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By Jon Christian Ryter

November 17, 2007


A dozen FBI agents staged a raid on the Liberty Dollar's Evansville, Indiana office at 8 a.m. on Wednesday. Nov. 14 and confiscated all of its property and equipment—including about two tons of commemorative Ron Paul coins. Liberty Dollar, founded by money architect Bernard von NotHaus in 1998, was created as an alternate "private, voluntary barter currency" to the US dollar. Liberty Dollar was headquartered in a strip mall at 225 N. Stockwell Road in Evansville. The future for Liberty Dollar—and its founder—who came under investigation by the US Treasury last fall, appears bleak.

Liberty Dollar was founded as the National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Code [NORFED]. Von Nothaus caught the eye of the federal government which launched an investigation of the Liberty Dollar in 1999. At the time, Liberty Dollars were largely paper silver certificates with only a limited amount of coins in circulation. In 1999 the Secret Service, the investigative arm of the US Treasury investigated the Liberty Dollar certificates and determined that while the company might be a thorn in the side of the government, the certificates they peddled as barter currency could not be construed as "counterfeit money" or a scam since NORFED had sufficient silver on deposit to redeem the certificates they issued. A statement to that affect was issued by Claudia Dickens, a spokeswoman for the US Bureau of Engraving and Printing at the time. She said, "There's nothing illegal about this. As long as it doesn't say legal tender, there's nothing wrong with it." The term "legal tender" means that the monetary unit must be accepted by all people as money to repay all forms of debt in the United States. The certificates did not look like money, did not represent itself as money and, thus, could not be construed by the government as a counterfeit form of money.

That changed when von Nothaus began the mass coining of his Libertys rather than printing them—and when he began to refer to them on his website as "real money" or as "the second most-popular currency."

After coming under scrutiny again from the US Treasury in September, 2006, which presented NORFED with a cease and desist order, von Nothaus dissolved NORFED as of January 1, 2007, announcing it would distribute Liberty Dollars without a political agenda. In March, 2007, von Nothaus filed a lawsuit against Henry M. Paulson, Secretary of the Treasury, then US Attorney General Alberto Gonzales, and Edmond C. Moy, Director of the US Mint asking the court for a declamatory judgment againsat the federal government.

In its initial warning to NORFED, the government argued that Liberty Dollar was marketing privately-produced gold and silver "Liberty Dollar" medallions as a form of money—a privilege exclusively and constitutionally reserved for the federal government. Article I, Section 8, subsection 5 provides that Congress alone possesses the exclusive franchise to coin money and regulate its value. By law (31 USC § 5112[a]), Congress directs the US Mint to mint coins—and to establish the values of those coins. Congress places the responsibility to control the minting and distribution of coinage to the Secretary of the Treasury (31 USC § 51131). Accordingly, only the US Mint has the constitutional authority to issue "legal tender" (i.e., real money). Under 18 USC § 486, it is a federal crime to utter or pass, or attempt to utter or pass, any coins of gold or silver intended for use as "current money." Liberty Dollar was on safe ground with barter certificates. However, when they decided to mint coins with an intrinsic value far greater than the fiat coinage created by the US Mint, NORFED started building a house of cards that was doomed to fall.

Web advertisements, the US Mint argued, referred to the Liberty medallions as "real money," and as "currency." NORFED crossed that invisible line when it discounted the paper Liberties and told "Liberty Associates" they could earn money by spending the Liberty Dollar into circulation. Uncle Sam's position is that only a "legal tender" monetary system can be "spent." The statement on the website advising associates that they can spend the medallions into circulation, the government argued, confirms that NORFED construed their "issue" to be current money. NORFED views its product clinically as a barter medium of exchange and not as "current money" or "legal" tender based on the ancient adage of trading things on par value—a side of beef for a few bushels of corn and wheat—or an ounce of silver for a bag of groceries or half tank of gas.

The US Mint told Sen. Bill Nelson [D-FL] in a letter referencing a constituent of Nelson's, Albert Wagner, who challenged the US Mint classification of the Liberty Dollar, advising Nelson that NORFED's "...website and promotional materials refer to the medallions as 'real money' and 'currency,' and claim that the 'Liberty Dollar' medallions are 'legal' and 'constitutional.' the medallions," the letter said, "bear inscriptions and designs similar to those found on United States coinage, which may lead unwary merchants or consumers to accept the medallions as legal tender by mistake."

Sadly for NORFED, even after the US Treasury filed their initial cease and desist warning against them, the company continued to refer to the Liberty Dollar—both paper and coin—as a private, non-government form of currency even though it has had a disclaimer on its website since 2004 stating that gold and silver Liberty coins are neither "legal tender" nor "current money." Nor, the websie claimed, did the coins resemble or appear "...to be coinage minted, issued, authorized, or approved by any government agency." Further, the coins carry the website address and phone number to identify them as advertising specialty items and not legal tender. Since 1998, NORFED has more than $20 million in Liberty Dollar coins and certificates in circulation. Approximately 2,500 merchants nationwide accept Liberty Dollars for goods and services. 

