Final Chapter In The Case Of The Missing Double Eagle Coins

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

One of the more interesting cases I have written about is Langbord v. U.S. Dept. of Treasury, which I described in a June 2015 post as follows:

It's not every day that you find a case that starts with Depression-era monetary policy, ends with a relatively obscure federal statute, and in between tells the tale of the alleged theft of a coin considered to be "the most valuable ounce of gold in the world." Did I mention that the case also involves both Presidents Roosevelt, King Farouk of Egypt and the Sept. 11, 2001, terrorist attacks? A case recently decided by the U.S. Court of Appeals for the Third Circuit, Langbord v. U.S. Dept. of Treasury, has all of this and more.

Langbord involved the 1933 Double Eagle gold coin. It is a $20 gold piece that was designed by famed artist Augustus Saint-Gaudens after he was commissioned by President Theodore Roosevelt to help beautify American coinage. Almost a half million Double Eagles were minted, but none were ever officially released into circulation. Shortly after they were minted, newly-elected President Franklin D. Roosevelt, seeking to stem a run on the banks, issued Executive Order 6102, which made it illegal to "hoard" large amounts of gold. Accordingly, the U.S. Mint was ordered to stop issuing gold coins and to melt down any gold coins in its possession, including the Double Eagle. As part of this process, two Double Eagles were sent to the Smithsonian Institution for posterity, but the rest were supposed to have been melted down.

As you might have guessed, not all of the remaining coins were melted down. According to the government, approximately 20 of them ended up in the hands of a coin dealer who worked with a corrupt cashier at the US Mint to smuggle them out before they could be melted down. Over the years, it was alleged, he sold several of these coins. But, after his death, his family found 10 of them in his safety deposit box and offered to return them to the government. They requested the same terms as the government had agreed to several years earlier with a different individual who came into possession of another one of the coins. The government originally seized that coin after luring the dealer into a sting conducted at the Waldorf Astoria in New York City, but later, after the dealer sued, agreed to sell the coin at auction and split the proceeds with him. At auction, it sold for almost $7.6 million, more than twice the world record for any coin sold at auction at the time. Plaintiffs in Langbord were looking for the same arrangement for their coins. The government agreed in principle but asked to authenticate the coins first. Plaintiffs agreed and sent the coins to the government for authentication. However, after authenticating them, the government refused to return them, arguing that they were stolen and were rightfully the property of the U.S. government.

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Update: Third Circuit Grants Government’s Request For En Banc Review In Double Eagle Dispute

I have written before about Roy Langbord v. U.S. Dept. of Treasury, a lawsuit over ten old, rare, and valuable "Double Eagle" coins. Very long story, short — plaintiffs gave the coins to the government for authentication, the Government claimed they were stolen and refused to return them, plaintiffs sued to get them back. A divided panel ruled in favor of plaintiffs and ordered the coins returned. The Government sought en banc review of this decision and, on July 28, 2015, this request was granted. As a result, the panel's decision has been vacated and this already fascinating case continues to roll on. Stay tuned.

Update: Government Seeks En Banc Review in “Double Eagle” Coin Case

by: Peter J. Gallagher (@pjsgallagher)

A few weeks ago, I shared an article I published in the New Jersey Law Journal about a dispute over some rare coins that were allegedly stolen from the U.S. Mint more than 80 years ago: The Case Of The Missing Double Eagle Coins. The saga now continues.

As you may recall, the case of Langbord v. United States involved ten Double Eagle coins that were minted in 1933 but never put into circulation. It was believed that all of the Double Eagles had been melted down except for two that were sent to the Smithsonian. Over the years, however, several of these coins began to appear on the market. The government alleged that all of these Double Eagles were illegally removed from the U.S. Mint in Philadelphia by a cashier, George McCann, in concert with a coin dealer, Israel Switt.

The Government was able to recover most of the purloined Double Eagles in the 1940's and 1950's without much fanfare. Several others slipped through the cracks, however, including one that was illegally removed from the Mint, but legally shipped to King Farouk in Egypt (the Government mistakenly granted an export license). When this coin resurfaced in the mid-1990's, the Government seized it from a dealer trying to sell it. Given the confusion about its ownership created by the issuance of the export license, however, the Government agreed to auction it and split the proceeds with the owner. In 2011, it sold for a record $7.5 million at auction.

Shortly after the auction, Mr. Switt's daughter and grandsons, the Langbords, contacted the Government about 10 additional Double Eagles that they claimed to have found in Mr. Switt's safe-deposit box. They sent them to the Government for authentication and suggested that they be auctioned as well, with the Government splitting the proceeds with the Langbords like it had done with King Farouk's Double Eagle. The Government authenticated the Double Eagles, but refused to return them , claiming they were stolen property.

The Langbords sued to get the coins back. A jury ruled in the Government's favor, but a divided panel of the U.S. Court of Appeals for the Third Circuit reversed and ordered that the Double Eagles be returned to the Langbords. The Third Circuit held that the government failed to follow the Civil Asset Forfeiture Reform Act ("CAFRA") and therefore could not keep the coins.

On July 1, 2015, the Government sought en banc review of this decision. The petition is, as expected, a sober, straight-forward recitation of the ways the Government believes the panel got CAFRA wrong, but it does contain at least one barb: "The family of a thief now stands to benefit in the millions of dollars on the basis of property that belongs to the people of the United States . . . . "

Stay tuned to see if the Government's petition is granted and, if it is, what happens before the full U.S. Court of Appeals for the Third Circuit.