Family in high-profile ‘double eagle’ coin fight vows appeal

Obverse and reverse views of 1933 double eagle $20 gold coin. United States Secret Service image.

Obverse and reverse views of 1933 double eagle $20 gold coin. United States Secret Service image.

PHILADELPHIA (AP) – A Philadelphia family plans to appeal the 2004 seizure of 10 rare gold coins a jury said couldn’t have been legally obtained.

The attorney for Joan Langbord and two of her sons says Monday the family wants its case heard by the 3rd U.S. Circuit Court of Appeals.

The government seized ten rare $20 “double eagles” from the family after Joan Langbord said she found them in a safe deposit box once owned by her father, Philadelphia jeweler Israel Switt.

Langbord took the coins to the Philadelphia Mint so they could be inspected and authenticated. The coins, which are worth millions, were then seized by the government without any compensation being paid to the family.

Last year, a jury agreed with the government’s claim the seizure was lawful because the coins had never been circulated and must therefore have been stolen.

Trial judge Legrome Davis last month agreed the coins belong to the government, no matter how they were acquired.

The saga behind the rare gold double eagles is a convoluted one.

Following a 1933 order from President Franklin D. Roosevelt, the Gold Reserve Act was effected. It outlawed the circulation and private possession of United States gold coins for general circulation, with an exemption for collector coins. This act declared that gold coins were no longer legal tender in the United States, and people had to turn in their gold coins for other forms of currency. The 1933 gold double eagles were struck after this executive order, but because they were no longer legal tender, most of the 1933 gold coins were melted down in late 1934 and some were destroyed in tests.

Two of the $20 double eagles were presented by the United States Mint to the U.S. National Numismatic Collection, and they were recently on display in the “Money and Medals Hall” on the third floor of the National Museum of American History. These two particular coins should have been the only 1933 double eagle coins in existence. However, unknown to the Mint, a number of the coins (20 have been recovered so far) were stolen, possibly by the U.S. Mint Cashier, and made their way, via Israel Switt, into the hands of collectors. The coins circulated among collectors for several years before the Secret Service became aware of their existence. The matter was brought to the attention of Mint officials in 1944 by an investigative reporter who was researching the history of two coins he had spotted in a Stack’s Bowers coin auction catalog. Prior to the launch of an official Secret Service investigation, a Texas dealer resold one of the coins he had purchased from the auction. It left the country.

During the first year of the investigation, seven coins were seized or voluntarily turned in to the Secret Service and were subsequently destroyed at the mint; an eighth coin was recovered the following year and met the same fate. In 1945, the investigation identified the alleged thief. It also confirmed that Switt had sold nine (located) coins, although Switt couldn’t recall how he obtained them. The Justice Department wanted to prosecute both the thief and Switt, but the statute of limitations had passed.

The missing tenth double eagle was acquired by King Farouk of Egypt, who was a voracious collector of many things, including Imperial Fabergé eggs, antique aspirin bottles, paperweights, postage stamps—and coins, of which he had a collection of over 8,500. In 1944, Farouk purchased a 1933 double eagle, and in strict adherence with the law, his ministers applied to the United States Treasury Department for an export license for the coin. Mistakenly, just days before the Mint theft was discovered, the license was granted. The Treasury Department attempted to work through diplomatic channels to request the return of the coin from Egypt, but World War II delayed their efforts for several years. In 1952 King Farouk was deposed in a coup d’etat, and many of his possessions were made available for public auction (run by Sotheby’s) – including the double eagle coin. The United States Government requested the return of the coin, and the Egyptian government stated that it would comply with the request. However, at that time the coin disappeared and was not seen again in Egypt.

In 1996, a double eagle surfaced again after more than 40 years of obscurity, when British coin dealer Stephen Fenton was arrested by US Secret Service agents during a sting operation at the Waldorf-Astoria Hotel in New York. Although he initially told investigators he bought the coin over the counter at his shop, Fenton later changed his story. Under sworn testimony, he insisted the double eagle had come from the collection of King Farouk, although this could not be verified. Charges against Fenton were subsequently dropped, and he defended his ownership of the coin in court. The case was settled in 2001 when it was agreed that ownership of the double eagle would revert to the United States Government, and the coin could then legally be sold at auction. The United States Treasury issued a document to “issue and monetize” the coin, thereby making it a legal-tender gold coin in the United States.

When the coin was seized, it was transferred to a holding place believed to be safe: the Treasury vaults of the World Trade Center. When the court settlement was reached in July 2001, only two months before the Trade Center was destroyed, the coin was transferred to Fort Knox for safekeeping.

On July 30, 2002, the 1933 double eagle was sold to an anonymous bidder at a Sotheby’s auction in New York for $6.6 million, plus a 15 percent buyer’s premium, and an additional $20 needed to “monetize” the face value of the coin so it would become legal currency. This brought the final sale price to $7,590,020, almost twice the previous record for a coin. Half the bid price was to be delivered to the United States Treasury, plus the $20 to monetize the coin, while Stephen Fenton was entitled to the other half.

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Auction Central News International contributed to this report, with thanks to Wikipedia for substantial historical information sourced through their website.

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