Tuesday, April 5, 2011

Private Tender: Anti-Government Group Mints Its Own Coins

Money doesn’t grow on trees. It also can’t be printed or minted by private citizens—as four co-conspirators in North Carolina and Indiana recently learned the hard way.

Last month, the founder and “monetary architect” of an illegal currency known as the Liberty Dollar was convicted in North Carolina on federal charges of making illegal coins and selling them—at a profit—to compete with legal U.S. currency. Bernard von NotHaus, of Evansville, Indiana, was found guilty of making coins resembling U.S. coins; issuing, passing, selling, and possessing Liberty Dollar coins; issuing and passing Liberty Dollar coins intended for use as current money; and conspiring against the United States. Three others indicted in the case are awaiting their own trials.

“People understand that there is only one legal currency in the United States,” said Owen Harris, then-special agent in charge of our office in Charlotte. “When groups try to replace it with coins and bills that don’t hold the same value, it affects the economy. And consumers were using their hard-earned money to buy goods and services, then getting fake goods in return.”

It all began in 2004, when our Charlotte Division learned that a customer at a North Carolina financial institution had tried to use silver coins that were not legal U.S. currency. Our investigation revealed that the coins came from the National Organization for the Repeal of the Federal Reserve and Internal Revenue Codes (or NORFED), headquartered in Evansville, whose mission was to return the country’s monetary system to gold and silver. The president of the organization was Bernard von NotHaus, who marketed his currency as inflation-proof, claimed it was backed by silver and gold, and said it could be used to compete with—and limit reliance on—U.S. currency.

Our investigation, which included an undercover scenario, revealed that NORFED contracted for the minting of about $7 million worth of Liberty Dollars in Idaho. The organization also took orders and payments from customers for Liberty Dollars and organized “Liberty Dollar University” sessions to help educate people interested in selling, buying, or using the currency. There was even a Liberty Dollar website.

NORFED used several groups of people to get its illegal coins into circulation:

■Regional currency officers marketed Liberty Dollars in their geographic areas.
■Liberty Dollar associates paid a $250 membership fee and received 100 Liberty Dollars, plus instructions on how to market the currency.
■Recruited merchants and business owners accepted Liberty Dollars in exchange for goods or services and handed out the coins as change.

During the course of the investigation, the U.S. Mint issued a press release warning that the Liberty Dollar was not legal tender and that the Department of Justice had determined that the use of these coins as circulating money was a federal crime. This press release was sent to known NORFED regional currency officers. Despite the warning, though, NORFED and its officers, members, and associates continued to break the law and circulate the illegal tender.

As with many of our other cases, we didn’t work this investigation alone. Providing tremendous assistance was the Buncombe County Sheriff’s Office, U.S. Secret Service, U.S. Treasury’s Office of Inspector General for Tax Administration, North Carolina Joint Terrorism Task Force, U.S. Postal Inspection Service, and U.S. Mint.

3 comments:

  1. There are lots of problems with this article, primarily a lack of economic understanding. Money is a medium of exchange. This is different than currency. Currency is whatever the monopoly of force (the state) says it is. The state now says that US currency is green pieces of paper it issues which are not redeemable in anything other than more green pieces of government paper. And with legal tender laws the state says that all people must accept government green pieces of paper (that are unbacked by any commodity whatsoever) as exchange for all public and private debts. Force then, is the basis of the present economic system.

    In a free society the most commonly accepted commodity (historically in most of the world this has been gold and silver) becomes the medium of exchange without government threats and violence. Plus the money has real value - it's a commodity. As such it can't be printed like the Feds print green papper. Therefore, governments can't monopolise it and use it to drive up prices by expanding the supply (inflation) to cover their expanding and seemingly endless intervention and activities.

    Therefore, people who believe in limiting government in order to maximise liberty support real money, not currency - especially not currency such as the US dollar today that is unbacked by any commodity. Before FDR (who issued an executive order stealing all the private gold in the US back in 1933) the US has a gold standard which limited government spending since their green pieces of paper were tied to a commodity.

    We need to abolish legal tender laws and allow for free competition of money. Ultimately gold and silver will almost certainly prevail. This will limit government spending and activity, reduce violence and threat of violence in our society (as engaged in by the Feds to protect their monopoly) and allow for a more honest and open exchange in a freer market.

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  2. Michael, your argument has some excellent points. The place where I actually think the parties in this article were wrong is where they had a racket going on (charging membership fees and dues, etc.), but the fact remains that their monetary system was much more sound and stable than the green paper joke the Fed has going on. Your logic reminded me very much of Congressman Paul's arguments in his books The Revolution, End the Fed, and the Case For Gold.

    Thank you for your input!

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  3. Zach, Ron Paul does argue just this point quite often. I think his reasoning on this, which is based in large part on what today is called Austrian Economics theory (and what once used to be rather common sense in the early Jeffersonian Republic), is correct.

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