Uncle Sam emerged the winner Wednesday in the court battle over 10 extremely valuable gold coins known as “Double Eagles” that were minted in 1933 and discovered 80 years later in a dead man’s safe deposit box.
After a 10-day trial, a U.S. District Court jury delivered its verdict by answering a single, simple question. Yes, the jury said, the government proved that it had the right to seize the coins from the heirs of Israel Switt, the gold dealer who died 21 years ago but was a central figure in the trial.
The verdict caps years of litigation in which Switt’s descendants, led by grandson Roy Langbord, have complained that the federal agents violated their rights by seizing the coins — said to be the most valuable coins in the world — and refusing even to consider compensating them.
The 1933 Double Eagle is a $20 gold coin that was rendered exceedingly rare when its release was canceled when the FDR administration took the United States off the domestic gold standard. Until recently, only three were known to exist — two in the Smithsonian and a single coin that was sold in the 1930s to King Farouk of Egypt and that recently fetched more than $7 million at auction.
All of the others were melted down when the coin run was canceled.
So the coin world was shocked when news broke that the Langbord family had discovered a cache of 10 Double Eagles in a long-abandoned bank safe deposit box.
But when the Langbords came forward and sought to authenticate the coins, the government’s response was to seize them as stolen government property.
Early on, it appeared that the government had some explaining to do when U.S. District Judge Legrome D. Davis declared that the seizure had violated the family’s due process rights.
But that constitutional violation was effectively cured when the government responded to Davis’ concerns by filing a forfeiture action.
And it was the government’s case — not the family’s civil rights case — that went to trial.
At trial, Assistant U.S. Attorneys Jacqueline Romero and Nancy Rue set out to prove that the coins were stolen from the U.S. Mint in Philadelphia.
Romero told the jury in her closing argument that Mint records conclusively proved that none of the 1933 Double Eagle coins was ever publicly issued.
Although the coin sold to King Farouk was the subject of a special export license, Romero told the jury that Switt’s heirs cannot point to any evidence that his acquisition of 10 never-released coins was in any way legitimate.
Switt was a gold dealer who frequently did business with the Mint, Romero said, and must have stolen the coins if they ended up in his possession.
“He had access, he had motive, he had opportunity,” Romero said.
But the Langbord’s lawyer, Barry H. Berke of Kramer Levin Naftalis & Frankel in New York, told the jury that it was the government’s burden to prove that a theft had occurred more than eight decades ago.
“We don’t know how these coins left the Mint. We don’t know if anyone does,” Berke said. “Could they have left lawfully? Yes.”
Berke told the jury that the case was “about government power and if the government is powerful enough to pull the wool over your eyes.”
Romero, in response, accused Berke of trying to confuse the issues with “smokescreen tactics” that ignored the obvious truths of the case — that Switt and only Switt was responsible for the theft.
“The entire distribution chain starts there and ends there,” Romero said.
The Langbord family is expected to appeal, but the litigation in the trial court is not quite complete.
Davis told the lawyers after the verdict was handed up that he wants to set a schedule for briefs on the nonjury portion of the case in which Davis must decide the government’s separate claim seeking a declaratory judgment on the issue of the ownership of the coins.
Berke declined to comment on the verdict because the litigation is ongoing. •