Feds Seek $7M in Privately Made Silver 'Liberty Dollars'

Source: Associated Press, Tom Breen (4/4/11)

"Legal skirmish finds resonance, as about a dozen states have legislation allowing them to produce their own currency backed by gold or silver."

Federal prosecutors on Monday tried to take a hoard of silver "Liberty Dollars" worth about $7M that authorities say was invented by an Indiana man to compete with U.S. currency.

Bernard von NotHaus, 67, was convicted last month in federal court in Statesville on conspiracy and counterfeiting charges for making and selling the currency, which he promoted as inflation-proof competition for the U.S. dollar.

His Charlotte-based lawyer, Aaron Michel, is appealing that verdict. He wrote in a motion filed Thursday that von NotHaus did nothing wrong because he didn't try to pass the Liberty Dollars off as U.S. dollars.

The case involves more than five tons of Liberty Dollars and precious metals seized from a warehouse, which the government wants to take by forfeiture.

Von NotHaus began issuing Liberty Dollars in 1998, as head of the Evansville, Ind.-based National Organization for the Repeal of the Federal Reserve and Internal Revenue Code.

Federal prosecutors successfully argued that von NotHaus was, in fact, trying to pass off the silver coins as U.S. currency. The Liberty Dollars featured a dollar sign, the word "dollar."

Von NotHaus has argued it's not illegal to create currency to privately trade goods and services. Michel's motion argues the Liberty Dollars were meant to help keep currency in local communities by creating networks of merchants and consumers.

Numerous U.S. cities and regions have experimented with local currency, but laws restrict them from resembling U.S. bills.

The concerns raised by von NotHaus are finding resonance among state lawmakers. About a dozen states have legislation that would allow them to produce their own currency backed by gold or silver in the event of hyperinflation. North and South Carolina are among those states.

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