Defendant Convicted of Minting His Own Currency

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goes211
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Defendant Convicted of Minting His Own Currency

Do you still believe we are free to transact in PM's.  Do you really need more proof that banking cartel does not want competition.  The quote from the US Attorney stating  "Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism" is chilling.  You know what they do to people they call terroist nowdays?  The poor guy will probably be in Gitmo by Monday morning.  Wink

http://charlotte.fbi.gov/dojpressrel/pressrel11/ce031811.htm

Defendant Convicted of Minting His Own Currency

 

STATESVILLE, NC—Bernard von NotHaus, 67, was convicted today by a federal jury of making, possessing, and selling his own coins, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Following an eight-day trial and less than two hours of deliberation, von NotHaus, the founder and monetary architect of a currency known as the Liberty Dollar, was found guilty by a jury in Statesville, North Carolina, of making coins resembling and similar to United States coins; of issuing, passing, selling, and possessing Liberty Dollar coins; of issuing and passing Liberty Dollar coins intended for use as current money; and of conspiracy against the United States. The guilty verdict concluded an investigation which began in 2005 and involved the minting of Liberty Dollar coins with a current value of approximately $7 million. Joining the U.S. Attorney Anne M. Tompkins in making today’s announcement are Edward J. Montooth, Acting Special Agent in Charge of the FBI, Charlotte Division; Russell F. Nelson, Special Agent in Charge of the United States Secret Service, Charlotte Division; and Sheriff Van Duncan of the Buncombe County Sheriff’s Office.

According to the evidence introduced during the trial, von NotHaus was the founder of an organization called the National Organization for the Repeal of the Federal Reserve and Internal Revenue Code, commonly known as NORFED and also known as Liberty Services. Von NotHaus was the president of NORFED and the executive director of Liberty Dollar Services, Inc. until on or about September 30, 2008.

Von NotHaus designed the Liberty Dollar currency in 1998 and the Liberty coins were marked with the dollar sign ($); the words dollar, USA, Liberty, Trust in God (instead of In God We Trust); and other features associated with legitimate U.S. coinage. Since 1998, NORFED has been issuing, disseminating, and placing into circulation the Liberty Dollar in all its forms throughout the United States and Puerto Rico. NORFED’s purpose was to mix Liberty Dollars into the current money of the United States. NORFED intended for the Liberty Dollar to be used as current money in order to limit reliance on, and to compete with, United States currency.

In coordination with the Department of Justice, on September 14, 2006, the United States Mint issued a press release and warning to American citizens that the Liberty Dollar was “not legal tender.” The U.S. Mint press release and public service announcement stated that the Department of Justice had determined that the use of Liberty Dollars as circulating money was a federal crime.

Article I, section 8, clause 5 of the United States Constitution delegates to Congress the power to coin money and to regulate the value thereof. This power was delegated to Congress in order to establish and preserve a uniform standard of value and to insure a singular monetary system for all purchases and debts in the United States, public and private. Along with the power to coin money, Congress has the concurrent power to restrain the circulation of money which is not issued under its own authority in order to protect and preserve the constitutional currency for the benefit of all citizens of the nation. It is a violation of federal law for individuals, such as von NotHaus, or organizations, such as NORFED, to create private coin or currency systems to compete with the official coinage and currency of the United States.

Von NotHaus, who remains free on bond, faces a sentence of up to 15 years’ imprisonment on count two of the indictment and a fine of not more than $250,000. Von NotHaus faces a prison sentence of five years and fines of $250,000 on both counts one and three. In addition, the United States is seeking the forfeiture of approximately 16,000 pounds of Liberty Dollar coins and precious metals, currently valued at nearly $7 million. The forfeiture trial, which began today before United States District Court Judge Richard Voorhees, will resume on April 4, 2011 in the federal courthouse in Statesville. Judge Voorhees has not yet set a date for the sentencing of von NotHaus.

Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism,” U.S. Attorney Tompkins said in announcing the verdict. “While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country,” she added. “We are determined to meet these threats through infiltration, disruption, and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government.”

The case was investigated by the FBI, Buncombe County Sheriff’s Department, and the U.S. Secret Service, in cooperation with and invaluable assistance of the United States Mint. The case was prosecuted by Assistant United States Attorneys Jill Westmoreland Rose and Craig D. Randall, and the forfeiture trial is being prosecuted by Assistant United States Attorneys Tom Ascik and Ben Bain Creed.

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Re: Defendant convincted of minting his own currency.

The U.S. Attorney for the district of North Carolina is quoting from is Veazie Bank v. Fenno, 75 US 533 (1869).

This case dealt with the constitutionality of an 1866 federal statute taxing private state bank notes at a 10% annual rate in order to drive them from circulation.  It is well worth a read, as the justices talk about the history of paper money in the United States.  http://supreme.justia.com/us/75/533/case.html

But Mr. Nothous was not convicted of printing a "competing currency," as that is not a crime despite the deceptive implication of the U.S. Attorney that it is.  Chris Martenson himself has worked on community currency projects all around New England.  Nothous was convicted of minting coins that were deceptively similar in appearence to a U.S. coin.

On that count, let's face it, you can't come up with a design that is this close to U.S. coinage by accident:

I am 100% in favor of gold and silver-backed currencies which freely compete with Federal Reserve Notes.  But if I was on that jury, I would have voted to convict Nothous, too.  A recent immigrant from any European nation could easily be fooled into thinking that one of these "Liberty Dollars" was a U.S. coin.  Again, I am all in favor of freely circulating private coin and currency, but you can't copy other people's commercial coin designs and trademarks, and you can't imitate national coins.

Clearly, he was trying to use a deceptive similarity to U.S. coins in order to bolster the circulation of his coins.  Guilty as charged.

The question of Congress' right to restrain circulation of competing paper currencies through taxation or regulation is a completely different matter, and I highly recommend reading Veazie Bank v. Fenno as a good starting point for a discussion here.  The 1869 court went into some detail about the intention and meaning behind the "states may only make gold or silver legal tender" provision of the Constitution, which was intended to eliminate state "bills of credit," which had circulated as currency prior to the Revolution (and on which the colonies often defaulted).  The Federal government itself was left free to print paper money, as paper money was then the common means of paying for war (as they did in 1812).

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18 U.S.C. § 486

jrf29,

Thank you for taking the time to respond.  You clearly know much more about this than I do and I truly hope you are correct.  The included statements comparing a competing currency to terrorism are so over the top, I just can't believe that this can happen in America.  There is some good info in wikipedia about this.  One thing it mentions is that he was also charged with violating 18 U.S.C. § 486 which states...

TITLE 18 > PART I > CHAPTER 25 >

 § 486. Uttering coins of gold, silver or other metal

Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years, or both.

I am not a lawyer but this does not sound benign to me.

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18 U.S.C. § 486

Hi Goes211,

Sec. 486 certainly isn't innocuous, and it demonstrates that if they can do it with coin, they can probably feel they have the authority to do it with paper currency as well.

Thank you for catching my mistake.  As I said above, it is legal to circulate paper as money as long as it doesn't, with intent to defraud, resemble U.S. currency or another currency.  See 18 U.S.C. § 491.  I assumed (without checking, stupidly) that because it is legal to circulate paper, it should also be legal to mint coins so long as they don't resemble national coins.  But you are quite right: it is illegal to circulate a coin or token of any size or shape as money, whether or not it resembles U.S. or foreign coin.

So it appears that you can freely circulate paper money, even paper money backed by gold or silver -- thus the widespread community currency initiatives --  but you cannot circulate coins at all.  Peculiar.

