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Government Is Sued Over Seizure of Liberty Dollars

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Mammon

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http://www.nysun.com/national/government-i...-dollars/80368/

Mr. Von NotHaus markets his coins via the Internet as an inflation-proof currency and claims that between 100,000 and 250,000 Americans own them. They have attracted the interest of coin enthusiasts, as well as critics of the Federal Reserve.

A 1999 report by the Southern Poverty Law Center said that many of the stores that accepted liberty dollars "are run by men and women connected to the radical right." The coins have caught on particularly well in Asheville, N.C., and Austin, Texas, and are accepted by some merchants there.

More than 50,000 of the coins seized last year bear the likeness of Rep. Ron Paul, whose monetary policies Mr. Von NotHaus supports.

"About a quarter of a million people holding liberty dollars are almost up-in arms — not up in arms yet, but almost — about having their property seized, and rightly so," Mr. Von NotHaus told The New York Sun yesterday.

I hate when libertarian people do this kind of stuff. It's like, smoking weed in front of a cop and then complaining that your rights are being violated when they arrest you. True, you should be able to smoke weed, however, at the moment it's illegal. Just like it's illegal to print your own currency. I don't think it should be, but that's the law.

I wouldn't use currency with Ron Paul on it anyways.

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I am interested in where this case goes.

I have posted a few more excerpts from the article. The emphasis is mine.

The Justice Department had decided that the coins, many of which bear the familiar symbol of Lady Liberty and the phrase "TRUST IN GOD," were being illegally marketed as government-sanctioned currency, according to the sworn affidavit of an FBI agent.

I wonder if the part that I italicized is true. If so, it makes a difference between fraud and circulating coins.

The coins "do not constitute contraband or other property subject to seizure," the legal papers state, adding that the seizures violated the Fourth Amendment rights of the plaintiffs.

If no fraud was actually committed, this sounds like a decent defense. Does anybody know why this could fail?

Mr. Von NotHaus markets his coins via the Internet as an inflation-proof currency

Is it really inflation-proof if Mr. Von NotHaus can continue to mint more of them? ;)

More than 50,000 of the coins seized last year bear the likeness of Rep. Ron Paul

As much as I support objective currency, I would not want to use any medium of exchange that suggests that Ron Paul, a man whose defining political issue seems to be non-interventionism, is worthy of commemoration.

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If no fraud was actually committed, this sounds like a decent defense. Does anybody know why this could fail?
18 USC 486 states:

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.

So the problem would be the intent to use as money to be passed from person to person. This is an interesting case where the law is contained in a section related to counterfeiting, but the wording is being applied to literally a case that probably cannot be construed as actual counterfeiting.

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So the problem would be the intent to use as money to be passed from person to person.

How about banknotes, or designs that look like banknotes? Specifically what about Disney Dollars, which are used as currency within Diney's parks? What about coupons reedemable for spcific merchandise, or for a certain amount of cash, for any chain of stores, specialty stores, restaurants or hotels? How about subway tokens, or arcade tokens? How about stock certificates?

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IIRC it's okay to put something like "$1 in Trade" on a token or piece of paper, but you cannot simply put a dollar or cent denomination on there. It's probably even worse to put "United States Of America" and a dollar (or cent) denomination on it. That makes it look too much like government-sanctioned money.

Ironically if it is "counterfeit" it's actually better than the genuine item; an ounce of silver is over 16 bucks right now. The only other case I know of where a counterfeit was better than the original was platinum used to adulterate gold coinage--even then, though, the platinum was priced less than gold was at the time. (This was done by mint workers on their own, so they could steal gold from the mint, and later by the Spanish government, using platinum from what is now Columbia.)

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According to the FBI warrant, the justice department told the Liberty dollar folk that they're doing something illegal, citing the clause that David quoted above. However, this was the opinion of government prosecutors and not of a court.

The Liberty Dollar guys filed a civil lawsuit in the Federal Court in the District of Indiana. They sought an injunction against the U.S. government making statements that Liberty dollars violated Federal law. They argue that they never represented their dollars as being U.S or foreign "current money" in the sense that is meant by the law. They read the law as saying that one cannot counterfeit, nor can one make a coin of "original design" -- e.g. similar but not same as U.S. currency -- to pass if off as valid U.S. or foreign currency.

I'm not sure how a judge would decide, but from what I have seen, Liberty Dollar's marketing was very above board on this aspect. Far from trying to confuse their dollar with current money, their customers probably bought these for exactly the opposite reason -- because they explicitly thought these were different from current money. I sometimes see advertisements on TV that sell "collectors edition" dollars to people, and only the fine print indicates that the $5 coin is actually a Liberian $5! I assume these ads have been vetted by lawyers; but, Liberty's advertising was never that subtle -- it was purposely blatant about their currency being better than US dollars.

