Tag Archives: E-Gold

The Violence Against Non-State Backed Currencies

Yesterday, agents of the FBI raided the offices of NORFED and, according to an email sent by its founder, confiscated all their assets:

Dear Liberty Dollar Supporters:
I sincerely regret to inform you that about 8:00 this morning a dozen FBI and Secret Service agents raided the Liberty Dollar office in Evansville.
For approximately six hours they took all the gold, all the silver, all the platinum and almost two tons of Ron Paul Dollars that where just delivered last Friday. They also took all the files, all the computers and froze our bank accounts.
We have no money. We have no products. We have no records to even know what was ordered or what you are owed. We have nothing but the will to push forward and overcome this massive assault on our liberty and our right to have real money as defined by the US Constitution. We should not to be defrauded by the fake government money.
But to make matters worse, all the gold and silver that backs up the paper certificates and digital currency held in the vault at Sunshine Mint has also been confiscated. Even the dies for mint the Gold and Silver Libertys have been taken.
This in spite of the fact that Edmond C. Moy, the Director of the Mint, acknowledged in a letter to a US Senator that the paper certificates did not violate Section 486 and were not illegal. But the FBI and Services took all the paper currency too.
The possibility of such action was the reason the Liberty Dollar was designed so that the vast majority of the money was in specie form and in the people’s hands. Of the $20 million Liberty Dollars, only about a million is in paper or digital form.
I regret that if you are due an order. It may be some time until it will be filled… if ever… it now all depends on our actions.
Everyone who has an unfulfilled order or has digital or paper currency should band together for a class action suit and demand redemption. We cannot allow the government to steal our money! Please don’t let this happen!!! Many of you read the articles quoting the government and Federal Reserve officials that the Liberty Dollar was legal. You did nothing wrong. You are legally entitled to your property. Let us use this terrible act to band together and further our goal – to return America to a value based currency.
Please forward this important Alert… so everyone who possess or use the Liberty Dollar is aware of the situation.
Please click HERE to sign up for the class action lawsuit and get your property back!
If the above link does not work you can access the page by copying the following into your web browser. http://www.libertydollar.org/classaction/index.php
Thanks again for your support at this darkest time as the damn government and their dollar sinks to a new low.
Bernard von NotHaus
Monetary Architect

For those of you not familiar with the Liberty Dollar, the architect intended them to compete with Federal Reserve bank notes. They currency takes many forms:

  • Specie in the form of silver and gold coins,
  • Bank notes backed by gold and silver in their vaults (in other words every bank note promising redepmption by an oz worth of silver has an oz of silver sitting in their vaults)
  • Electronic or digital money, again backed by specie in their vaults

Each bank note and coin was stamped with a suggested exchange rate with U.S. dollars. This exchange rate was far higher than the value of the metal in the coins, $15.00 USD worth of silver in a coin stamped with a $20.00 exchange rate. The company bent over backward to get treasury department approval and to comply with U.S. currency laws.

So why were they raided? Brian Doherty of reason magazine reports:

I’ve seen a copy of a Nov. 9 seizure warrant on an Asheville, NC, address, not available online, claiming that Liberty Dollars at that address are forefeitable for being connected with money laundering and mail fraud. I have not read the entire 38 page warrant, nor am I 100 percent certain it is connected with the actions in Evansville today, but given that the Indianapolis FBI referred me to the U.S. Attorney in North Carolina, probably so, and that multiple raids were planned or executed re: the liberty dollar.
The warrant explains that the FBI from Aug 2005 to July 2007 were “conducting undercover operations to determine the legality of the American Liberty Dollar currency.” The warrant also notes that von NotHaus sold an undercover agent a Liberty Dollar T-shirt, and that the agent observed von NotHaus driving a 1999 Cadillac Deville. It doesn’t take a trained federal agent to connect the dots here, I suppose. In other words: What-th-what-th-What?

This came after the U.S. Mint made dark warnings that people doing business in this currency were breaking the law.

Furthermore, NORFED is not the first currency backer to be so attacked. Last December, e-gold was also raided, by agents claiming to be going after money launderers.

