"Illegal" coin deal involving the world's most valuable coin?

I was just reading this month's issue of Nat Geo and in an article about illegal wildlife trading was a vague reference to an "illegal" coin deal between the US government and a British coin dealer. The coin in question was considered "stolen" property but, the deal was completed and the future profits were split between the US gov. and the Brithish coin dealer.

I had never heard of this case and was wondering if there was any truth to the reference.

Has anyone else heard of this case?

 

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I think you are talking about one of the 1933 double eagles and British dealer Stephen Fenton. The case was settled in 2001 and the coin sold in a Sotheby's auction. Proceeds split between him and the U.S. government.

 

That would be a 1933 St. Gauden's double eagle; all but a few were recalled by the government and melted down, while two were saved (now on display in the Smithsonian) and perhaps dozens more were taken illegally.

The case you are referring to came when it was discovered that the British coin dealer you mentioned was in possession of one of these de-monetized coins. There was quite the ruckus over it, and unless I am mistaken, I believe the end result was that the particular coin the dealer had was re-monetized, making it legal to own/sell again. When it was sold, the dealer and the US gov't did indeed split the profit.

There's more to it, but this is just a quick recap before I head out the door.

 

Ahh yes...you are correct. It was one from Izzy Switt's 1933 $20 hoard.

 

Was it not a hoard coin?

 

Side note on it. It sold for 6.6 million plus 15% buyers fee and lastly $20 to officially monetize it. U.S. government got half plus the $20. Just kind of seems odd, after approx. 3.3 million they needed that extra $20. :goof:

 

And if you would like to watch the auction and monetizing ceremony of the '33 double eagle, here you go:

http://www.youtube.com/watch?v=IkX_iSRWsG8&feature=channel

Also be sure to watch part 2...

both videos were posted by Eagle Eye Rick Snow on youtube

 

For sure, Thats one valueable coin!!

 

I find it ironic that at the time it was being bid on it was technically not a coin, but it was being auctioned as a coin. I guess it should have been a medal before and a coin after? It must be nice in life to be rich enough to throw enough money at a world government to have them turn a medal into a coin just for you

 

No, this wasn't from Switt, but this is known as the King Farouk specimen. There was a special monetizing of the coin, when it sold...the buyer had to pay full bid, BO, plus the $20. The U.S. Gov't and Fenton split the priceeds. Took quite a bit of legal wrangling for this case to be resolved, as this specimen left the U.S., winding up with Egypt's King Farouk, who was a big collector.... then it bounced around Europe, in the black market, after he was deposed. Fenton, and another dealer (Ron Gillio) got busted trying to sell it to Secret Service agents. Here it is in a nutshell:

http://www.cbsnews.com/stories/2002/07/31/national/main516986.shtml

 

Actually it almost certainly did pass through Swift's hands. All of the 1933 Saints which escaped the mint are thought to have originated with him. Also, to my knowledge, the other dealer besides Fenton was Jay Parino, not Ron Gillio.

Edited to add - you should edit/correct your reference to Mr. Gillio.

 

It's really too bad that this double eagle is about to go down in value considerably. If the Langbord family gets a favorable ruling on the ten 1933 Saint-Gaudens double eagles formerly in their possession (whick I think they will), this will change the rarity of the Fenton 1933 Saint forever.

 

I agree with you, but that is an assumed risk that the buyer took. And whoever can afford the coin, can afford the decrease in value.

 

I have to whole-heartedly agree with you. If the coin would decrease in value to say $1.5 million, I would have no sympathy for the guy who decided to drop $7.59 million on one coin.

 

In fairness to the buyer of the $7.5 million 1933 double eagle, I'm pretty sure the buyer was assured by the U.S. Government that it would be the only 1933 double eagle to ever be monetized and the only one ever to be legal to own by a collector... so if the courts rule otherwise, it seems that the owner of the $7.5 million example may have a claim against the U.S. government for the decline in value if such a promise was made and then broken.

 

I agree. And I predict that if there is a settlement between the Langbord family and the government, it will include compensation to the buyer of the Fenton coin.

 

Taking this in different direction...

I have looked through numerous mint reports / fed. reserve dispersal documents and for the most part they were accurate and thorough.

Did the mint or fed also keep accurate inventory on the quantity and denominations turned in the by the public?

 

I have heard about reports of the gold turned in by the public but have no idea how accurate they were.

 

From what I understand, whether it was gold or silver, it was weighed and melted. I doubt there was any records of what years or mintmarks were collected. At best, they may know a rough number of how many of each denomination were collected.

 

Just a clarification on this topic. Although Double Eagles were released for circulation until '32, the '33's were never released (never monetized back then.) They were not released due to the new legislation of making gold illegal.

The general consensus of how some came into private hands (illegally) is that a mint cashier exchanged some earlier dates for about 20 1933's. These went through dealer Israel Switt to various collectors, but many were confiscated by the Secret Service as being stolen US Government property.