The US Mint told the Washington Post in October, 2006 it acted only after federal prosecutors around the country began forwarding inquiries about the coins, and realized the medallions had become a problem. US Mint spokeswoman Becky Bailey told the Washington Post at that time that "...we don't take these consumer alerts lightly. Merchants and banks are confronted by confused customers demanding they accept Liberty Dollars. They are not legal coin." One of those referrals came from the FBI in New York after an incident involving the attempted use of a Liberty Dollar when Amanda Buczek and her boyfriend Joel Lattuca at the refreshment stand at a New York Islander's hockey game that resulted in the arrest of her father, Dan Buczek, 55 and her brother Shane after Amanda asked the attendant if they accepted Libertys. He said no, and they paid him with a Federal Reserve note. An off-duty Buffalo detective arrested Dan Buczek and his son Shane—not the daughter or boyfriend—and contacted the FBI in an attempt to pursue counterfeiting charges against the Buczeks. While the felony charges that were initially filed against the Buczeks were later reduced to misdemeanors, a spokesman for the US Mint said that attempting to use the Liberty Dollar to pay for products or services could land the consumer in prison for up to five years.

According to a US Mint spokesperson, NORFED encourages users to "do the drop." Doing the drop means the Liberty Associate should drop one of the coins into the hand of the merchant so he can feel the weight of it, which is either solid silver or solid gold. Clearly, the minting of solid silver or solid gold—or solid platinum—commemorative coins are legal. And clearly, anyone with a decent pair of eyes can see that the coins are not the currency of the realm—regardless what the NORFED website claimed prior to that entity's dissolution on January 1, 2007. The production, sale and possession of Liberty Dollars as a barter coin is not illegal. As the US Mint noted to both the Washington Post and Sen. Nelson, there is a comparative similarity in the fact that NORFED used the phrase "Liberty," the Liberty image and the phrase, "In God We Trust" (which the US government is now attempting to remove from our currency because the phrase is offensive to Muslims) to make its medallions resemble the coins of the realm.

In the search warrant presented to the employees at 225 N. Stockwell Road at 8 a.m. on Nov. 14, FBI special agent Andrew Romagnuolo and Secret Service agent David Stefanich with 10 other federal agents conducted the search of the Evansville office and the seizure if everything in the building except desks and chairs. The items listed on the search warrant suggested the FBI pretty much intended to empty the building. According to von Nothaus, the Feds seized about a million dollars worth of Liberty Dollar coins and precious metals that were onsite—including approximately two tons of commemorative Ron Paul coins. In addition, the company's bank accounts and other assets were all frozen. At the same time, according to another source, a similar search and seizure was taking place at the Sunshine Mint in Coeur D'Alene, Idaho.  

In addition to the inventory of coins and silver certificates, the agents seized all precious metal shipping and receiving invoices, as well as the Sunshine Mint records. Sunshine Mint is NORFED's repository in Idaho. Also seized were all dyes, plates, molds, numismatic striking equipment and computer programming software. Also confiscated were the lists of all 2,500 merchants who accept Liberty Dollars. Taken into custody at that time was von Nothaus, the architect of the Liberty Dollar who was detained only briefly. As von Nothaus noted, the FBI and Secret Service seized every ounce of metal in the company's possession including staples and paper clips.  

This reporter asked von Nothaus earlier if there was any chance that the gold and silver used to support the Liberty Dollar certificates—which have been ruled to be lawful—will be returned. Von Nothaus said he had posted a link on his website, http://www.libertydollar.org/classification/index.php, for people holding Liberty Dollar certificates to join a class action lawsuit to demand redemption for their certificates. Von Nothaus pointed out that if the supporters of the Liberty Dollar don't join the class action lawsuit, they will not get their money back. The Federal government will simply keep it as they do with the ill-gotten gains of drug dealers and other criminals, or white collar criminals charged with RICO violations. But, it appears to day, that even if von Nothaus escapes prison, the Liberty Dollars still in the possession of its adherents will be nothing more than momentos of a failed movement to restore the United States to the gold standard.

© 2007 Jon C. Ryter - All Rights Reserved

[Read "Whatever Happened to America?"]

Jon Christian Ryter is the pseudonym of a former newspaper reporter with the Parkersburg, WV Sentinel. He authored a syndicated newspaper column, Answers From The Bible, from the mid-1970s until 1985. Answers From The Bible was read weekly in many suburban markets in the United States.

Today, Jon is an advertising executive with the Washington Times. His website, www.jonchristianryter.com has helped him establish a network of mid-to senior-level Washington insiders who now provide him with a steady stream of material for use both in his books and in the investigative reports that are found on his website.

E-Mail: BAFFauthor@aol.com

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