Liberty Dollars held by collectors may be subject to seizure as
contraband by federal law enforcement, officials with the U.S.
Attorney’s Office and Secret Service said Aug. 24.
Statements by officials for those two federal law enforcement
agencies seem to reverse the position taken in comments released from
the United States Attorney’s Office in Charlotte, N.C., and published
in Coin World in April, that mere possession of Liberty
Dollars did not constitute a violation of any federal statute.
That position has apparently changed, although officials of the U.S.
Secret Service — which would be the federal agency likely charged with
executing any possible seizures — would not provide any definitive
comments concerning under what circumstances Liberty Dollars would be seized.
The revised stance is tied to the Liberty Dollar being determined
in a federal court to violate federal counterfeiting statutes. Liberty
Dollars, metallic medallic pieces, were privately promoted as a form
of currency that could be used in commerce as an alternative to
Federal Reserve notes.
U.S. Attorney’s Office
Jill Rose, chief of the criminal division for the U.S. Attorney’s
Office in Charlotte, N.C., told Coin World Aug. 24 that the
Liberty Dollar medallions are confiscable as contraband regardless if
they are being exhibited for educational purposes only.
Rose served as lead prosecutor in the Bernard von NotHaus case.
Von NotHaus, creator of the Liberty Dollars, was convicted in federal
court in March on multiple charges involving the alternative
Rose said because von NotHaus’ conviction included
violations of Sections 485 and 486 of Title 18 of the United States
Code, the Liberty Dollar medallions were determined to be
counterfeits, contraband and subject to seizure.
The Liberty Dollar represented “a pyramid scheme imbedded with
fraud” that had nothing to do with barter or trade, according to Rose.
“Barter is an equal and knowing exchange,” which the Liberty
Dollar was proven in court not to be, Rose said.
U.S. Secret Service
Also on Aug. 24, in addition to speaking with Rose, Coin
World talked separately with Glen Kessler, assistant special
agent in charge in North Carolina for the U.S. Secret Service.
Kessler could not provide a blanket position the Secret Service
would take toward those owning Liberty Dollars, whether one piece or
He said if a Secret Service agent witnessed something considered
to be contraband, such as Liberty Dollars, they would be duty-bound to
Kessler subsequently conferred with his Secret Service superiors
as to the agency’s specific position on the Liberty Dollar and
Kessler informed Coin World the morning of Aug. 25 that
because the publication has a worldwide audience, he had to defer
additional comments to the U.S. Secret Service Office of Public
George Ogilvie, the public affairs officer for the
U.S. Secret Service in Washington, D.C., said Aug. 25 the bureau had
no comment on Liberty Dollars and indicated that Coin World
would have to call back in a few weeks.
Asked what would be different in a few weeks as to under what
circumstances seizure of Liberty Dollars would be enforced, Ogilvie
responded, “We don’t have anything to say.”
Soon after von NotHaus’ March 18 conviction, Coin World
obtained and published comments from the U.S. Attorney’s Office in
Charlotte stating that while mere possession of Liberty Dollar
medallions was not a violation of federal statutes, actual use or
intent to use them in the manner for which von NotHaus was convicted
would be considered a violation.
Millions of Liberty Dollars in copper, silver and gold versions
are in the hands of collectors and supporters of the Liberty Dollar
medallions who have been concerned the medallions could be confiscated
by federal authorities.
And that possibility is now apparently real.
Exhibit banned by ANA
The reversal of opinion surfaced after a Michigan collector sought
to display his award-winning Liberty Dollar exhibit at the American
Numismatic Association World’s Fair of Money in Rosemont, Ill. Aug. 16
to 20. ANA officials denied the collector the opportunity amid fears
the exhibit’s contents would be seized off the convention bourse floor
by federal authorities. The collector had exhibited the collection in
various venues previously.
The collector, James Zylstra, had originally hoped his 11th time
since 2009 in setting up the competitive numismatic exhibit of
medallions would be during the ANA World’s Fair of Money in Rosemont.
Leading up to the convention, as late as immediately prior to the Aug.
16 official opening, ANA exhibit judges and ANA legal counsel A.
Ronald Sirna Jr. sought a written declaration from the Department of
Justice that Liberty Dollars could be exhibited for educational
purposes without fear of confiscation. No such declaration was forthcoming.
ANA officials also spoke with officials of the United States Mint.
The U.S. Mint’s legal counsel, Daniel P. Shaver, referred ANA
officials to the U.S. Secret Service.
As a result of not receiving a written declaration on federal
agency letterhead permitting their display, ANA officials denied
Zylstra the opportunity to exhibit the Liberty Dollars at the ANA
convention over concerns the medallic contents of the exhibit could be seized.
Zylstra told Coin World he was disappointed by the ANA’s
decision. Although Zylstra said he is concerned with what action
federal officials might take involving his collection of Liberty
Dollars, he said he is planning to display his award-winning exhibit
of Liberty Dollars at the fall Michigan State Numismatic Society
Convention in November in Dearborn where he has exhibited before and
won recognition for the Liberty Dollars exhibit.
But Zylstra may need the same written declaration as the ANA
sought before he can exhibit the Liberty Dollars there, as Sirna is
also legal counsel for MSNS.
Sirna could not be reached Aug. 25 for additional comment.
CSNS convention exhibit
Zylstra last mounted his exhibit of Liberty Dollar medallions,
paper warehouse receipts and promotional materials in April 2011
during the Central States Numismatic Society Convention in Rosemont,
Ill., at the same Donald Stephens Convention Center where the ANA
World’s Fair of Money was just held.
