After ‘Liberty Dollars’ Creator Convicted, Feds Seek Millions

The U.S. government wants ownership of $7 million worth of coins manufactured and sold by Bernard von NotHaus, a 67-year-old antigovernment icon who became a “high priest” in his own marijuana-smoking church.

A federal jury in Statesville, N.C., decided on March 18 that the “Liberty Dollars” and other silver, gold and copper coins manufactured in North Idaho and sold throughout the United States by von NotHaus and his sales team violated federal laws. Von NotHaus, the founder of the National Organization for the Repeal of the Federal Reserve Act (NORFED), was convicted on charges of conspiracy and two counterfeiting-related charges.

No sentencing date has been set for von NotHaus, who could get up to 15 years in prison. Three other co-defendants are still awaiting a separate trial.

The Liberty Dollars are still a hit with some coin collectors without a political or philosophical agenda. But most buyers, it appears, came from the ranks of anti-tax or radical “sovereign citizen” movements. The common denominator: challenging the authority of the federal government to tax and regulate, along with the notion that the Federal Reserve is controlled by private Jewish bankers.

Never bashful, von NotHaus testified in his own defense, telling the jury he had done nothing illegal and had every right as a U.S. citizen to mint and sell his own coins.  He once said he wanted his private coin-producing operation to be to the Federal Reserve what FedEx became to the U.S. Postal Service.

Although given little attention by the media, the case appears to be the first time the U.S. government has brought a successful criminal prosecution against someone viewed by federal authorities as a direct threat and competitor to the U.S. Mint and the Federal Reserve Bank.

The NORFED operation also printed its own paper currency — supposedly backed by silver deposits in a vault — but that aspect of the operation was not included in a superseding indictment brought last November by a grand jury in North Carolina.

The charges came after a 5-year FBI investigation that included raids at a private mint in Coeur d’Alene, Idaho, and NORFED’s headquarters in Evansville, Ind., as well as undercover purchases of Liberty Dollars in North Carolina.

Promoted on the Internet, the NORFED sites – even cached versions – have disappeared because of a court order.

As various government agencies began investigating the legality of his Liberty Dollar operation, von NotHaus opened the Free Marijuana Church of Honolulu, giving away pot and calling himself a “high priest” who had proudly used it for 40 years.

At the time of raids, the private mint in Idaho was making “Tea Party” and “Ron Paul” dollars, which were part of the eight tons of booty seized by FBI agents, court documents show.

Now, in a second phase of the criminal proceeding, federal prosecutors will go back to court in Statesville on April 4 to seek forfeiture of the coins and precious metals seized in Coeur d’Alene and Evansville in 2007.

Von NotHaus, who remains free on bond, and his attorney, Aaron E. Michel of Charlotte, N.C., are prepared to fight the government’s attempt to take ownership of the assets at a forfeiture hearing before U.S. District Court Judge Richard Voorhees.

“We don’t think that there’s a crime that’s been committed,” Michel said when asked for comment.  “We will appeal and challenge the jury verdict.”

The federal judge already has denied an oral motion for a new trial. He has given no indication he will postpone the forfeiture hearing.

Court documents show federal prosecutors are seeking forfeiture of  “all property” used in the minting operation, including minting dies, molds and casts seized from the Sunshine Minting, a private business in Coeur d’Alene, Idaho.

Also included on the forfeiture list are eight tons of precious metals, including 168,599 silver Liberty Dollars which sold for $50 or more apiece, an additional 1,000 pounds of silver bullion, and 3,039 pounds of copper coins.

The seized coins include Liberty Dollars owned by an estimated 250,000 purchasers who were storing them in NORFED’s leased “vault” at Sunshine Minting, Michel said. The owner of the mint, Tom Power, did not return telephone calls seeking comment.

Spokane attorney Ronald Van Wert, who represents Sunshine Minting, said Power and the Coeur d’Alene mint  “are not involved in the forfeiture action at all.”

Power, who was subpoenaed but not called as a witness for the criminal trial, became owner of Sunshine Minting in 2007 -- eight years after the mint began manufacturing the Liberty Dollars under a contract with von NotHaus.

“It’s like making widgets,” Van Wert said. “You get paid and make the widget. We had no involvement with what he [von NotHaus] did with the coins after they were minted.”

Since the seizure, the price of an ounce of silver has increased from $20 to about $35, and the numismatic value of the Liberty Dollars is skyrocketing because the government now considers them contraband and they’re a hot item with some coin collectors, Michel said.

“They’re sort of treating these Liberty Dollars like they were cocaine – you know, illegal,” Michel said. “That’s certain to drive the price up.”

The defense attorney also was sharply critical of Anne M. Tompkins, the U.S. Attorney for the Western District of North Carolina. Prosecutors “painted Mr. von NotHaus in an inflammatory, false light to get a conviction,’’ Michel said. “Now, in a Department of Justice press release they’re characterizing him as a ‘domestic terrorist.’”

The jury spent only 90 minutes deliberating before convicting von NotHaus of making coins “resembling and similar to U.S. coins,” and issuing, passing, selling and possessing Liberty Dollars intended for use as common currency.

“Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism,” Tompkins said in a Department of Justice news release after the conviction.

“While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country,” Tompkins said in the statement.

The investigation, begun in 2005, involved undercover purchases of Liberty Dollars by an FBI agent in North Carolina, court documents show. The FBI was assisted by the U.S. Secret Service, the United States Mint and the Buncombe, N.C., sheriff’s department.

Von NotHaus, a self-described “monetary architect,” began producing his Liberty Dollars in 1998 when he lived in Hawaii where he worked at the Honolulu Mint.  His organization, initially formed as a tax-exempt nonprofit, later changed its name to Liberty Services.

Its headquarters eventually was based in Evansville, Ind., where its first marketing director was James W. Thomas, publisher of Media Bypass, a now-defunct magazine directed at antigovernment “Patriot” groups and individuals.