Error coins lawfully issued by the United States Mint remain legal to own, while errors that were illegally removed from the Mint remain government property, a Mint official confirmed Sept. 23.

Tom Jurkowsky, director of the U.S. Mint’s Office of Public Affairs, issued a statement clarifying the Mint’s position on private ownership of error coins. The statement was issued to clarify the government’s position as articulated in a government document released in connection with the arrest of a Mint police officer who pleaded guilty to charges involving the theft of plain edge Presidential dollars from the Philadelphia Mint over a four-year period.

The government bill of information included an explanation of the minting process, noting that after striking, coins “were placed into a collection box called a trap, where they were inspected to see if they met the Mint quality standards. If an error was spotted, coins in the collection box were scrapped and sent to coin destruction machines called wafflers.”

Furthermore, the government bill of information includes a statement about how coins are legally issued by the Mint. “There are only two ways for nonexpendable property belonging to the Mint lawfully to be removed from the Mint facility or come into the hands of a private owner: (1) proper sale of the property as a numismatic item; or (2) proper disposal of the property through the General Services Administration (GSA), commonly through public auction,” according to the government document. “Although the Mint had sold some coin-making equipment as numismatic items ... the Mint had not sold finger feeds, mule coins, or missing edge letter coins as numismatic items.”

That bill of information, including the statement on how government property, including error coins, can be legally issued, caught the attention of attorney David L. Ganz, a longtime numismatist and columnist for Numismatic News. In an article published Sept. 15 by Numismatic News, Ganz wrote that the government statement in the document seemed to essentially argue that a coin had to be “perfect” in order to be monetized and lawfully issued. Ganz wrote that the government did not seem to admit that error coins can legitimately leave the Mint.

Ganz called this a “major change in the Mint’s position and indeed, the U.S. attorney.”

Following publication of the Ganz article, collectors and dealers began discussing whether the Mint was indeed taking a new position on private ownership of error coins, even those pieces known to have been legitimately if mistakenly released through sales of the coins to the Federal Reserve. Mint officials over the years have acknowledged the release of numerous error coins, including tens of thousands of 2007-P George Washington Presidential dollars with plain edges — the same general type of error coins stolen by the Mint police officer beginning in 2007.

After Coin World staff received a number of inquiries from hobbyists on this subject, the publication asked the Mint for clarification. Jurkowsky issued the following statement in response to Coin World’s request:

“Error coins that are lawfully issued — coins that were not detected by humans or machines — belong to whomever has lawful possession of them. The United States Mint strives to achieve only the highest quality of coins that it produces. However, we as humans — despite our high professional standards and use of exceptional machinery and equipment — occasionally make mistakes. While rare, coins containing errors have legally left our facilities. As long as such coins have been legally issued (e.g., numismatic coins sold to collectors who purchase numismatic products, or circulating coins sold to the Federal Reserve Banks), they may be privately owned. We do what we can to minimize those occurrences and pride ourselves on the very low number of error coins that do, in fact, find their way into circulation or into our numismatic products.

“What we cannot control, unfortunately, is human nature and a person’s willingness to abuse the trust and authority that is given to them. And what we cannot legally sanction is the private ownership or sale of the objects of such abuse — error pieces that were never legally issued and, as such, remain property belonging to the United States. When that abuse occurs, we will act appropriately.”

Based on Jurkowsky’s statement, it would seem that the coins stolen by the Mint police officer and sold into the marketplace remain Mint property and thus are not legal to own. However, it remains to be seen whether those coins can be distinguished from those Presidential dollars lacking edge inscriptions that were legitimately released. The future of the stolen coins may hinge on any continuing investigation into their theft and distribution into the marketplace.

Mint police officer admits guilt

The legal case involving the stolen error coins became public in early September.

A former Philadelphia Mint police officer pleaded guilty Sept. 8 in federal court in New Jersey to stealing error Presidential dollars lacking their edge inscriptions from the facility and selling them to a coin distributor in California for approximately $2.4 million.

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.

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. ¦