July 8, 2011 / 12:49 AM / 8 years ago

Legal battle begins over disputed gold coins

PHILADELPHIA (Reuters Life!) - A legal battle over the fate of 10 double eagle gold coins from the Franklin Roosevelt Administration in the 1930s started with the government saying the coins, now worth an estimated $75 million, were wrongly taken from a U.S. mint.

A double eagle coin that was put up for auction by Sotheby's and Stack's auction house is seen in a 2002 handout photo. REUTERS/Handout

Authorities say the coins were improperly removed more than 70 years ago from the U.S. Mint at Philadelphia, only blocks from the courthouse where U.S. District Court Judge Legrome D. Davis was presiding over the case.

“You are going to hear a remarkable and intriguing story about gold coins that were stolen from the U.S. Mint in 1933,” Assistant U.S. Attorney Jacqueline Romero told the jury in her opening statement.

None of the 445,500 coins, then worth $20 each, ever legally went into circulation, she said. President Franklin Roosevelt issued an executive order shortly after taking office in March 1933 that prohibited the payout of gold from banks.

Yet 10 coins — called double eagles because the $10 coin was called an eagle — somehow disappeared.

“The only answer is that they were stolen,” Romero said. She pointed a finger at the late Israel Switt, saying the now deceased Philadelphia jeweler was “somehow involved.”

His heirs — his daughter Joan Langbord and her sons Roy and David — are contesting the government position that it is entitled to the coins.

In fact, the government has had possession of the disputed coins since 2004, when Roy Langbord surrendered them to the government.

The government says it can keep the coins because of a federal provision allowing it to grab property that is “traceable to any offense constituting specified unlawful activity.”

“We will ask you to find that these 10 1933 double eagles are assets that belong to the United States,” Romero said.

But the Langbord family says the coins are their rightful property and they want them back. Their attorney, Barry Berke, told the jury the government cannot seize property unless it can prove it was obtained illegally.

“They don’t have evidence, they don’t have facts, to prove what they have to prove,” he said.

The Langbord family alerted authorities after finding the coins in a safe-deposit box in 2003, wrapped in a bag from Philadelphia’s Wannamaker’s department store, which is no longer in business.

“The government only knew about it because our client told them,” he said.

Berke accused the U.S. Attorney’s office of “essentially trying to rewrite history,” by claiming that bookkeeping and procedures in 1933 were tight and accurate.

In fact, he said, nobody at this time knows how the coins left the mint, when they were taken or who may have been responsible.

“We have evidence of hundreds and hundreds and hundreds of gold coins leaving the mint after March 6,” he said, referring to the date of Roosevelt’s proclamation on gold.

He said the cashier at the mint, for instance, kept a bag full of the gold coins at his desk, and an assistant U.S. Treasury secretary told the mint it could continue the practice of exchanging gold from citizens for gold from the mint.

Editing by Barbara Goldberg and Cynthia Johnston

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