by Bill Rounds:
Liberty Dollar Trial and Coin Value
Liberty Dollar saga continues. Since the conviction of Bernard Von
NotHaus for his involvement, there has been significant
discussion about that case, its merits, motivations and implications.
Contrary to the reports of many commentators, the legal issue in
the case was fraud rather than a tyrannical government unjustly
imposing its will. In a follow up article Liberty
Dollar Part III I will include a much more detailed analysis
of the relevant law and its constitutionality.
But there is
an aspect of this case that has the stench of tyranny which I think
a lot of people smell. The motivation of the United States attorney’s
office, including Anne M. Tompkins, Jill Westmoreland Rose, and
others, is much more suspicious.
It is possible
that some of the prosecutors involved in the case have violated
Rules of Professional Conduct. A violation could subject them to
professional sanctions and possible disbarment. They may have also
defamed Mr. Von NotHaus. I am approaching this professionally from
a criminal defense perspective and a plaintiff’s tort lawyer as
if I were advocating for Mr. von Nothaus.
Made False Statements of Law In The Indictment
indict people who they think have broken the law. The indictment
is the legal justification for depriving people of their liberty
in the Liberty Dollar case (at paragraph 33) states:
Section 8, clause 5 of the United States Constitution delegates
the power to coin Money and to regulate the value thereof. This
power was delegated to Congress in order to establish and preserve
a uniform standard of value. Along with the power to coin money,
Congress has the concurrent power to restrain the circulation
of money which is not issued under its own authority in order to
protect and preserve the constitutional currency for the benefit
of the nation. Thus, it is a violation of law for
private coin systems to compete with the official coinage of the
United States. (emphasis added)
There is no
basis in the law or anywhere else which can support the part in
bold letters in any way. I will compare the prosecutor’s false and
misleading summary of the law to the actual law.
In The Constitution
Section 8, clause 5 of the United
shall have Power … To coin Money, regulate the Value thereof,
and of foreign Coin, and fix the Standard of Weights and Measures;
does not define what money, only that it is something that is coined
rather than printed, but instead leaves that critical choice to
the free market. On its face this clause gives the Congress the
power to regulate the value of its own coinage, and that of foreign
coins. This section also goes on to talk about how Congress can
legally define weights and measures like a foot, inch, year, pound,
kilogram, etc. There is absolutely no mention of the ability of
Congress to do anything regarding private coin systems.
Clause 6 continues:
have power to…] provide for the Punishment of counterfeiting the
Securities and current Coin of the United States.
gives Congress the power to punish counterfeiting the coins that
they themselves produce, and probably to punish coins resembling
genuine United States coins. Again, there is absolutely no mention
of private coinage. In fact, the definition of private coinage is
that it is not the current coin of the United States. Therefore,
Congress has no authority over private coinage at all and neither
does any other branch.
COINAGE ACT OF 1792
Fathers were extremely serious about government officials being
engaged in counterfeiting or otherwise debasing the currency. The
Act of 1792 provides an excellent example of how these two clauses
were implemented in legislation to answer the question of What
Is A Dollar? and then provide a punishment for government officials,
but not private individuals, involved in attempting
to redefine that term or perpetuate a fraud on the market.
9. And be it further enacted, That there shall be from
time to time struck and coined at the said mint, coins of gold,
silver, and copper, of the following denominations, values and descriptions,
UNITS — each to be of the value of a Spanish
milled dollar as the same is now current, and to contain three
hundred and seventy one grains and four sixteenth parts of a grain
of pure, or four hundred and sixteen grains of standard silver.
19. And be it further enacted, That if any of the gold
or silver coins which shall be struck or coined at the said mint
shall be debased or made worse as to the proportion of fine gold
or fine silver therein contained, or shall be of less weight or
value than the same ought to be pursuant to the directions of this
act, through the default or with the connivance of any of
the officers or persons who shall be employed at the said mint,
for the purpose of profit or gain, or otherwise with a fraudulent
intent, and if any of the said officers or persons shall embezzle
any of the metals which shall at any time be committed to their
charge for the purpose of being coined, or any of the coins which
shall be struck or coined at the said mint, every such officer or
person who shall commit any or either of the said offenses, shall
be deemed guilty of felony, and shall suffer death.
and financial relics Ron Paul and the legendary James Grant, along
with many others, have begun discussing this aspect of monetary
jurisprudence in the public discourse. For example, James Grant
suggested as a solution to the current financial and monetary chaos
in his Wall Street Journal article Requiem
For The Dollar:
Bernanke with a latter-day Thomson Hankey. Find – cultivate – battalions
of latter-day Hellmans and set them to running free-market banks.
There’s one more thing: Return to the statute books Section 19 of
the 1792 Coinage Act, but substitute life behind bars for the death
penalty. It’s the 21st century, you know.