The liberty dollar was never a good purchase on a purely economic basis, the only "reasonable" reason to have bought it was to make a political statement. As for the Ron Paul link -- no surprise. To me, it appears that the FBI is going after these guys for political reasons. The government does not like this particular form of political protest.

Even though the liberty dollar was never a good deal, I had previously suspected that it might be far worse than that. I had suspected that some actual fraud might be involved -- like keeping even less reserves than they say. (The "counter-party risk" is huge.) In the FBI warrant, I was expecting to see some such facts; but, there were none.

At least from the lay-reporting, I think the initial comparison with smoking pot is flawed. A better analogy would be where someone challenges a law that is not so clear-cut: e.g. where someone opens a pot shop under state law even though the Feds opine that it violates their law, but no test-case has yet been decided.

In summary, while these guys are not ideological fellow-travelers -- and might even be the opposite (in my mind, I classify them with various other "loonie" elements) -- I wish them well on this particular court-case.

As a side-light, reading the FBI's warrant, it was interesting to see how they stressed that the Liberty dollar folk were using their cars and house as part of their business. They seemed to stress that the cars and house were used in commission of the alleged "crime". I wonder if there is some law -- probably originally intended for drug-dealers, and then extended -- that could let them threaten to grab these people's house/car.

Edited by softwareNerd
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http://www.nysun.com/national/government-i...-dollars/80368/

I hate when libertarian people do this kind of stuff. It's like, smoking weed in front of a cop and then complaining that your rights are being violated when they arrest you. True, you should be able to smoke weed, however, at the moment it's illegal. Just like it's illegal to print your own currency. I don't think it should be, but that's the law.

I wouldn't use currency with Ron Paul on it anyways.

I hate when Objectivists (or anyone for that matter) complain about this kind of stuff. Your anger, judgment, contempt, or whatever should rightly be channeled at those who pass laws limiting people's rights. The victims are not criminals and don't deserve any condemnation.

You have already stated that you don't think whatever law they broke should be a law so your main objection would be to their methods I assume. These people actually challenged our over-bearing government (they also incidentally raised awareness via the media). This would have been a prime opportunity for you to highlight a law that should be changed, focusing on a principle. Instead you complain about the method. It seems like it's more productive to identify problems with laws than dumping on libertarians.

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It seems like it's more productive to identify problems with laws than dumping on libertarians.
In this case, it is actually more productive to be dumping on Ron Paul and his like. Paul is an example of a particularly psychotic breed of libertarian, the kind that wears foil-covered helmets to protect against alien mind control rays. His problem is a complete inability to distinguish "the actual law" from "how I'd like things to be". So those guys claim "The Liberty Dollar never has claimed to be, does not claim to be, is not, and does not purport to be, a coin." Well that is just plain nonsense. It is plainly obvious that it is a coin, it looks like a coin, it is deliberately designed to look like a coin, and even strongly resembles US coins. It says on it "Liberty Dollar", not "Liberty Zlotchek", and has a clear face value (one which is higher than the actual market value of the metal by about 25%, which is rather fraudulent in my opinion). It's a friggin' coin. They violated the law, but rather than honestly saying "Of course we did, it's an improper law that should be repealed", they are pretending that what they are doing is all perfectly legal. This is remniscent of Paul's lies about there not being a law requiring people to file tax returns (there plainly is). I would applaud a person who boldly challenged the law against competing with the US fiat money, but I condemn these lying evaders who claim that what they are doing is "actually legal".
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As a side-light, reading the FBI's warrant, it was interesting to see how they stressed that the Liberty dollar folk were using their cars and house as part of their business. They seemed to stress that the cars and house were used in commission of the alleged "crime". I wonder if there is some law -- probably originally intended for drug-dealers, and then extended -- that could let them threaten to grab these people's house/car.

There is in RICO. Allows the government seize all assets used in the commission of a crime. Usually they auction the seized property. There's been a lot of complaining about the breadth of the seizure law - very few people seem to like it much. If I get a second tomorrow, I'll post the title and section number, and dig up a few articles on it.

Incidentally, my uncle, who works for Intel and invented the Pentium processor, bought his house at a government auction selling off property seized from one of the West Coast's biggest drug czars back, oh, about 7 years ago. Got a deal on it. Nice, wooded, Oregon mountain country.

~Q

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