1933 double eagle trial a 'terrible miscarriage of justice'

Published : 10/07/11
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Several months have elapsed since the jury returned its verdict in the civil forfeiture case involving the 10 1933 double eagles found in 2003 in the lockbox of Joan Langbord.

Regardless of how I sort and resort, sift and resift the evidence and events in that trial, I come back to the same conclusion: A terrible miscarriage of justice occurred in that courtroom. Although immediately directed at Joan Langbord and her two sons, all American citizens — especially those of us who are numismatists — have been violated irreparably. A faulty premise by the government underpinning its pursuit of the coins combined with, in my opinion, misapplication of the law and the misreading of the evidence by the jury, have combined to create this miscarriage of justice.

These are core or fundamental mistakes by both the judge and the jury that materially affected the outcome of the trial. These are what I call the pivot points — the points where I believe the trial changed and went awry.

I am not unaware of a series of rulings from the bench on motions and evidentiary admissibility issues. In the final analysis though, these rulings are largely peripheral and tangential to the core issues. Though, they do seem to present the image of bias in favor of the government, the appearance of which is detrimental to the objectivity and neutrality of the bench.

An envelope was opened through which the government can now pursue specific coins that the owners of those coins must now prove left the Mint in an authorized manner or those coins may be seized by the government as contraband; the proceeds of a crime under the civil forfeiture act(s). At risk are such rarities as the 1913 Liberty Head 5-cent coins, most of the 1804 silver dollars, most if not all pattern coins and likely the 1856 Flying Eagle cents to name a few. Push the envelope a bit further and literally every coin in our collections might be at risk. For, it is no longer necessary for the government to show that its has suffered harm in any way in this form of civil action nor does it need to establish with certainty that a crime has been committed.

A bit of history or background is needed here. In 1933 the U.S. Mint struck somewhere south of a half million double eagles. At the behest or order of President Franklin D. Roosevelt the coins were not to be released. Subsequently, the coins were ordered to be melted back to bullion. Presumably this was because the process was in the works for what became known as the Gold Reserve Act of 1934, whereby the United States would no longer be using gold specie domestically nor would the paper money be redeemable in gold specie. The orders to not release and to melt are the basis of the government’s claim that none of the coins were released.

Fast forward to the 1940s and a number of 1933 double eagles are seized as contraband allegedly stolen from the Mint. The government’s claim seems to be that: If the coins exist outside the Mint, then the coins are stolen! Interesting, because for this argument to be valid the relationship between the antecedent and consequent has to be absolute or tautologous, which we will soon see is not the case. Of course you cannot get away from the now conditional limitation on the relationship between antecedent and consequent by reversing the two because you fall into the trap of the fallacy of confirming the consequent.

The government painted itself into a corner from which it escaped only by judicial error compounded by a jury that overlooked or, worse yet, ignored this conundrum the government was in: the government’s fundamental premise is compromised.

Fast forward again to the 1990s and a government sting, whereby another 1933 double eagle was seized from a British dealer who was in New York for the purpose of selling the coin to an American. Although legal action was commenced, the matter was ultimately negotiated to a conclusion with the coin going to auction and realizing $7.59 million.

Two important things emerged from this episode with the 1933 double eagles. The government’s position that none of the coins ever left the Mint lawfully was utterly destroyed by the defendant presenting the export permit issued in 1944. This leaves the government in the position, by its actions in 1944, of consciously acknowledging, whether by mistake as claimed today or otherwise, the lawful status of 1933 double eagles outside the Mint and in the possession of Israel Switt. Furthermore this would act to inhibit or bar the government from any future seizures. This is why the government’s basic argument to the court has been compromised irreparably and why the burden of proof shifts to the government to prove that any particular or specific coin left the Mint unlawfully prior to the issuance of the export permit. This is something the government cannot do.