In the present
case of potential prosecutorial misconduct 18
USC 486 may also be applicable:
as authorized by law, makes or utters or passes, or attempts to
utter or pass, any coins of gold or silver or other metal, or alloys
of metals, intended for use as current money, whether in the resemblance
of coins of the United States or of foreign countries, or of original
design, shall be fined under this title or imprisoned not more than
five years, or both.
Statement Of Law Has No Basis In Law
for the sake of argument, that 18 USC 486 is constitutional, which
will be discussed more fully in Liberty
Dollar Part III, there is no legal authority for u201Crestraining
the circulation of money not issued under its own authority.u201D 18
USC 486 appears to apply only to metal coins and not to other types
of money or currency.
clearly permits u201Cforeignu201D coinage to circulate at the value, based
on weight and fineness, that Congress decides. There is no basis
for the assertion that such restriction is to protect and preserve
the constitutional currency for the benefit of the nation. There
is absolutely nothing in the Constitution or other statutes which
even claims to give Congress the power to u201Crestrain the circulation
of moneyu201D not issued under its own authority, ie: private coinage
the assertions by Anne Tompkins have no basis in law whatsoever.
We can only surmise that they were pulled out of some imaginary
hat, or maybe out of somewhere else.
Of Law Stricken So Jury Did Not Rely On It
this offensive paragraph, and this paragraph only, was deleted
from the indictment before it was presented to the jury, thereby
avoiding the possibility to taint their decision with this blatantly
false statement of the law by a United States prosecutor.
Repeated False Statement Of Law AND Fact To Public
Just when you
thought the drama had ended, the same false statement of law was
repeated in the press
release announcing the conviction:
States Attorney Anne M. Tompkins
Western District of North Carolina
THURSDAY, MARCH 18, 2011
OF MINTING HIS OWN CURRENCY STATESVILLE, NC — Bernard von NotHaus,
67, was convicted today by a federal jury of making, possessing
and selling his own coins, announced Anne M. Tompkins, U.S. Attorney
for the Western District of North Carolina. Following an eight-day
trial and less than two hours of deliberation, von NotHaus, the
founder and monetary architect of a currency known as the Liberty
Dollar, was found guilty by a jury in Statesville, North Carolina,
of making coins resembling and similar to United States coins, of
issuing, passing, selling, and possessing Liberty Dollar coins,
of issuing and passing Liberty Dollar coins intended for use as
current money, and of conspiracy against the United States. The
guilty verdict concluded an investigation which began in 2005 and
involved the minting of Liberty Dollar coins with a current value
of approximately $7 million. Joining the U.S. Attorney Anne M. Tompkins
in making today's announcement are Edward J. Montooth, Acting Special
Agent in Charge of the FBI, Charlotte Division, Russell F. Nelson,
Special Agent in Charge of the United States Secret Service, Charlotte
Division, and Sheriff Van Duncan of the Buncombe County Sheriff's
the evidence introduced during the trial, von NotHaus was the founder
of an organization called the National Organization for the Repeal
of the Federal Reserve and Internal Revenue Code, commonly known
as NORFED and also known as Liberty Services. Von NotHaus was the
president of NORFED and the Executive Director of Liberty Dollar
Services, Inc. until on or about September 30, 2008.
designed the Liberty Dollar currency in 1998 and the Liberty coins
were marked with the u201C$u201D, the word dollar, USA, Liberty, Trust in
God (instead of In God We Trust) and other features associated with
legitimate U.S. coinage. Since 1998, NORFED has been issuing, disseminating,
and placing into circulation the Liberty Dollar in all its forms
throughout the United States and Puerto Rico. NORFED's purpose was
to mix Liberty Dollars into the current money of the United States.
NORFED intended for the Liberty Dollar to be used as current money
in order to limit reliance on, and to compete with, United States
with the Department of Justice, on September 14, 2006, the United
States Mint issued a press release and warning to American citizens
that the Liberty Dollar was u201Cnot legal tender.u201D The Mint press release
and public service announcement stated that the Department of Justice
had determined that the use of Liberty Dollars as circulating money
was a federal crime.
section 8, clause 5 of the United States Constitution delegates
to Congress the power to coin Money and to regulate the Value thereof.
This power was delegated to Congress in order to establish and preserve
a uniform standard of value and to insure a singular monetary system
for all purchases and debts in the United States, public and private.
