A federal jury in Pennsylvania began hearing a tale Thursday that has long fascinated coin collectors: how a Philadelphia family ended up with a stash of exquisitely rare $20 gold coins from 1933 that the U.S. Mint never circulated.
The 10 coins could bring $80 million or more at auction. But it's not clear that day will ever come.
Federal attorneys told the jury in opening statements that the coins belong to the United States because they were never legally released by the U.S. Mint in the 1930s.
But descendants of the late Philadelphia jeweler Israel Switt say the government can't prove they were stolen. Switt, who dealt in scrap gold, might have legally traded for them in his regular dealings with the Mint, their lawyers said.
U.S. District Judge Legrome Davis promised jurors selected for the trial that the case would be more fascinating than anything they see on TV, a case replete with history about the gold standard, the Depression, and decades of sleuthing over the rare 1933 Saint-Gaudens "double eagles." The trial is expected to last two to three weeks.
"The government must prove that these coins were stolen three-quarters of a century ago," lawyer Barry Berke, who represents Switt's daughter and grandsons, told the jury.
"They have a theory as to how the coins may have left," he said. "A theory is not good enough to take a citizen's property."
Nearly a half million of the double eagles were struck in Philadelphia in 1933, but then melted into gold bars when President Franklin D. Roosevelt took the country off the gold standard. A few mysteriously survived.
Switt was twice investigated for illegally possessing gold coins in the 1930s and 1940s. He surrendered many of the coins, but was never prosecuted because the statute of limitations had run out, Assistant U.S. Attorney Jacqueline Romero said.
Switt's daughter, Joan Langbord, contacted the government in 2004 to say she had found the coins in a bank deposit box a year earlier. She asked the Treasury Department to authenticate them. The government instead seized them, but the federal judge later ordered officials to defend the forfeiture at trial. The coins are being kept at Fort Knox.
The government argues that the safety box was not rented until six years after Switt died in 1990. Government lawyers say that 10 other "double eagles" that surfaced in the 20th century can all be traced to Switt. Prosecutors believe Switt and a corrupt cashier at the Mint had a hand in the breach.
"(This is) a crime the government has been waiting to put to rest for 70 years," Romero said in opening statements. "The government simply wants its coins back."
Langbord, now in her 80s, has worked in her father's jewelry store a few blocks from the Mint nearly all her life. The other plaintiffs are her sons, entertainment lawyer Roy Langbord of New York City and David Langbord of Virginia Beach, Va.
A single 1933 double eagle, designed by famed sculptor August Saint-Gaudens, sold at auction in 2002 for $7.59 million, then a record for a coin. The coin had once been owned by King Farouk of Egypt after the U.S. government agreed it could be shipped overseas.
Romero called the 1944 shipment a bureaucratic mistake that prompted the government to allow its later owner, a London coin dealer jailed when he brought it to the U.S. in 1996, to sell it. The dealer and the U.S. government split the proceeds in a deal negotiated by Berke.
The Langbords had opened their deposit box the day before the London dealer's Farouk coin was seized in 1996, Romero said. The family later offered a similar 50-50 split with the U.S. to settle the case, but the government rejected it on grounds the family cannot legitimize their ownership of the coins, given Switt's history.
Switt had told Secret Service agents in 1944 that he had possessed and sold nine 1933 double eagles, despite the ban on owning most gold coins after January 1934. All nine were tracked down by the government and destroyed between 1944 and 1952. The Farouk coin is believed to be the tenth from that stash.
The Mint sent a pair of 1933 double eagles to the Smithsonian Institution for its U.S. coin collection.