Is this some plot to shore up the shaky Federal Reserve system by outlawing competition? I don’t think so, namely because government economists all believe that their system is a good stable one. I truly think they believe their propaganda.

The problem is that a system of commodity currency allows someone to do business anonymously. These systems were consciously designed to preserve people’s wealth from the depradations of misguided governmental monetary policy. This protection inherently makes monitoring the flow of money more difficult for government officials. It attracts people who distrust the government, a significant number of which whose fear is based on the victimful crimes they commit. This institutional distrust, in turn, engenders a hostility in modern law-enforcement who are understandably suspicious of people who distrust them.

In the end, it is quite clear to me that it is the hostility of these law-enforcement officers which is the problem. Confusing suspicion of the state with criminal intent, they are convinced that these institutions that have criminals as customers are in fact conspiring with the criminals. So they shut them down, ruining the guilty and the innocent indiscriminately. There is nothing precluding the FBI from reviewing e-gold or Norfed’s records while the firms continue to do business. Shutting them down is as absurd as shutting down the Motel 6 down the road, because it was the preferred resting place of mobsters visiting town.

Neither Norfed nor E-gold are defrauding anyone. Their fees might be a little high, but everyone doing business with them knows what the costs are going to be up-front. The reason that they are being raided and attacked is, in the end, a political one, hostility amongst law enforcement, perhaps egged on by some of the more conventional financial institutions seeking to knee-cap competition. As such, these raids should be condemned.

Update:

Ron Paul Radio interviews von NotHaus, who claims that the FBI agent in charge told him that the Department of Justice ordered the confiscation of all assets because the currency was illegal:

http://www.ebacherville.com/cgi-bin/uploaded/FINAL-LibertyDollarNotHaus11152007.mp3

Update II:

The search & seizure warrant have been posted by NORFED:

The search warrant orders the seizure of all records, all printing equipment, computer hardware and media, devices used to manufacture the coinage and notes, and somewhat sinisterly membershiplists of all Liberty Dollar Regional Currency Officers, Liberty Dollar Associates, Merchants who have registered themselves as accepting Liberty Dollars, and any individuals that have purchased the currency.

The seizure warrant states that

American Liberty Dollar and/or Hawaii Dala currency and/or percious metals of gold, silver, copper , platinum or other substance and Unites States currency are forfeitabls to the United States under 18 USC  §  982 (a)(1) because it is property involved in, or traceable to, money laundering, in violation of 18 U.S.C. § 1956 and 1957; under 18 U.S.C. USC  §  982 (a)(3) because it is, or is traceable to, gross receipts and proceeds obtained, directly and indirectly, as a result of mail fraud, in violation of 18 U.S.C. § 1341 and wire fraud, in violation of 18 U.S.C. § 1343. Authority for this warrant is provided by 18 U.S.C. § 981(b) and 21 U.S.C. § 853(f)

This is very interesting:

18 U.S.C. §  981(b) states:

       (b)(1) Except as provided in section 985, any property subject to
forfeiture to the United States under subsection (a) may be seized
by the Attorney General and, in the case of property involved in a
violation investigated by the Secretary of the Treasury or the
United States Postal Service, the property may also be seized by
the Secretary of the Treasury or the Postal Service, respectively.
(2) Seizures pursuant to this section shall be made pursuant to a
warrant obtained in the same manner as provided for a search
warrant under the Federal Rules of Criminal Procedure, except that
a seizure may be made without a warrant if –

        (A) a complaint for forfeiture has been filed in the United
States district court and the court issued an arrest warrant in
rem pursuant to the Supplemental Rules for Certain Admiralty and
Maritime Claims;
(B) there is probable cause to believe that the property is
subject to forfeiture and –

          (i) the seizure is made pursuant to a lawful arrest or
search; or
(ii) another exception to the Fourth Amendment warrant
requirement would apply; or

(C) the property was lawfully seized by a State or local law
enforcement agency and transferred to a Federal agency.

