A federal indictment against Asheville resident William Kevin Innes and other officials from the Liberty Dollar private currency operation alleges that they were trying to compete with — and replace — official U.S. currency while making a profit. Innes faces up to 45 years in jail if convicted on the charges.
Innes was the regional currency officer for LIberty Services, the company that distributes the Liberty Dollar, a private currency backed by precious metals. He is also one of three members of Liberty Services’ executive committee. Also named in the indictment are Liberty Dollar founder Bernard Von NotHaus, company fulfillment manager Sarah Bledsoe and COO Rachelle Moseley.
“It is a violation of the law for private coin systems to compete with the official coinage of the United States,” the document reads.
According to the indictment, Liberty Services, referred to in the indictment by its pre-2007 name, the National Organization for the Repeal of the Federal Reserve and Internal Revenue Codes (NORFED), violated the law by designing currency with similar design to that of official U.S. currency (the indictment cites the use of the head of Lady Liberty and a torch on both) and encouraging private merchants to make change with Liberty Dollars stamped at five, 10, 20 and 50 dollar denominations.
The goal, the indictment alleges, is to provide unknowing customers with “coinage which cannot legally be used as U.S. currency, nor can it be deposited in the U.S. banking system.”
Furthermore, the indictment spells out the organization of Liberty Services, alleging that regional currency officers, Liberty Dollar associates and merchants who accepted the currency made a profit because Liberty Dollars have less than their printed value of precious metals inside, and that the dollar’s proponents used the phrase “making money by making change.”
The indictment cites a 2006 warning by the U.S. Mint that the Liberty Dollars were illegal. However, in the same year, a Treasury Department official told press that merchants were free to accept the coins as they saw fit.
After a federal raid on Liberty Services’ headquarters in 2007, Innes told Xpress that he has never claimed that the Liberty Dollar is official U.S. currency or legal tender and that he was always open with local law enforcement about his activities. Innes also said that to keep the Liberty Dollar operation running, it was necessary to make a profit off their product, and thus have less than the stated value of gold or silver within.
Local or private currencies are not unheard of — in specific towns or resorts, for example — and have not generally faced legal challenges. What differentiates the Liberty Dollar, however, is its nationwide reach and the precious metals in the product. The forfeiture order in the indictment specifies “all property involved in the violations” and notes that federal authorities have already seized thousands of ounces of silver and copper coins, silver scrap and $250,000 in U.S. currency.
It is unclear if the forfeiture will be extended to all Liberty Dollars in circulation (approximately $20 million according to the indictment) or simply to those in the four defendants’ possession. One clause in the order does mention that if property has been passed on to a third party, higher fines will be levied on the defendants.
According to a 2007 affidavit, Asheville is one of the main centers for the Liberty Dollar, and the organization’s Web site has a list of 74 businesses that it claims accepted the currency.
— David Forbes, staff writer
I have a question. If the reports I read are correct and the metal in the Liberty Dollars were not worth the value of the coinage then, politics aside, wouldn’t buying a $20 dollar coin that was worth less than $20 dollars be sort of a silly thing to do?
Not really an answer for your question, just another question.
Is the $20 bill in your pocket worth $20 either?
It could reasonably be argued that a coin with actual intrinsic value, such as the Liberty dollar made with precious metal, is of far greater value than our actual currency which is backed by, um, let’s see…nothing. Kevin and his associates aren’t trying to get rich. They’re trying to bring down the Federal Reserve by circulating private currency which devalues Federal Reserve Notes. Think about what the Fed has done to our currency’s value in the last year. They are the real counterfeiters.
Why does anything have an intrinsic value? Still, If you want to revert to a precious metal backed system why not just use the actual metals instead? Also I would blame devaluing of the dollar on the sub prime mortgage crisis and our huge trade deficit. I don’t think I would blame the fed for the devaluing anymore than I would give them credit for the stronger dollar of the 90’s.
“wouldn’t buying a $20 dollar coin that was worth less than $20 dollars be sort of a silly thing to do?”
It might be a silly thing to do. But what determines the value of a gold or silver coin is the value of the metals on the market plus the minting of the coin. Not the denomination engraved on it. The Liberty Dollars should not have been denominated, in my opinion.
What is truly silly is taking a one dollar Federal Reserve Note to the grocery store and being able to purchase five cents worth of groceries. That is how much value the dollar has lost in 96 years. So you might ask the government, “Where’s my money, bro?”
The loss of the purchasing power of the dollar through currency debasement amounts to a stealth confiscatory theft of your wealth.