Along with the power to coin money, Congress has the concurrent
power to restrain the circulation of money which is not issued under
its own authority in order to protect and preserve the constitutional
currency for the benefit of all citizens of the nation. It is a
violation of federal law for individuals, such as von NotHaus, or
organizations, such as NORFED to create private coin or currency
systems to compete with the official coinage and currency of the
who remains free on bond, faces a sentence of up to fifteen years
imprisonment on Count Two of the Indictment and a fine of not more
than $250,000. Von NotHaus faces a prison sentence of five years
and fines of $250,000 on both Counts One and Three. In addition,
the United States is seeking the forfeiture of approximately 16,000
pounds of Liberty Dollar coins and precious metals, currently valued
at nearly $7 million. The forfeiture trial, which began today before
United States District Court Judge Richard Voorhees, will resume
on April 4, 2011 in the federal courthouse in Statesville. Judge
Voorhees has not yet set a date for the sentencing of von NotHaus.
undermine the legitimate currency of this country are simply a unique
form of domestic terrorism,u201D US Attorney Tompkins said in announcing
the verdict. u201CWhile 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,u201D
she added. u201CWe are determined to meet these threats through infiltration,
disruption and dismantling of organizations which seek to challenge
the legitimacy of our democratic form of government.u201D
The case was
investigated by the FBI, Buncombe County Sheriff's Department and
the U.S. Secret Service, in cooperation with and invaluable assistance
of the United States Mint. The case was prosecuted by Assistant
United States Attorneys Jill Westmoreland Rose and Craig D. Randall
and the forfeiture trial is being prosecuted by AUSAs Tom Ascik
and Ben Bain Creed. (emphasis added)
Why that language
was included in the press release is curious if not also nefarious.
Since it was stricken from the Jury Verdict Form therefore it could
not have been the basis of the conviction by the jury.
In other words,
it could not have had anything to do with the case. Since it was
included in the press release about the case, is Anne Tompkins asserting
that it had something to do with this case? If she did, she made
a false statement of fact. The materiality of these false statements
of law and fact can be seen by their impact, which will be discussed
Statements of Law
But Anne Tompkins
did not stop there. It gets worse when she said in the press release:
It is a violation
of federal law for individuals… to create private coin or
currency systems to compete with the official coinage and currency
of the United States.
This is an
even more blatant and egregious misstatement of law. 18 USC 486
never mentions currency, only coins made of metal or alloys. As
before, on its face it could not apply to other types of currency
that are not metal coins such as Disney
Hours, or Potomacs
or the many other private currencies that have been and are currently
in circulation. This statute is therefore clearly limited to metal
coins and not paper or digital currency. It is a grotesque distortion
of the statute to suggest that willing parties cannot use whatever
medium of exchange they desire in a legitimate transaction.
Is Anne Tompkins
Ignorant of the Law or Did She Knowingly and Recklessly Make False
Statements Of Law or Fact?
It is Anne
Tompkins’ job to know the law, especially the laws that she relies
on to deprive people of liberty and property. Her false statements
of the law demonstrate that she is either ignorant of the law or
complicit in flagrantly disregarding it. In either case, she is
potentially exercising her prosecutorial power with reckless disregard.
Just like Harry
Connick ,Sr., these prosecutors will probably never be held responsible
in a court of law for the serious damages that they cause unless
they knowingly made false representations of law or fact.
Violate Model Ethics Rules
shall not knowingly… make a false statement of material fact
or law to a third person…
has a problem. She may have been ignorant of the law at the time
the indictment was drafted, but it is hard to believe that she did
not research the law and remained ignorant throughout trial. If
she knew that she was restating the law improperly in the press
release she would likely be violating Model Rule of Professional
And it gets
worse for her. It is even harder for her to wiggle out of knowing
that her statement of fact was false. The court made a ruling on
a motion to strike the offending language. The prosecutor must have
been aware of that. To then issue a press release about the case
which included the very same language that was thrown out
and made irrelevant to the case is stating a false
fact. She must have known that this fact was false.
If North Carolina
rules of professional conduct are similar to the model rules, some
of these prosecutors could face sanctions and disbarment.
Did Anne Tompkins
Defame Bernard Von NotHaus?
is, essentially, publishing a false statement about a person. In
the press release Anne Tompkins said that Mr. Von NotHaus’ attempts
were a “unique form of domestic terrorism,” therefore
she published the statement. 22
USC 2656f(d) defines “terrorism” as “…premeditated,
politically motivated violence perpetrated against
non-combatant targets…” (emphasis added). She admits
near the end of the press release that Mr. Von NotHaus’ actions
did “not involve violence” which, by definition, could
not have been terrorism. The statement is clearly false. Mr. Von
NotHaus is clearly the individual identified in the press release
which was published to and read by the public.
Mr. Von NotHaus
will probably not have to demonstrate any actual damages because
“terrorism,” as defined by Congress, is a crime. Even
if malice or recklessness must be proven due to the potential public
concern in this case, it should be a simple matter. A prosecutor
that doesn’t know the law that she is accusing someone of breaking
is at least reckless. So Mr. Von NotHaus probably has a very strong
claim for defamation against Anne Tompkins.
