Family must forfeit rare 'double eagle' coins
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In a case with international scope and intrigue stretching back to the first year of Franklin D. Roosevelt's administration, a federal judge ruled that it is the government's right to seize 10 exceedingly rare and likely ill-gotten coins from the collector's heirs.
The gold "double eagle" coins, none of which were ever circulated, were stolen from the Philadelphia Mint sometime shortly after they were cast in 1933, so they were rightly forfeited to the government 70 years later, a jury found last year.
And now, U.S. District Judge Legrome D. Davis of the Eastern District of Pennsylvania has agreed with the jury findings.
The descendants of the man to whom the Secret Service has traced the only other untethered "double eagle" coins -- there have only been a few, one of which fetched $7.6 million at an auction in 2002 -- argued that they should be able to keep the 10 coins that had been in their safety deposit box because the Civil Asset Forfeiture Reform Act wasn't properly applied in the jury's verdict.
Ten such coins, if they fetch what was paid a decade ago, would be worth $76 million, or more.
Among their arguments, the family claimed that the government hadn't provided enough evidence of the late Israel Switt's criminal intent when he got the coins. Switt had been a coin dealer and owner of an antique store, which his family still runs.
"Not surprisingly, the jury in this case heard no testimony from anyone who was actually present at the mint when the '33 Double Eagles first disappeared so many years ago -- all the primary actors who might have told that tale have passed away," Judge Davis wrote.
"But that certainly does not doom the government's case because 'explicit evidence is not required to support a finding of specific intent' ... Indeed, 'a jury may draw inferences of subjective intent from evidence of the defendant's objective acts, and from circumstantial evidence,'" the judge said, citing the U.S. Court of Appeals for the Third Circuit's recent opinion in United States v. Piekarsky.
The meticulous records kept at the Philadelphia Mint -- the only one to produce the coins in 1933 -- show that nearly all of the 445,000 that were produced were melted down into gold bars following the Gold Reserve Act of 1934 and none was entered into circulation, according to the opinion.
"The jury saw no record of a legitimate '33 Double Eagle release, and from this lack of documentation one may reasonably infer that the responsible party appropriated the coins in secret, knowing full well the wrongfulness and illegality of his actions," Judge Davis said.
He also noted that Switt, who was interviewed by the Secret Service in the 1940s because two coins found on the market had been traced to him at that point, denied getting the coins from the mint, but decades later told a friend that he had double eagle coins he had gotten from the Federal Reserve and was looking to sell to an international buyer. The only double eagle coin produced in 1933 that has achieved legitimacy on the market -- aside from the two that were originally provided to the Smithsonian -- can also be traced to Switt, according to the opinion.
In 1944, Egyptian King Farouk bought a coin from a Texas dealer for $1,575 and got an export license for it two weeks before the Secret Service began its investigation. In 1995, an English collector named Stephen Fenton bought the coin for $20,000 and took it to the United States to sell, where it was seized by the Secret Service and led to "protracted litigation," according to the opinion.
"In the end, the government, realizing that it had improvidently issued an export license for the Farouk coin many years prior, settled the case. Fenton and the government agreed to sell the coin at auction and split the proceeds evenly," Judge Davis said. The sale set the record for the highest price paid for a coin at auction, selling for $7.6 million in 2002.
Roy Langbord, Switt's grandson, saw a newspaper article about the coin -- the article mentioned his grandfather and was published before the auction. He asked his mother, Joan Langbord, if the family had any more of them.
The day before the Fenton auction, Joan Langbord, Switt's daughter, visited the safety deposit box where the 10 coins were kept. She revealed them to the government about a year later, according to the opinion.
"The jury heard more than sufficient evidence, albeit primarily circumstantial, that the disputed '33 Double Eagles were taken from the mint and squirreled away by Switt and the Langbords."
First Published September 10, 2012 12:00 am