A federal district (trial level) court case, United States v. Gellman, 44 F. Supp. 360, discusses the meaning of § 486:

District Judge Nordbye wrote:

"A reading of these sections induces the view that they were primarily adopted to prevent the coining of money in competition with the United States; resemblance or similitude is not necessarily an element. The United States has the sole power to coin money under the Constitution, and if anyone, individual or State, assumes to supplant the medium of exchange adopted by our Government, or assumes to compete with the United States Government in this regard, a violation of these statutes would follow. Undoubtedly, no one can interfere with the monopoly which this Government has obtained by reason of the Constitutional provisions without running afoul of these statutes. If one manufactures a coin, a five cent piece, for instance, in an oblong shape, and although much larger than a genuine five cent piece, for the purpose of circulation as money within any area of the United States, a violation would occur. But the intendment must be that the coin shall be "for the use and purpose of current money" under Section 281, and "to be used as money" under Section 282 [now 486]. Now, money is a medium of exchange. It is something which has general exchangeability as such..."

In other words, sec. 486 is just as bad as it looks.  As I said, I would happily vote for a conviction of Nothaus for circulating a coin "in resemblence or similitude" of coins of the United States in violation of  §§ 485, 489 of Title 18, chap. 25.  I think he deserved it, and I think that law is common sense.

As to the legal prohibition against circulating any coins as money?  I am not happy about it.

It's laws like this that should remind us that the jury system is the best protection against an overbearing government.  Should U.S. currency deteriorate very badly as a medium of exchange, it will probably be quite difficult to consistently find a jury of twelve people unanimous in their willingness to convict, or a judge (whose retirement savings was recently obliterated) willing to give harsh sentences.

But that doesn't make §486 any more likeable.  I agree: it's a wrong-headed law.  There ought to be free market competition in both coin and paper currency.

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First, the Liberty Dollar

First, the Liberty Dollar does not seem to me to resemble any US coin, so IMO it is not counterfeiting. I would have voted not guilty, nulliflying the unconstitutional law "486." Showing only the obverse side in the picture above is misleading. Here's both obverse and reverse:

Saying that someone somewhere may be fooled doesn't impress me.

It seems to me that both parts of the US code that Hothaus was convicted of are unconstitutional. They are supposedly based on Section 8 phrase 5 of the US Con: [The Congress shall have Power] "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures." Nowhere does the Con give congress the power to prevent private parties from coining money or setting up competing money systems. Interestingly, this is the same trick the US used in the 1830s to try to prevent Lysander Spooner from competing with the US Post Office. Spooner correctly argued that the constitutional power to distribute mail does not imply a power to prevent others from distributing mail.

I agree that Hothaus was skating on thin ice with his decision to 1) put "USA" on his coins, and 2) inscribe a US $ value. But I still would have voted not guilty were I on the jury, since the Liberty Dollars were not similar enough to be counterfeits or fraudulent. The marketing decision to have a pegged US$ exchange rate (and inscription) was IMO a mistake. Future monetary architects should use troy ounce or some other unit of weight, avoiding the headaches of revaluing whenever silver rises.

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18 USC 486 exceeds 1787 legal meaning of "counterfeiting"

The Anglo-American common law tradition provides the meanings of the legal terms of art used in the U.S. constitution, except for "treason", which is redefined there. However, you will not, in general, find succinct definitions of terms in that tradition, which disdained dictionaries. You have to look to examples of usage, which takes diligent research.

18 USC 486 is allegedly authorized by the Counterfeiting Clause, but is deceptively vague in its use of the word "resemblance", which by original usage had to be so close as to be indistinguishable except by close examination. None of the Norfed coins are close enough to fit that meaning. I find that usage in the statute to be void for vagueness.

Moreover, it is not "counterfeiting" if the coin that allegedly "resembles" a U.S. coin exceeds the value of that coin. It has to be worth less to be "counterfeit".

