Von Nuthouse in the big house

[ProfHenryHiggins]

Actually... those "do the drop" instructions could be construed as attempted murder by one segment of the population. If not an full-fledged hate crime.

What if your shopkeeper is a lycanthrope?
You've just, very deliberately, handed him a chunk of what claims to be solid silver. The metal that everyone 'knows' is deadly to lycanthropes, according to American popular culture.

So it could be quite feasible for some Libbie-spender to walk into McDonalds, place his order, and hand the teenage werewolf running the cash register evidence sufficient to call the cops for reasons that have nothing to do with 'Von Nuthouse', yet bring him and his followers even greater grief.

[Thule]

So it could be quite feasible for some Libbie-spender to walk into McDonalds, place his order, and hand the teenage werewolf running the cash register evidence sufficient to call the cops for reasons that have nothing to do with 'Von Nuthouse', yet bring him and his followers even greater grief.

I considered pointing out that Twilight is pure fantasy. But then, so is Von Nuthouse's theories.

[fortinbras]

I can't imagine that it's illegal to print your own currency....

Federal Criminal Code, 18 U.S.C. § 486. Uttering coins of gold, silver or other metal.

Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years or both.

On a different note...what is the reasoning for that little statement on coupons that say "this coupon is worth 1/100 of one cent"?

Primarily as a legal protection against theft or forgery of the coupons (yes, there are instances of people printing up their own copies of some vendor's discount coupons, green stamps, etc.) on the premise that it's a crime because it involves a thing "of value" - even though the value is miniscule.

By the way, I had some history with the LD. When it first was announced, in Media Bypass circa 1995, -- von NotHaus then called his outfit NORFED and it was supposed to bring down both the Federal Reserve System and the IRS -- I did a little checking on von NotHaus and found out that he had run a coin collector shop in Hawaii, called the Royal Hawaiian Mint, with a sideline of stamping out souvenir tokens for various commemorations. He managed to drive the business into the ground so fast that it was shuttered and emptied without bothering to tell the security company that provided the night watchman.

Among his original promotional literature was the Q&A (I quote from memory) "Why are you paying twice the market price for silver? To cover NORFED's research expenses." I peppered von NotHaus with demands that he cite his authority for the claim in his FAQ sheet that the dollar sign has different meanings depending on whether there are one or two vertical lines going through the S. (Answer: No difference, and the earliest handwritten uses of the $ - it originally meant the Spanish silver peso, not the monogram for the United States - show that the same people used one or two vertical strokes indifferently.) He finally conceded and took that Q&A out of his website.

From the very beginning von NotHaus was careful not to call the LD a "coin" - he had been advised that word was reserved for real legal tender - but he made a point that the LD was legal (he didn't mention that the Treasury had been asked if it were legal as a commemorative token) and he used the word "currency", which really was a legal no-no. A couple of years later I ran across 18 USC §486, and I wrote to NORFED's lawyer (not an easy thing, the guy was in Hawaii, had changed addresses almost annually, and had been in trouble with the Hawaiian Bar) and asked him very bluntly about the NORFED LD and §486. Almost immediately NORFED advertising was changed.

Early on, NORFED was issuing was looked like paper money; multicolored with the Statue of Liberty. This was, in fact, a "warehouse receipt" and labelled as such (a common example of same is the pawn ticket). It said that one ounce of pure silver was waiting in a warehouse to whomever tendered the receipt PLUS paid an unspecified charge for shipping, handling, and insurance, and did so within 20 years of the paper's issuance. A little later the NORFED LD made its appearance, looking very nice ... as it should, considering it was stamped out using a mold modified from the Morgan silver dollar of a century earlier. Originally it was $10 when the market price of silver was about $6; when the market price inched up to about $8 the LD (still one ounce) gazumped its price up to $20. So a handful of early purchasers might have made a killing, but the later purchasers - especially those who haven't yet redeemed their warehouse receipts - may want to commit a killing.

Media Bypass magazine promoted the LD like crazy, with half-page display ads in every issue and cover and feature articles in every alternating issue. Then the chickens came home to roost. A lot of Media Bypass readers who had responded to the ads and articles found very few vendors willing to accept LDs so they started paying for their Media Bypass subscriptions with LDs - expecting the LD to be credited at its own face value. Media Bypass announced it was no longer accepting LDs as payment; its excuse was that it wanted to see LDs spread in new directions but almost immediately there was a shake-up and a new manager put in charge of Media Bypass, and the LD ads and articles stopped cold. A year or so later, Media Bypass shut down permanently. Since then von NotHaus has lost momentum and altitude.

