US Coins

Federal trial opens for Liberty Dollar founder

Trial began March 8 in the U.S. District Court for the Western District of North Carolina in Statesville, where Bernard von NotHaus — creator of the Liberty Dollar — is being prosecuted on three criminal charges related to counterfeiting.

In a March 6 e-mail to his supporters, Von NotHaus defined the case as an “epic battle … one lone stubborn individual American vs. the might and fright of the U.S. government.”

He added, “The lines are clearly drawn between an individual’s freedom, to come up with creative ways, such as barter to deal with government mismanagement of our economy and its continued nullification of our Constitution.”

Von NotHaus founded the National Organization for the Repeal of the Federal Reserve Act and Internal Revenue Code, or NORFED, in 1998. He worked with merchants to accept his private barter currency, Liberty Dollars, as payment. NORFED was later renamed Liberty Services.

Liberty Dollars were produced as both precious metal and copper rounds bearing a face value and as gold and silver certificate warehouse receipts.

The federal government alleges that Von NotHaus, with three other defendants, worked together to violate the law by making Liberty Dollars the government characterizes as “coins” of silver “intended for use as current money” and “in resemblance of genuine coins of the United States ...”

Von NotHaus was federally indicted on May 19, 2009, on three counts involving counterfeiting, and he requested that he be tried separately from his co-defendants.

The U.S. Mint posted a consumer alert about NORFED on its Web site on Sept. 13, 2006, stating that using the Liberty Dollar as currency violates federal law.

A jury composed of nine men and three women, seated March 8, will determine von NotHaus’ guilt or innocence.

U.S. Assistant Prosecutor Craig Morenao, in opening statements, said the government would set out to prove that von NotHaus deliberately told people to give Liberty Dollars as change for Federal Reserve notes, in direct violation of laws that specifically prohibit the use of passing originally designed coins as current money.

The prosecution stressed that Liberty Dollars have numerous traits resembling official U.S. coins.

Among the 75 exhibits presented by the prosecution were Liberty Dollars, a T-shirt screened “U.S. Mint can bite me!” and production items confiscated from the privately owned Sunshine Mint in Idaho, where Liberty Dollars were produced under contract.

The prosecution’s first witness, an FBI special agent, testified that the Liberty Dollar resembles and is confused with U.S. currency, and that the marketing of the Liberty Dollar was a multi-level marketing pyramid scheme.

Undercover FBI agent

On March 9, the prosecution presented testimony from an undercover FBI agent who trained at Liberty Dollar University between August 2005 and April 2007, as part of an FBI investigation.

She testified that the training stressed that Liberty Dollars were not numismatic items but rather currency that was meant to be spent. On cross examination, she confirmed that Liberty Dollars were always referred to as currency and never as a coin.

On March 9, Daniel P. Shaver, the U.S. Mint’s chief legal counsel, testified that no entity other than the U.S. Mint may mint U.S. coins and that the FBI requested that the Mint post a “Hot Item” to the Mint’s Web site regarding the potentially confusing Liberty Dollars.

The defense’s cross examination of Shaver brought out that individual design elements on U.S. coins are not trademarked, and that trademark violation is noncriminal.

On March 10, an FBI agent testified about confiscating dies, blanks, silver bullion and records from the premises of the private Sunshine Mint, which struck the Liberty Dollars.

Brian Silliman, a numismatist and professional grader employed by Numismatic Guaranty Corp., testified as an expert witness on similarities between Liberty Dollars and U.S. coins.

The government rested its case after slightly more than two days of testimony at 12:25 p.m. on March 10.

The trial was recessed until March 14 to allow time for defense witnesses to arrive in North Carolina. ¦

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