I've posted a link to a story that is on Yahoo news today about the legal battle over a stash of 1933 Double Eagles that were found a few years back. The 1933 Double Eagle, as many know is one of the most coveted and valuable US coins ever produced. It is believed that all but 13 were melted by the US Government when FDR outlawed private ownership of Gold in 1933. One of the survivors sold at auction for 7.6 million.
There are 10 coins in the stash. The government wants them back. They claim the coins were illegally stolen from the US Mint. The treasury Dept has seized the coins, and locked them away in Fort Knox. The family claims they should be allowed to keep the coins and profit from their sale. The total profits from the sale of these coins could bring up to $80 million. The case goes to court this week.
Where do you stand CoinTalkers? Read the story in the link for more details. Do you think the family should be allowed to keep the coins, if they are, should they have to pay inheritance tax? Or does the US Treasury have a legal right to the coins?
I feel that the family has the right to keep them.
First, it is my understanding that some of these were delivered to the cashier's cage at the Mint prior to FDR's proclamation. However, records kept at the cashier's cage apparently did not itemize coins by year of production. So, it is possible that Mr. Switt legally exchanged a like amount of Double Eagles of earlier dates for the 1933 Double Eagles before the recall occurred. The government cannot prove otherwise.
The government contends that they were taken illegally because the 1933 Double Eagles had never been officially monetized. If, in fact, the cashier at the Mint had made the exchange with Mr. Switt, it would be my opinion that they had been officially monetized by virtue of the fact that a valid transaction had been effected. Again, the government cannot prove otherwise because all parties involved are no longer living, so their contention is mere speculation.
Even if an act of official monetization had not occurred in 1933, the government did officially monetize one such coin, the King Farouk specimen, in 2007 to allow it to be sold at auction. How can the government claim that one coin is legal but all other specimens extant are not, especially since it cannot be proved that an illegal transaction occurred.
Your link mentions that it appears that no inheritance tax has been paid on the coins since Mr. Switt's passing in 1990. Isn't there a statute of limitations that would apply to this? If so, the non-payment of an inheritance tax would be irrelevant.
>The settlement was particular to the coin owned by the Royal. American citizens aren't allowed to steal like foreigners...unless you join a union.<
If you're referring to the coin owned by King Farouk of Egypt that was exempt from legal sanctions, I believe. If I remember correctly it was the only coin legally transferred of the 1933 series. Wasn't it a gift to the King?
I agree, the coins should be returned to the family. However, there was some speculation (fueled by the government?) that the jeweler had an illicit relationship with the cashier or another mint employee. Over the years I've read several articles about that series.
edit 7/8/11 7:38pm
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My memory is faulty. My refernece to the king acquiring the coin in the 1950s is incorrect. he lost the coin in a military coup in the 1950s
" . . . The strategic importance of the region, made King Farouk of Egypt one of the most heavily courted Monarchs by the U.S. State Department. What Farouk wanted, he got, and Farouk was a world class coin collector. The U. S. government issued him an export license for a coin that was illegal for Americans to own.
By 1953, a military coup resulted in the ouster of King Farouk. A great deal of his property was “seized” in the name of the people. . . "
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The 1933 Gold Double Eagle, designed by Augustus Saint-Gaudens, sold for the highest price in the world ever paid for a coin, $7.5 million U.S. dollars, in 2002. (This is the obverse.)
The U.S. Gold Double Eagle, Saint-Gaudens type, had been issued from 1907 until 1932. Although 445,500 Double Eagles had been minted with the 1933 date, none were released into circulation because of changes made to currency laws during the Great Depression. In an effort to end the run on the banks and stabilize the economy, President Franklin Roosevelt took America off the gold standard. Not only were no more gold coins to be issued for circulation, people had to turn in the ones they had.
The 1933 Double Eagles are Ordered to be Destroyed:
It became illegal for private citizens to own gold coins, unless they clearly had a collectible value. This law was enacted during desperate times to prevent the hoarding of gold currency. Since there would be no more gold currency issued in the U.S., the Mint had melted down the 1933 run of Gold Double Eagles and converted them to gold bullion bars by 1937.
Some of the Double Eagles Escaped the Melt Down:
Two of the 1933 specimens were given by the Mint to the U.S. National Numismatic Collection at the Smithsonian Institute. These were the only two legal specimens to ever become part of a coin collection; however, by 1952, the Secret Service had confiscated 8 more 1933 Double Eagles! How did they leave the Mint? Why weren't they melted down?
Was the 1933 Double Eagle Switched for Another Coin?:
We may never know for certain how these coins left the Mint, but there is a general consensus among scholars that a Mint cashier by the name of George McCann exchanged about 20 1933's doomed for destruction and replaced them with earlier dated Double Eagles. This way, the accounting books would balance and nobody would realize that anything was amiss.
What we do know for sure is that a Philadelphia area jeweler by the name of Israel Switt came into possession of at least 19 of the coins.