Had Improper Motive For Prosecuting
even if she did not know she was making a false statement of law
it does not purify her prosecutorial motives. The language that
she pulled out of a hat
to summarize what she thinks is the law reveals her tyrannical desire
to impose dictatorial controls over the medium of exchange used
by willing parties in private transactions. This is the rank tyranny
that everyone smells.
of Anne Tompkins’ false statements are incredibly profound.
1. It has lead
to widespread misinterpretation of the law. There
are some complex legal principles involved which most lay people,
and some lawyers, have difficulty understanding. The vast majority
of people reporting on the case, and many of the commenters on Liberty
Dollar Part I, were obviously convinced by those false statements.
To make false statements about such a law obfuscates the rights
Encourages invasive investigation and increased
scrutiny of innocent people by law enforcement. The FBI
has parroted the false statement of law issued by Anne Tompkins
in the press release. Now, law enforcement will turn their efforts
and resources to investigating innocent people who are guilty of
no crime, but who the FBI incorrectly believes are guilty of a crime.
3. May effect
market price of gold and silver rounds, medallions and
tokens. There are millions of privately issued rounds, medallions
and tokens in the US of original design (ie: not official currency
of a government). The logical conclusion of these false statements
is that millions of American citizens, thousands of coin shop owners,
hundreds of websites, scores of private mints, and dozens of Chuck
E. Cheeses are in possession of illegal rounds, medallions or
are under the impression that owning, making, trading or selling
such items may be illegal may decrease the demand for those items
which, everything else being equal, will reduce the price. Thus,
every individual or business in possession may suffer economic harm
from these false statements.
4. Leads to
selective enforcement. When everyone is a criminal,
government actors can then selectively
enforce the law against people they find undesirable. In the
past it might have been foreigners, minorities and commies. Now,
it might be someone who thinks the Federal Reserve is a bad idea.
5. It furthers
price suppression scheme. By preventing the legal barter
with gold or silver rounds, more people are use FRN$s to transact.
This increases the demand for FRN$s increases their purchasing power.
At the same time, it decreases the demand for gold or silver because
it is made illegal to use in trade which attempts to eliminate competing
goods in the currency market by introducing a barrier to entry with
threat of prosecution.
of prosecution for bartering with metal rounds, medallions
or tokens. Like their warning
to Liberty Dollar in 2006, these statements serve as a warning
to avoid bartering with gold or silver. Now, prosecutors might be
bold enough to go after anyone who barters with gold or silver,
whether they smell of fraud or not.
The risk of
prosecution to individuals bartering with gold or silver is much
less than the risk Liberty Dollar faced after the DoJ/US Mint warning
was issued in 2006. That one specifically targeted a large operation
that was very visible. Plus, the smell of fraud that accompanied
the operation made it a juicy target.
A general warning
that applies to millions of unrelated people and millions of separate
transactions will hardly incur the same level of law enforcement
scrutiny over any one individual. Plus, enforcement is impractical
because detection of individual transactions requires many more
resources than an investigation of a going concern.
tyrants will capitalize on the zeitgeist to surreptitiously implement
currency controls. The US is currently under mild currency
controls, which, even in their mild form, violate basic liberties
and fundamental human rights. Anne Tompkins’ false statement of
law might convince enough people to tacitly accept additional currency
controls as legitimate and justified.
constitutionality of 18 USC 486 is unresolved.
The portion that applies to coins that are of original design and
do not resemble official US government coins is most likely unconstitutional.
Since the Liberty Dollar conviction does not address the private
coinage issue, we will probably have to wait until someone else
is convicted on that issue before the law can even be challenged.
Given the nonsensical
state of monetary law in the US, there is no way of knowing
whether that portion of the statute will be declared unconstitutional
or not. Unfortunately, that means that someone else using gold or
silver rounds as a medium of exchange will probably be a legal guinea
statements of law are very dangerous to the legal rights, liberties
and fundamental human rights of every American citizen. The misunderstanding
of the law that prompted my previous article What
Liberty Dollar Should Have Learned From The Godfather about
the actual legal issues in the Liberty Dollar case is evidence of
the effectiveness of those false statements. I am releasing Liberty
Dollar Part II because it is a potentially serious violation
of ethical rules by United States prosecutor Anne Tompkins and should
be dealt with quickly and justly. Liberty
Dollar Part III will further assess the risk to individuals
of continuing to barter with gold or silver by analyzing the likelihood
that the statute is unconstitutional.
with permission from How to
Rounds, J.D. is a California attorney. He holds a degree in Accounting
from the University of Utah and a law degree from California
Western School of Law. He practices civil litigation, domestic
and foreign business entity formation and transactions, criminal
defense and privacy law. He is a strong advocate of personal and
financial freedom and civil liberties.