Asheville resident William Kevin Innes, regional currency officer for Liberty Services, was arrested June 2 on charges of trying to pass off the privately minted Liberty Dollars as U.S. currency. The arrest came as part of a nationwide sweep of the organization’s officials.
A June 3 U.S. Justice Department announcement alleges that Innes, Liberty Dollar founder Bernard von NotHaus and two other employees—Fulfillment Manager Sarah Bledsoe and Chief Operating Officer Rachelle Moseley—were engaged in a conspiracy to pass off their products as legal tender.
The indictment also alleges that Liberty Services seeks to put its coins and notes into circulation in competition with U.S. currency. Liberty Dollars are backed by gold and silver, and the company encourages businesses to accept them. The indictment further charges Innes and NotHaus with mail fraud. If convicted on all counts, Innes could face up to 45 years in prison.
“When groups seek to undermine the U.S. currency system, the government is compelled to act. These coins are not government-produced coinage, yet purchasers were led to believe by those who made and sold them that they should be spent like U.S. Federal Reserve Notes,” Acting U.S. Attorney Edward Ryan declares in the announcement. “Such claims are in violation of federal law.”
According to the indictment, Liberty Services violated the law by designing coins and bills that resemble official U.S. currency (the indictment cites the use of the head of Lady Liberty and a torch on both) and by encouraging private merchants to make change with Liberty Dollars in $5, $10, $20 and $50 denominations.
This isn’t the first time Innes and the Liberty Dollar have faced federal heat. He was named in the affidavit for a 2007 federal raid on Liberty Services’ Evansville, Ind., headquarters, and the order for that raid originated in Asheville. That affidavit also named the Asheville area as one of top centers for Liberty Dollar distribution in the country.
In the aftermath of that raid, Innes asserted that he’d never said the Liberty Dollar was legal tender and had asked local police for assurances that his organization’s activities were within the law.
“If we’re criminals, why were we going to the police and being out in the open?” Innes said at the time.
According to the Liberty Dollar Web site, 74 Asheville businesses have accepted the private currency.
Nonetheless, its legal status seems murky, even among federal agencies. A 2006 statement by the U.S. Mint said that using Liberty Dollars in place of standard currency would be criminal. But that same year, a Treasury Department official told the media that merchants were free to accept them if they wished.
Private currencies (such as in particular towns or resorts) are not unheard of and haven’t generally faced legal challenges. What sets the Liberty Dollar apart is its nationwide reach and backing by precious metals.
The forfeiture order in the June 3 indictment specifies “all property involved in the violations,” noting that federal authorities have already seized thousands of ounces of silver and copper coins, silver scrap and $250,000 in U.S. currency. It’s unclear whether all Liberty Dollars in circulation—some $20 million worth, according to the indictment—will eventually be seized.