Secondly, the value issue entered the proceedings in the high dollar end. However, this case has been since the beginning about $200 and not a penny more. This is the value of the coins when they left the Mint and the value when Israel “Izzy” Switt received them. This is the maximum value the government can try to claim by which it has been damaged or harmed through the alleged theft. This is the amount the Mint’s books would be out of balance if they had been stolen. This is the amount that Generally Accepted Accounting Principles as formulated by the Financial Accounting Standards Board would require in an audit, as would Internal Revenue Service regulations which would dictate the lower of cost or market. This is something it has yet to do, prove or show harm in any amount. In order for these coins to carry a higher value they must transact through an arm’s length transaction with value tendered for value received. Somehow, it seems this case should have been heard in a small claims court.

Fast forward to 2004 when the Langbord family forwarded to the Mint 10 1933 double eagles found in a safe deposit box inherited from Izzy Switt. These coins were sent for authentication purposes only. However, after authentication the coins were seized as contraband by the Mint using the now discredited theory that the coins must be stolen because they exist outside the Mint.

Legal filings followed, motions and counter motions abound and by 2010 the court ruled in favor of the Langbords on constitutional grounds that the coins were seized in violation of the Langbord’s rights to due process. But, rather than return the coins to the Langbord family the judge, in my opinion, erred again by specifically referring to the government’s failure to have sought the coins through civil forfeiture. By wording his ruling he informs one party, the government, what it did not do and in so doing tells it what it should do. This gives the appearance of bordering on advocacy for one party at the expense of the other. In effect, he gives the government another chance by leaving the coins with the government while it files for civil forfeiture.

Accordingly, the government takes the hint and files for civil forfeiture, and the case moves to trial. To his credit the judge advised the jury of the unique nature of this trial, specifically that the alleged crime occurred 78 years ago and that due to the death of all the parties involved in the original events surrounding the alleged crime there would be no direct testimony from anybody who had firsthand knowledge of those events. The only direct evidence would be from Mint and government records from the period.

The government and the Langbords hired experts to comb through the records and extract any and all relevant information. Overlooking the efforts really by both sides to challenge the credibility of the expert witnesses, the records revealed valuable information that was introduced into evidence by the government. Specifically, the Mint records were deemed by the government’s experts to be reliable, accurate and complete, that all 1933 double eagles are accounted for and can be traced from Mint to melt, that the records show no leakage or any unauthorized releases of the coins in question. Further, the Mint’s bullion and coinage accounts are in balance. Interestingly, by seizure the Mint’s bullion account is now out of balance by 9.8 troy ounces of gold.

The only direct evidence, the Mint records, clearly state that the accounts are in balance and that the Mint is not missing anything, not as much as a dime much less $200 face value in gold coin. The only logical and rational conclusion anybody can draw from that information is this: By whatever means the coins in question left the Mint, they left by other than unauthorized means or leakage!

At this point in the trial I believe the judge erred again by not granting the defense motion for dismissal. The government cannot show a crime has been committed by direct evidence nor can it show it was harmed in any manner by Joan Langbord’s possession of the coins. The former is necessary as a foundation to the civil forfeiture act and the latter is necessary for the government to have standing in civil court seeking relief.

But, the judge gave the government another shot at the end zone with a “Hail Mary” by letting it infer a crime through the actions of the late Israel Switt. A crime they cannot show by direct evidence. In my opinion the crime must stand independent of the alleged perpetrator. In my opinion you cannot “convict” or adjudicate Izzy Switt of theft on a civil docket under civil rules of evidence any more than you can adjudicate a tort for damages on the criminal docket under criminal rules of evidence.

In the final analysis, Israel Switt lies today in his grave innocent of any and all alleged crimes surrounding the events of 1933 at the Mint. He was never indicted, charged, tried or convicted beyond a reasonable doubt in a criminal court. Accordingly, it is through Israel Switt’s innocent hands, which were acknowledged as such by the 1944 export permit, the coins passed through probate to Joan Langbord, his daughter, thereby making her a holder in due course. ■

GEORGE CORELL is a lifelong numismatist specializing and published in Confederate coinage issues. He is a semi-retired quality control and supply chain analyst in the aerospace industry, a nationally certified arbitrator of 20-plus years, and studied finance and business economics at the University of Windsor, Ontario.

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