The 2011 CSNS convention was held a month after von NotHaus’
conviction and the determination of the Liberty Dollar’s status.
Contacted Aug. 25 by Coin World concerning the issues of
displaying Liberty Dollars, CSNS legal counsel Steven Bieda said he
would bring both the subject of permitting exhibits of Liberty Dollars
and also of permitting dealers to sell the pieces on the CSNS
convention bourse floor before CSNS officials for review and
recommendations, including a review of exhibit bylaws to protect the
organizations, as both issues will be recurring topics.
“I am not the exhibits chair, nor have I been asked for an opinion
on displaying ‘liberty dollars’ from our exhibits chair,” said Bieda,
who studied and enjoyed Zylstra’s exhibit at the CSNS convention.
“However, if I were asked, I would not have any problem allowing such
an exhibit, especially as one of the stated goals of the exhibits is
to foster numismatic knowledge and education.”
Bieda said he has not seen any indication from federal authorities
that they plan a concerted move to confiscate privately held Liberty Dollars.
“I note that the pieces are being sold and traded on on-line
auction sites such as eBay, and have personally seen these pieces sold
at local coin shows and coin shops, all without any apparent legal
consequence,” Bieda said. “Thus, it would be my recommendation that
should an exhibitor want to place an exhibit involving these pieces,
and assuming that all the other relevant exhibitor criteria is
satisfied, that they be allowed to do so.
“In any event, the hosting numismatic association would not be
responsible should the federal government or any other legal authority
take legal action or move to confiscate that or any other exhibit.
That risk is entirely on the exhibitor.”
Zylstra earned a third-place award in the medals category for his
Liberty Dollar exhibit at the 2011 CSNS convention. Zylstra has also
won awards for the exhibit displayed at a Florida United Numismatists
convention, and earned a first place when the exhibit was placed on
display in Fort Worth, Texas, in March 2010 during the ANA National
As Bieda noted, Liberty Dollars are actively traded in the
Coin World has not been able to determine whether ANA
officials or officials at other conventions and shows would ban the
sale of Liberty Dollars on the bourse floor.
As of Aug. 25, no movement by federal officials has been seen
toward the confiscation of Liberty Dollars offered for sale online,
including through auction sites such as eBay.
Liberty Dollar introduction
Zylstra first learned of Liberty Dollars in November 2008 when a
business card was placed on the windshield of his car in a shopping
center parking lot while he was wintering in Clearwater, Fla.
Zylstra said he was intrigued by the premise of Liberty Dollars,
but wanted to create a balanced exhibit offering different points of view.
Zylstra’s “Bonafide or Bogus?” exhibit comprises approximately 20
Liberty Dollar medallions in copper, silver and gold versions in
different diameters, weights and face values, as representative
examples, although many more multiple designs and varieties were
produced than are represented in the exhibit.
Also included in the exhibit were full-color paper warehouse
receipts that were backed by precious metals, along with Liberty
Dollar promotional materials and historical information.
Zylstra said he includes in his exhibit information explaining von
NotHaus’ bartering philosophy and why von NotHaus believes the Liberty
Dollar is important; explores the legal ramifications from the side of
the federal government, including providing a chronology of legal
developments; and examines the Liberty Dollar from the view of
consumers who appreciate being able to hold a piece of silver in their
Zylstra said he obtained most of his Liberty Dollars
from a Liberty Dollar regional currency officer in Michigan and
another in New York who were part of von NotHaus’ Liberty Dollar
Bernard von NotHaus
Following a six-day trial, on March 18, a federal jury in
Statesville, N.C., convicted von NotHaus — founder of NORFED (National
Organization for the Repeal of the Federal Reserve and the Internal
Revenue Code), its subsequent Liberty Services, and monetary architect
of the Liberty Dollar — of conspiracy against the United States;
making coins resembling and similar to U.S. coins; of issuing,
passing, selling and possessing Liberty Dollar coins; and of issuing
and passing Liberty Dollar coins intended for use as current money.
Von NotHaus is free on bond pending sentencing.
NORFED and Liberty Services promoted Liberty Dollars as an
alternative currency for use in commerce, and reported that it’s
successfully used in transactions in various locales. Liberty Dollars
were sometimes touted by the program’s adherents as “private voluntary
On April 12, Ron Whitney, executive director for the International
Reciprocal Trade Association (www.irta.com), based in Portsmouth,
Va., issued a statement denouncing the Liberty Dollars as not being
part of the modern trade and barter industry.
The extensive statement emphasized the outcome of the von NotHaus
trial did not set a federal government precedent against private
“Mr. von NotHaus was convicted of the charges of counterfeiting
and making and selling currency, barter had nothing to do with the
case,” Whitney said. “The modern trade and barter industry was
recognized by the U.S. government as a legal alternative form of
commerce by the Tax Equity and Fiscal Responsibility Act (TEFRA),
passed in 1982 whereby barter exchanges were deemed third party record
keepers and required to comply with IRS 1099B reporting laws.”
Whitney explained that “barter sales conducted through barter
exchanges are taxable sales reported annually to the IRS.”
“The Liberty Dollar’s verdict is completely separate from the
legally recognized modern trade and barter industry and in our view it
does not represent an effort on the government’s part to declare valid
TEFRA compliant barter transactions as illegal activity,” Whitney said.
The complete statement can be accessed online at the IRTA website. ■