The clause about "original design" far exceeds the authority of the Counterfeiting Clause. Nor can it get more authority from the Necessary and Proper Clause, which only authorizes incidental enabling powers, not expanded ones. See http://constitutionalism.blogspot.com/2010/12/unnecessary-and-improper.html

 

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18 USC 486 properly applies to the Federal Reserve

The Federal Reserve and its notes are private, and it is unconstitutional for Congress to make them legal tender, except perhaps on non-state U.S. territory. It does not, of course, issue coins, so it falls under "securities" or "bills of credit".

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The photo in post 4 show

The photo in post 4 show that the coin says "dollar".  My understanding is that you can create your own money and give it your own name, but you can't create "dollars".  There are private mints that issue commemorative coins and rounds without legal issues.  And why would he say "Twenty dollars" when the price of silver is highly changeable?  This guy sounds very foolish to me.

Travlin 

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Got to give the guy credit

Got to give the guy credit for ingenuity. I've heard of counterfeiting, but minting your own currency? Classic.

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Update....

From todays Wall St. Journal.

When Private Money Becomes a Felony Offense

The popular revolt against a declining dollar leads to a curious conviction.

By SETH LIPSKY

The next chapter in the struggle over sound money may be the case of a newly minted felon named Bernard von NotHaus. Mr. von NotHaus was convicted this month of counterfeiting money by issuing silver coins called Liberty Dollars. His company's website says it's been taken down by court order, and absent a successful appeal he could spend years in jail.

 Mr. von NotHaus was convicted under a section of the United States Code that makes it a crime to manufacture or pass "any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design." The law was enacted during the Civil War, soon after the Union began issuing the paper scrip known as greenbacks.

It is too soon to say what Mr. von NotHaus's grounds of appeal will be, but it is not too soon to say that his case will be one to watch at a time when so many believe our economic troubles are tied to the fact that the dollar has become a fiat currency, and when leaders world-wide are calling for a new reserve currency.

...

The warning is contained in paragraph 33 of the indictment handed up against Mr. von NotHaus in a courtroom at Statesville, N.C. It said:

 

"Article 1, Section 8, Clause 5 of the United States Constitution delegates to Congress the power to coin money and to regulate the value thereof. This power was delegated to Congress in order to establish a uniform standard of value. Along with the power to coin money, Congress has the concurrent power to restrain the circulation of money not issued under its own authority, in order to protect and preserve the constitutional currency for the benefit of the nation. Thus, it is a violation of law for private coin systems to compete with the official coinage of the United States."

 

Yet a curious thing happened in the courthouse on the day before the jury went to deliberate. According to Aaron Michel, Mr. von NotHaus's attorney, the judge granted Mr. Michel's request to delete paragraph 33 from the indictment.

...

Yet after Mr. von NotHaus was convicted on March 18, the government issued a press release trumpeting the verdict and repeating the part of the original indictment that the judge had struck out. The release also went further, asserting that Congress's power to coin money under the Constitution was also meant to "insure a singular monetary system for all purchases and debts in the United States, public and private."

It again asserted that it is a violation of federal law for individuals—such as, it added, Mr. von NotHaus—"to create private coin or currency systems to compete with official coinage and currency of the United States." So much for the judge's view that the paragraph was unsupported by evidence in the case. The U.S. Attorney's office did not respond to a request for comment.

...

Certainly it's a loser's game to suppress private money that is sound in order to protect government-issued money that is unsound. For, as was once said by the same Abraham Lincoln who brought in the greenback to finance the great cause of the Union, you can't fool all of the people all of the time.

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Good find Goes211(still love

Good find Goes211(still love your handle).

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The Death of Silver and the Liberty Dollar

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Not currency.

I'm shocked that they missed something basic.  Currency, is backed by a country, by a central bank.   Thus, this is NOT currency.  Sorry.  This guy got a bad lawyer.   This has been the "bitcoin" decision, both in NY and Florida.  This was a "gold" investment, in the form of a round shape.  The domestic terrisim charge is a little reaching as well, the Federal Reserve is PRIVATE.   Finding a better investment then the USD is everyone's objective.   Sooner or later, it will happen.  And......snap.....no time to correct...things go bad. 

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