The Coin of a King:
Israel Switt sold at least 9 of the 1933 Double Eagles privately to collectors, one of which found its way into the collection of King Farouk of Egypt. When the Secret Service discovered that these coins had surfaced, they confiscated them all because they were considered to be stolen property of the U.S. Mint. However, King Farouk had legally exported his coin before the theft was discovered, and the Secret Service was unable to recover his specimen through diplomatic channels.
The King's Specimen is Recovered in a Sting Operation:
After King Farouk was deposed in 1952, his 1933 Double Eagle briefly appeared on the market, but when it became clear that U.S. authorities still wanted to confiscate it, it vanished again! More than 40 years later, British coin dealer Stephen Fenton showed up with it in New York, and the Secret Service finally seized it during a sting operation during which they purportedly negotiated to purchase the coin.
The 1933 Double Eagle is Nearly Destroyed by Terrorists:
Fenton fought a several year-long legal battle in the U.S. courts over ownership of the coin, during time which it was stored in the Treasury Vaults at the World Trade Center. A mere 2 months before the terrorist attacks of September 11, 2001, the lawsuit was settled and the Double Eagle was moved to Fort Knox. Fenton and the U.S. Mint had come to a compromise: the coin would be sold at auction, with the proceeds split between the Fenton and the Mint.
Legal Tender at Last - and the Most Valuable Coin in the World:
The 1933 Double Eagle sold at auction on July 30, 2002, for $6.6 million, plus the 15% buyer's fee, which brought the total cost to the buyer to $7,590,000, plus $20 to monetize the coin and compensate the Mint for the $20 it believes it lost when the coin was thought to have been stolen. The buyer chose to remain anonymous, so once again we don't know where the Farouk specimen is, or when it might suddenly show up again. One thing is for sure: the Secret Service can't confiscate it any more!
Ten More Specimens Hang in Limbo:
In September of 2004, Joan Langbord, one of Israel Switt's heirs, discovered ten more specimens of the 1933 Double Eagle amongst his effects. Apparently unaware of the legal status of these coins (or perhaps just a bit too trusting of the government) she sent all ten specimens to the U.S. Mint to have them authenticated. The Secret Service declared the coins to be seized, and now Langbord is fighting the government over ownership while the specimens languish at Fort Knox
>The settlement was particular to the coin owned by the Royal. American citizens aren't allowed to steal like foreigners...unless you join a union.<
If you're referring to the coin owned by King Farouk of Egypt that was exempt from legal sanctions, I believe. If I remember correctly it was the only coin legally transferred of the 1933 series. Wasn't it a gift to the King?
I agree, the coins should be returned to the family. However, there was some speculation (fueled by the government?) that the jeweler had an illicit relationship with the cashier or another mint employee. Over the years I've read several articles about that series.
It wasn't a gift. The US government didn't know that it even existed until it was made known that Egypt wanted to bring it to the US for auction. At first, the Feds said that it would be confiscated if it were brought into the country, but in order to maintain good relations with Egypt, they finally agreed to allow the auction in the US if they received half of the proceeds from the sale.
Speculation has no standing in court. The Feds can't prove anything.
The Farouk coin was purchased from B Max Mehl and as per the current legal requirements an export license was applied for and was granted. It was granted on the grounds that it was a coin of recognized value to collectors and legal to own under the presidential order. As such an export license could be granted. This occurred several months before the Secret service got involved and started confiscating coins.
From 1933 through 1944 the 1933 double eagles were openly bought and sold, and even advertised for sale. No one tried to hide these coins. And it was a different specimen being auctioned in 1944, not the Farouk coin, that led to the crack down by the authorities.
My opinion is that the government has far bigger problems to worry about than this old story and should let it go. Just another case of them bullying and trying to act like they are their own independent entity, instead of run, and funded by the people. Every coin ever made is the property of tax payers. The people worrying about confiscating these would be homeless, living in an alley without the coin owner's tax dollars.
Besides that, I really don't understand what the point is of raising such a big deal over a few coins. Why don't they go after the owners of the 1913 V nickels too? Why don't they put this much effort into the billions of dollars lost in Iraq!? Some things they can let go and some they can't I guess. Seems like some nobody is trying to prove their job is warranted.
At this point, I've got to agree that it's a bit much that the government goes after these. What's $80 million to the US government? They spend that much on toilet paper in a week.
Some bureaucrat at the Secret Service wants to make a point. Problem is, in typical government bureaucrat fashion, he can't see the forest through the trees. In this case, these coins, and the legend that surrounds them, have become a national treasure in and of themselves.
The irony here of course, is that I'm sure the US government will spend far more on the legal case to declare their right to confiscate the coins, than the coins will ever bring at auction.
The irony here of course, is that I'm sure the US government will spend OUR MONEY on the legal case AGAINST A CITIZEN concerning their right to confiscate OUR COINS, than the coins will ever bring at auction.
There, I fixed it for you and it's even more ironic.
The settlement was particular to the coin owned by the Royal. American citizens aren't allowed to steal like foreigners...unless you join a union.
with all due respect, let's not cast aspersions upon the entirety of union members. Most are regular people like you and me and don't deserve to be lumped in as thieves in your analogy.
A life is not important except for the impact it has on other lives. - Jackie Robinson
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Originally Posted by midas1 
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