The same paralysis would take place if it was applied to bank notes.

But it’s the same theory that the government used starting in the 1930s and running into the 1950s to recapture nine other double eagles that found themselves in the hands of collectors, all of whom trace their pedigree back to a dealer or someone else who in turn obtained the coins from Switt. He died in 1990 and his wife Elizabeth is also gone.

Inside the family safe deposit box, which daughter Joan Langbord never entered in her parent’s lifetime – it was drilled open after their deaths – they found 10 double eagles, all dated 1933, and sent them along to the government through their lawyer, Barry Berke, to authenticate them as genuine or prove them counterfeit.

Thoughtful Mint employees in the technical section of the Mint said that they were genuine and, by the way, the Mint has no intention of returning them because the coins can’t be legally held. So Mrs. Langbord, and her two adult sons, sued the government for the return of the coins on a theory that the property was theirs and the government had no right to seize it.

The case was brought in the U.S. District Court for the Eastern District of Pennsylvania, just across from Independence Hall, the current Philadelphia Mint, and not far from jeweler’s row where Switt was licensed to deal in gold after the recall of 1933-1934. It is also not far from where he was arrested for illicit gold transactions.

The coins in question are being held in Fort Knox even as the litigation is consuming hundreds of hours of depositions, and over 120 filed official records with the court. The government recently got into the procedural sticky wicket of suing itself to get legal possession of the coins (it filed an in rem claim under admiralty and seizure rules).

The Mint then admitted all of the government’s 93 allegations, not hard when you stack the deck with the same pabulum that has been regurgitated in other litigations. They cite the 1947 Barnard case in Tennessee where a judge put the burden of proof on the collector to show how and why the coin was legal to own.

They do not answer the question of what effect private gold ownership legalization has; nor the effect of the Coinage Act of 1965, which made legal tender all coins previously produced by the Mint, including the demonetized Trade dollar and, presumably, the 1933 $20. They also cough up the surprise witness, Israel Switt himself.

Says Switt in his affidavit: “My first recollection of having bought and sold 1933 double eagle gold coins was about the beginning of February 1937. This gold coin I received in a collection with other coins, which I purchased under circumstances which I do not remember at this time.

“This coin I sold to James G. Macallister and also sold Mr. Macallister during the ensuing months of 1937, four similar coins, a total of five. I also sold two of these coins to Ira Reed, 37 S. 18th St., Philadelphia, and two more of the same type of coins to Abe Kosoff, [Kosoff] now located at 50th & Madison Avenue, New York City. These sales to Kosoff and Reed were two or more years after my sales to Macallister.

“These nine coins I distinctly recall having sold but I do not remember when, where or from whom I purchased them, as they were received by me in collections with other coins at different times.”

He then concludes by saying, “I do not have any of these coins in my possession or under my control at this time.”

Government attorneys say in substance he lied. Hard to cross-examine a dead man. They also draw a series of conclusions which are not evidentiary, but are leaps of faith. They reiterate that the coin is illegal, but never satisfactorily answer how one was licensed by them to go to King Farouk in Egypt or how, in the 1990s, they agreed after litigating, to split the proceeds of a $7 million auction with the person who subsequently owned that coin.

For some reason, the same government never felt compelled to account to the true owner of that coin under their theory – the government of Egypt, which seized Farouk’s assets in a 1952 coup d’etat.

So more pleadings and motions and a forthcoming trial. Stay tuned for the next twist.

From Numismaster.com (http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=8857)