(3) Notwithstanding the provisions of rule 41(a) of the Federal
Rules of Criminal Procedure, a seizure warrant may be issued
pursuant to this subsection by a judicial officer in any district
in which a forfeiture action against the property may be filed
under section 1355(b) of title 28, and may be executed in any
district in which the property is found, or transmitted to the
central authority of any foreign state for service in accordance
with any treaty or other international agreement. Any motion for
the return of property seized under this section shall be filed in
the district court in which the seizure warrant was issued or in
the district court for the district in which the property was
seized.
(4)(A) If any person is arrested or charged in a foreign country

    in connection with an offense that would give rise to the
forfeiture of property in the United States under this section or
under the Controlled Substances Act, the Attorney General may apply
to any Federal judge or magistrate judge in the district in which
the property is located for an ex parte order restraining the
property subject to forfeiture for not more than 30 days, except
that the time may be extended for good cause shown at a hearing
conducted in the manner provided in rule 43(e) of the Federal Rules
of Civil Procedure.
(B) The application for the restraining order shall set forth the
nature and circumstances of the foreign charges and the basis for
belief that the person arrested or charged has property in the
United States that would be subject to forfeiture, and shall
contain a statement that the restraining order is needed to
preserve the availability of property for such time as is necessary
to receive evidence from the foreign country or elsewhere in
support of probable cause for the seizure of the property under
this subsection.

Now, what is interesting is that there is supposed to be a hearing, wherein a person can hear the claim and attempt to rebut it, unless:

(3) A temporary restraining order under this subsection may be entered upon application of the United States without notice or opportunity for a hearing when a complaint has not yet been filed with respect to the property, if the United States demonstrates
that there is probable cause to believe that the property with respect to which the order is sought is subject to civil forfeiture and that provision of notice will jeopardize the availability of the property for forfeiture. Such a temporary order shall expire not more than 10 days after the date on which it is entered, unless extended for good cause shown or unless the party against whom it is entered consents to an extension for a longer period. A hearing requested concerning an order entered under this paragraph shall be held at the earliest possible time and prior to the expiration of the temporary order.

while  21 U.S.C. § 853(f) permits seizure of property without a trial:

 (f) Warrant of seizure

The Government may request the issuance of a warrant authorizing
the seizure of property subject to forfeiture under this section in
the same manner as provided for a search warrant. If the court
determines that there is probable cause to believe that the
property to be seized would, in the event of conviction, be subject
to forfeiture and that an order under subsection (e) of this
section may not be sufficient to assure the availability of the
property for forfeiture, the court shall issue a warrant
authorizing the seizure of such property.

There’s only one problem – the law is one that pertains to Food and Drugs.  Obviously, NORFED is not involved in drug trafficking.

I am not a lawyer, so I could be wrong, but I seem to remember that the forfeiture process under the FDA statutes is far less burdensome to the state, and the odds are more heavily stacked against the defendant.  Is the Federal Governemnt violating its own rules by seizing property that falls under the money-laundering statutes using the process for narcotics related seizures? Doug?

It also seems to me that von NotHaus is giving some very bad legal advice.  A class action lawsuit will go nowhere – becasue the claimants will have no standing.

The laws for money-laundering related seizures permit “innocent owners” to file claims with the government.  If they jump through the right hoops, they may get their property back.  The courts will reject any class action lawsuit and instead require people to prove their claims through the regular channels.

More worryingly, the law for narcotics related seizures has no provision for innocent owners, at least that I could find.

Furthermore, the narcotics statute has this littlegem:

(k) Bar on intervention
Except as provided in subsection (n) of this section, no party
claiming an interest in property subject to forfeiture under this
section may –
(1) intervene in a trial or appeal of a criminal case involving
the forfeiture of such property under this section; or
(2) commence an action at law or equity against the United
States concerning the validity of his alleged interest in the
property subsequent to the filing of an indictment or information
alleging that the property is subject to forfeiture under this
section.

Basically, the people who own liberty dollar notes will have to petition the government for redemption of the silver, prove that they did not break the law, to have any hope of getting their money back.

The suit will be costly in time and money, and unless you are sitting on a huge pile of NORFED notes not worth your time.

I think NORFED has just been killed.  Even if the seizure is eventually found to have been unjustified under the law, and the staff be found innocent of any wrongdoing, NORFED is out of business.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.