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eBay probing several sales of counterfeit Liberty coins
By Jim Rutledge

SAN JOSE, Calif. — Security officials at the online Internet site eBay, working with U.S. Secret Service agents, are investigating about a dozen coin dealers and collectors who have been selling a series of counterfeit coins called “Liberty Dollars” on the Internet.

The coins were designed and created by 69 year old Bernard von NotHaus, who was convicted last year of violating federal counterfeit laws.

A handful of dealers and collectors from across the country are selling the Liberty Dollar coins, several made with the likeness of the face of Lady Liberty on the 1922 U.S. $1 Liberty Peace silver coin. There are many variations of the counterfeit Liberty Dollars including one series with the likeness of former U.S. Presidential candidate and Texas Congressman Ron Paul that was listed for $6,300 for a 2008 Platinum $2000 coin with a stamped Serial No. 39 on the coin’s face.

The posting said the coin was one troy ounce of gold. This was the highest price for any of the eBay listings of Liberty Dollars. Ron Paul had no knowledge of the coins or had any involvement in the development of the coins, according to media accounts.

The action by eBay and the Secret Service comes after an examination of the coins by AntiqueWeek while developing a story on the legal status of the Liberty Dollars when the coins were ruled counterfeit and subject to seizure. AntiqueWeek discovered more than 100 of the coins being sold on eBay.

Investigators from eBay have been in touch with the Secret Service, but eBay declined detailed comment. In a response to AntiqueWeek, an eBay spokesman said, “eBay is fully committed to provide a safe, secure, online shopping experience to millions of people. We are working with relevant law enforcement agencies and will take the appropriate action on this matter.”

Secret Service agent Glen Kessler, who has worked on the von NotHaus case, also declined comment.

Von NotHaus is an anti-government activist who is free on bail and faces more than 15 years in prison for minting his own currency. U.S. District Judge Richard Voorhees of the Western District of North Carolina is expected to set a sentencing date soon. Voorhees is considering several legal issues in the case including a forfeiture proceeding to decide if the government had the right to seize more than $7 million worth – or five tons – in Liberty Dollars seized in 2007 from a warehouse by the FBI.

Following the jury’s verdict, U.S. Prosecutors last labeled the .999 silver Liberty Dollars contraband and counterfeit, and subject to seizure by the Secret Service.

Lia Bantavani, a spokesperson for the U.S. Attorney offices in North Carolina, said, “The coins are considered contraband because a federal jury found they were both counterfeit and in similitude of U.S. coins. In terms of value, the one troy ounce of silver in the coin has value.” She did not know how many coins were still in circulation.

Since Thanksgiving, federal agents and eBay officials from the company’s law enforcement division have been examining more than 3,000 coin listings from more than 45 pages of collectible silver and gold coins. One of the giveaway signs that the counterfeit coins are illegal has a play on words with the motto “Trust in God” verses the legal inscription on the legitimate U.S. coins, “In God We Trust.”

According to press accounts following von NotHaus’s trial, federal prosecutors were successful in arguing that von NotHaus was, in fact, trying to pass off the minted silver and gold coins as U.S. currency. The coins were made in denominations of $5, $10, 20, $50 and $100, featuring the dollar sign and U.S.A., giving the appearances that the coins were legitimate currency.

In addition, several forms of silver certificates were printed in denominations the same as the coins, except a $1,000 certificate was added.

Nearly all the eBay listings for the Liberty Dollars had “(NORFED)” in capital letters to identify the coin. Until 2009, von NotHaus’s company, Liberty Services, distributed the coins. Liberty Services was formerly known as the “National Organization for the Repeal of the Federal Reserve and the Internal Revenue Code” (NORFED). The company was based in Evansville, Ind.

The many variations of the Liberty Dollars on eBay were listed “for bid” or “buy it now,” and the prices varied greatly depending on the condition of the coin. There were 10 other variations of the Ron Paul Liberty Dollars including a $1,000 gold coin listing for $4,900. There was a posting for a 2010 Ron Paul $25 coin selling for $36.

According to the dealer’s posting, he had sold 655 of the $25 coins and had 10 remaining in stock. The dealer is from Mount Morris, Mich. The same dealer also had a 20 Euro Liberty Dollar listed for $2,750 with a closing date of Dec. 10.

Another dealer had a $10 Queen Lilivokalani Liberty coin from Hawaii with 17 bids at a top price of $306. It was listed as “rare, partially layered in gold, mint.” The dealer had 50 other Liberty Dollar coins up for bid. It was from the same Michigan dealer.

According to federal authorities, it is illegal to sell and buy counterfeit coins.

Almost all of the dealers or collectors who posted the Liberty Dollar for sale acknowledged that the coins were made by convicted counterfeiter von NotHaus and mentioned in one way or another that the coins were not U.S. currency, and called the coin selections a rare or valuable coin collectible.

AntiqueWeek contacted many coin experts who all had a negative opinion on the value or the status of the Liberty Dollars. The Professional Numismatists Guild declined to take a formal position on the coins, but Armen Vartian, the attorney for the guild said, “Personally, I wouldn’t recommend that my clients buy or sell them because of the legal situation.”

Doug Mudd, speaking for the American Numismatic Assoc., reiterated a counterfeit coin warning presented by the country’s leading coin experts, “urging consumers to educate themselves before making purchases; know what you are buying, and purchase only from reputable, experienced rare coin dealers.”

He added, “Know your coins!”

At the time of von NotHaus’ arrest, he said he had developed the Liberty Dollar in 1998 as an “inflation-proof” alternative currency to the U.S. Dollar, which he claimed, has devalued since the Federal Reserve was established in 1913. The jury thought otherwise, however, and convicted him after 90 minutes of deliberations.

He faces up to 15 years in prison, a $250,000 fine and may be forced to give up $7 million in coins and precious metals that were seized in the FBI raid five years ago.

The Secret Service seized $70 million in counterfeit currency last year before it reached the public.

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