A former Philadelphia Mint police officer pleaded guilty Sept. 8 in federal court in New Jersey to stealing error Presidential dollars from the facility and selling them to a coin distributor in California for approximately $2.4 million.
The stolen coins were Presidential dollars missing their edge inscription.
The former Mint police officer, William Gray, 64, from North Wildwood, N.J., pleaded guilty before U.S. District Court Judge Noel L. Hillman in Camden to one count each of theft of government property and tax evasion. The tax evasion charge stems from Gray’s failure to pay taxes on the coin sales.
Gray remains free on $50,000 bond pending sentencing on Dec. 20. Gray faces up to 10 years in prison and a fine of up to $250,000 on the theft charge. The tax evasion charge carries a maximum penalty of five years in prison and up to $250,000 in fines.
According to Rebekah Carmichael from the Office of Public Affairs for the United States Attorney in New Jersey, Gray also entered guilty pleas on single mail fraud and money laundering charges included in court information filed Sept. 8.
Carmichael said it will be up to the judge at the time of sentencing Dec. 20 whether to accept the guilty pleas for the mail fraud and money laundering charges as has already been done with the theft and tax evasion counts.
Carmichael said Sept. 9 that federal authorities have not publicly identified the coin dealer in California to whom Gray was selling the stolen coins. She also would not confirm nor deny whether federal authorities have a separate investigation targeting the unidentified coin dealer.
The information containing the charges against Gray was the result of a coordinated investigation involving the U.S. Internal Revenue Service, Treasury Office of Inspector General, U.S. Postal Service and U.S. Mint police.
Tom Jurkowsky, director of the U.S. Mint’s Office of Public Affairs, told Coin World Sept. 9 that the U.S. Mint and Treasury Department’s Office of Inspector General initiated investigations to examine how the thefts occurred and to implement measures to ensure they do not happen again.
Jurkowsky said the U.S. Mint was already conducting a system-wide protection evaluation at all Mint facilities before investigations were initiated involving Gray.
Paul J. Fishman, U.S. attorney for the District of New Jersey, said that the U.S. Mint has advised that it has implemented measures to improve security in all of its facilities.
Gray admits thefts
Gray worked as a Philadelphia Mint police officer from June 1996 through January 2011.
He admitted before Judge Hillman that the thefts began in 2007, the year the Presidential $1 Coin Program was introduced. Gray admitted in court that he removed coins missing the edge lettering from the coining area and placed them into small bags that he then removed from the Philadelphia Mint. Gray admitted taking coins missing the edge lettering because he knew they would be more valuable to collectors. He was initially paid $20 per coin, and eventually between $70 and $75 per coin.
The error coins were then shipped for sale to the coin distributor in California from the U.S. Post Office in Rio Grande, N.J., and from the Federal Express facility in Egg Harbor Township, N.J., Gray admitted. Gray also admitted that between 2007 and 2009, he failed to report the sales of the stolen error coins on his income tax return. Gray admitted understating his tax liability by $801,651.
The information filed against Gray states he must forfeit property that is traceable to having been associated with the sale of the stolen error coins. The property to be forfeited includes $2.3 million in cash, two row houses in Philadelphia, five motor vehicles, a boat and boat motor.
At the time the Presidential $1 Coin Program was launched, the incuse edge lettering — comprising IN GOD WE TRUST, E PLURIBUS UNUM, the date and Mint mark — was imparted on separate edge-lettering equipment in a room removed from the coin production floor.
Not long after the first 2007 George Washington Presidential dollars were released into circulation in February 2007, collectors, dealers and the general public began reporting numerous edge errors. United States Mint officials acknowledged that tens of thousands of Washington Presidential dollars had been mistakenly moved from the coining presses to the counting and bagging equipment without first being taken to the edge inscription equipment at the Philadelphia Mint. From there, the coins were shipped to Federal Reserve Banks for release into circulation.
Thousands of the Washington, Plain Edge dollars entered the marketplace through normal circulation channels, where they were found by the public. The coins quickly began selling for large premiums over their face value.
The release of the error Washington Presidential dollars and the prices they were bringing were the subjects of news coverage not only in the numismatic press, but also in the mainstream media, prompting widespread searches for the error coins.
Mint takes steps
To reduce the possibility that similar error Presidential dollars could be produced and released into circulation, Mint officials took interim steps to identify bins of coins that had been struck but not yet given their edge inscriptions. The number of similar errors for subsequent 2007 Presidential dollars decreased considerably, though some were produced and released.
By early 2008, the edge lettering operation was integrated as the final step in the production process on the coin production floor.
The motto IN GOD WE TRUST was moved from the edge to the obverse in 2009 following complaints in 2007 and 2008 about the production of “Godless dollars” — the Presidential dollars without the edge inscriptions. Congress in 2008 ordered the motto moved from the edge to the obverse or reverse; the Mint implemented the change on the 2009 Presidential dollars.
The space for IN GOD WE TRUST replaced on the edge with 13 five-pointed stars. ■