Wednesday, September 16, 2009
The Gold Coin with Charisma and Lawsuits
When President Roosevelt seized all the US gold coins in the 1933, the US mints had just produced about half a million 1933 $20 gold pieces, called a ‘double eagle’. They were never released by the government but melted down instead, although a few did make it outside the federal vaults.
Two of the coins were given to the Smithsonian, and one went into King Farouk of Egypt’s coin collection. That coin eventually came to the hands of a British dealer and the US government seized it. Finally an agreement with the government was reached and in 2002 it was sold at auction for $7.6 million.
In 2004, 10 more of them were found in an old forgotten family safe deposit box by the family of a Mr. Switt. When the family took them to the US Mint for authentication, the government seized them, claiming they were stolen goods. Mr. Switt had been a gold dealer and the family insists he would have acquired the coins legitimately before the ban, most likely through a gold-for-gold exchange process used by the Mint in those days.
The Secret Service, which polices currency crimes, has argued that all of the double eagles that escaped government control passed through the hands of Mr. Switt (grandfather of the current owner) working with a corrupt cashier at the Mint. A Mint spokesman declined to comment on the case because of the litigation.
The family has sued the government for their return, and a District Court judge recently ruled that the government must prove they were stolen.
With the right timing and a good market, Mr. Fenton (the dealer who sold the Farouk coin) said, they could bring $4 million to $6 million each, because there are many people who would want to own one.
“This coin,” Mr. Fenton said, “has got so much charisma.”