Federal court jury: rare gold coins are government property

In May 1933, during the heart of the Great Depression, President Franklin D. Roosevelt signed Executive Order 6102, which outlawed the private ownership of gold.

The measure was designed to help spur economic growth in the country.

Then, in January 1934, Congress passed the Gold Reserve Act, which required U.S. citizens to immediately turn over any gold and gold certificates, save for a small amount, to the Federal Reserve.

The prohibitions were relaxed in the mid 1960s, and by the mid 1970s private residents could once again own the precious metal.

But it’s what happened during those early years of gold prohibition that had bearing on a federal civil trial that just wrapped up right here in Philadelphia.

On July 20, a federal court jury at the U.S. District Court for the Eastern District of Pennsylvania decided that 10 1933 “Double Eagle” gold coins, $20 pieces that are worth millions to collectors, belonged to the United States government.

The jury found that the coins, which were in private hands up until their confiscation in August 2005, had been stolen from the U.S. Mint in Philadelphia by a now-deceased Philadelphia jewelry store owner named Israel Switt. The story goes that Switt, with the help of a crooked Mint cashier, was able to embezzle the coins out of the Mint.

Switt was never prosecuted for the alleged theft of the coins from the Mint since it was determined that the criminal statute of limitations under which Switt could have been charged had expired.

Switt’s grandson, Roy Langbord, had discovered the coins years after Switt’s death. They had been tightly packaged in a corner of a safety deposit box that the family had only occasionally sifted through.

According to court papers, Roy Langbord, his brother, David Langbord, and their mother, Joan Langbord, contacted U.S. Mint officials to inform them they discovered the gold coins in the safety deposit box in Philadelphia.

In late September 2004, Roy Langbord, and the family’s attorney, Barry Berke, turned the coins over to Mint officials to determine their status and worth.

In June 2005, Mint officials informed the family they would not be receiving the coins back, since the government contended they were stolen property, according to the court papers.

During trial, the government contended that the coins would have been illegal to own in 1933, and thus concluded that they were property of the United States Treasury.

“In our mind, the issue was truly one of ownership,” Assistant U.S. Attorney Jacqueline Romero, who tried the case for the government, said in a phone interview with the Pennsylvania Record. “Congress is the only entity who can decide who can dispose of government property.”

Romero said Switt’s heirs originally filed suit under constitutional grounds, contending that they weren’t afforded due process when the coins were confiscated by the Mint.

U.S. District Judge Legrome Davis agreed, according to court papers, saying that the government would have to start forfeiture proceedings in order to officially confiscate the coins. Davis issued his order in August 2009.

“The government’s ‘good-faith’ belief that the coins were once stolen is not sufficient, under the circumstances, to justify its decision to conduct a warrantless seizure,” Davis had wrote at the time, according to an article found on the website CoinLink.com.

Langbord’s attorneys said it would be virtually impossible to prove that the coins were stolen by Switt, since there would have been a small window of opportunity in early 1933 during which the coins could have been legally owned by citizens.

In the end, the jury determined that the coins were, in fact, government property, all but ensuring that Switt’s relatives would see no compensation for the rare pieces, which have since been transported to Fort Knox, Kentucky, according to media reports.

Romero, the government attorney, said she believes the coins will eventually be put on display at a museum. There are two other Double Eagle coins on display at the Smithsonian, which were “legitimately sent there years ago by the government,” Romero said.

The Langbord family plans to appeal the recent verdict, according to news reports. Berke, the family’s attorney, did not return a phone call seeking to ascertain whether the appeal is definite.

Romero, however, said she believes the family will appeal the verdict.

Romero said this might have been one of the most interesting cases she’s ever worked on.

“It’s been a very long, strange legal process from the beginning,” she said.

Romero said the case was important because it goes to show that no matter how much time may pass, the government will still pursue stolen property.

“This case is very much about principals,” she said. “You can’t steal from the government and profit off it.”

Asked what would have happened if the Langbord family theoretically sold the coins on the black market, instead of ever having taken them to the Mint for verification, Romero said it’s hard to say. The government probably would have still ended up going after the coins' owners, who ever they might have been at the time.

Of course, she imagines the Langbord family would have been embroiled in its own lawsuit should the theoretical new owners have been tracked down by the government and made to give up the coins.

Asked if there has been any talk about government wasting resources on such an old case, Romero said she has not been made aware of any negative feedback.

“Stolen government property is stolen government property,” she said. “There’s no getting around that.”