It would seem the sillier thing to do to invest in U.S. dollars rather than gold, silver, or gold and silver coinage.
I frankly think that the fraudulent Federal Reserve central bank is more deserving of law enforcement scrutiny than an Asheville precious-metals coin dealer.
Tim, pardon my ignorance, I am familiar with criticisms of the Federal Reserve but I still don’t get it. I have a few questions: Is there enough precious metal to back our economy? How do you cope with an growing economy, do you mine more or do you let regular supply and demand drive the price of precious metals so high that you can no longer manufacture goods containing them? Does inflation occur in an economy that is backed by metal? Also doesn’t the mining of all these metals destroy the environment?
in the early 1970’s when our money was weened off the gold standard permanently, a silver coin could buy four gallons of gas. The same silver measure today can still buy four gallons of gas while the same american dollars cannot. the rates of inflation under fiat monetary systems versus the benefits of commodities backed monetary interests are complicated to say the least. for a much greater understanding please read Ron Paul’s “The Revolution” chapter about monetary policy, any of Austrian economist Ludwig von Mises’ writings, or any commentary by Peter Schiff, owner of Euro-Pacific Capital Inc.
Matt, the price of silver in 1979 was $10 an ounce and could buy 12.5 gallons at $.80 a gallon. Today is about $15 dollars an ounce and with gas at $2.50 thats only 6 gallons. I think you should use a different commodity as gas is pretty volatile (no pun intended). Still, I have heard all the Schiff/Paul arguments before I am still missing something. How do you deal with a growing economy? Perhaps an economy has to be judged by the value of all its assets not just metal, and how do you do that? FYI, I don’t think the Federal Reserve should lay outside the checks and balances system either, but it does have to have some role with private enterprise unless you want the government in complete control of our free market system.
It gets worse in 1966 it was 3.9 gallons of gas for a silver ounce ($1.25 for silver and $.32 for gas). So in 1966 the same silver coin bought even less gas.
I think that this article brings up another really important question. The statement, “It is a violation of the law for private coin systems to compete with the official coinage of the United States,” makes me wonder. Is this really a violation of the law? Why? I remember that the architects of our constitution believed that the creation of money should be separate from the government. I also know that the Federal Reserve, despite its name, is not a government organization, but a privately owned corporation. So, why would it be a violation of the law to compete for services with a private corporation. Is this indictment saying that the Federal Reserve has a legal monopoly on currency fabrication?
Help me out here. I would like to understand whether this is really ‘The Law’ or is this another case of a government organization trying to protect itself by making up laws as necessary?
“I would like to understand whether this is really ‘The Law’ or is this another case of a government organization trying to protect itself by making up laws as necessary?”
The government has instituted laws to create a legal monopoly on money and eliminate competition from alternate currencies. These are called legal tender laws.
The Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled “Legal tender,” states: “United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues.”
You will see this law printed on the paper currency in your wallet.
These laws force people to accept and circulate debased currency resulting from an inflation of the money supply.
A quick web search should provide you with more information about legal tender laws.
You may wish to start here:
Abolish Legal Tender
http://www.thefreemanonline.org/featured/abolish-legal-tender/
upon reading these very thought provoking posts, it occurs to me to set the matter of whether or not using fiat currency rather than currency backed with gold, silver, or other precious metals.
how about considering the question of how America is supposed to economically survive when it continues to amass such a HUGE debt?
whether we use currencies actually backed up or not, endless debt certainly cannot be a good thing for the future economy of America.
growing government, as pretty much every administration has done for decades, is certainly not the answer to the problem… yet it continues.
therefore, the best economically minded next step solutions seem to be:
1. AUDIT the FED… and for that matter, audit every single department of government to see how our tax dollars are being wasted — hopefully, auditing the Federal Reserve will lead to the ending of legal tender laws and allowance of competing currencies, which will ultimately lead to the destruction of fiat currency;
2. CUT GOVERNMENT WASTE — begin by trimming the Federal Government’s tentacles back to its Constitutional limitations, which will reportedly cut the national deficit by 50-66%;
3. END DIRECT APPORTIONED TAXES, most notably the Income Tax, which has been transformed into a wage tax over the past Century. the entire tax system should be minimized and simplified, so as to not interfere with the right to privacy of the individual.
also, i feel moved to point out that regardless of whatever “laws” this government passes, any law which contradicts the natural laws of liberty are oppressive grievances against the individual, and therefore should be resisted by any means available to the citizenry of a country, until such grievances are remedied.
GiveMeLiberty.org