[Evil Squirrel Overlord]

I considered pointing out that Twilight is pure fantasy. But then, so is Von Nuthouse's theories.

Ahh, I get it... post-1990 pop culture reference. If anybody wants me I be digging a new pit in the basement... and somebody tell those kids to get off my lawn.

[Pottapaug1938]

I can't imagine that it's illegal to print your own currency....

Federal Criminal Code, 18 U.S.C. § 486. Uttering coins of gold, silver or other metal.

Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years or both.

On pages 205 and 206 of Ted Schwarz's 1976 book "Coins As Living History", there is a story of how, in the first half of the 19th century, in a rural Kentucky community, Jacob and Nancy Sprinkle reacted to the coin shortage of the time (the U.S. Mint didn't have the capacity to mint enough coins for the nation's needs, and due to fluctuations in the price of bullion freshly-minted coins often would up being melted down) by minting their own dollar coins, with an owl on one side and a six-pointed star on the other. The "Sprinkle Dollars" were larger than U,S. dollars and contained more silver; and local merchants grew to prefer Sprinkle dollars if offered a choice between them and other coins. The Sprinkles were prosecuted; but after a hung jury ended the first trial the Sprinkles took off for California and nothing further was done because, essentially, there was little desire to hold a second trial.

[fortinbras]

One of the ongoing cases against Von NotHaus and NORFED/LD is in the federal district court for the Western District of North Carolina,
United States v. 3039.375 Pounds of Copper Coins (WD NC, docket nr. 1:08cv230). Maybe someone can dredge up some of the papers of that case (and the citations for the decisions).

Various procedural decisions have already been issued in this case. Judging from the 8 orders issued in the case that are posted on Google Legal, the case is still pending but already convoluted. It appears that the govt is not merely prosecuting Von NotHaus and NORFED for a variety of counterfeiting, it is trying to obtain a civil forfeiture of 1½ tons of Von NotHaus's copper dollars, since it is illegal to possess (as well as to try to pass) counterfeit money. If the govt succeeds, it means that hundreds, perhaps more than a thousand, people who have their silver and gold stashed in Von NotHaus's vault or awaiting shipment from his warehouse will never see their money again.

In the meantime it appears that a criminal case against Von NotHaus and his associates is pending in another federal court.

[notorial dissent]

Hadn't heard that they were going for civil forfeiture, but really not surprising since he has been making the claims he was all along, and he certainly skated close enough to the brink to have fallen in. He was given the opportunity to clean up his act, and he thumbed his nose at the Treasury people, and I guess someone there took it to heart and began the civil and criminal cases. i feel sorry for the snooks, since as was pointed out, they may very well never see a dime of their money back from his sure fire inflation proof currency.

[Gregg]

Hadn't heard that they were going for civil forfeiture, but really not surprising since he has been making the claims he was all along, and he certainly skated close enough to the brink to have fallen in. He was given the opportunity to clean up his act, and he thumbed his nose at the Treasury people, and I guess someone there took it to heart and began the civil and criminal cases. i feel sorry for the snooks, since as was pointed out, they may very well never see a dime of their money back from his sure fire inflation proof currency.

I never thought he had the gold, but I digress. Some of the snooks in this case may be the kind of people who are paying twice the going rate for metals in order to cloud up the sources of their income. Some of them are just run of the mill tax cheats, but some of them might have a more violent bent about them. Maybe he violated in order to get to a place where he thought he'd be safe.

[fortinbras]

I expect that Von NotHaus's warehouse has a great deal less in precious metal "coins" than the paper "warehouse receipts" he has issued.

This is especially significant because, although Von NotHaus does not openly advertise this, his operation serves as a "warehouse bank". For those few who don't recognize the term, I will explain. A "warehouse bank" operates as a sort of domestic Swiss bank -- various people who wish to keep their money secret and hidden from the IRS/creditors/ex-wives/etc send their money to the warehouse where it is stashed; instead of accumulating interest, they pay a fee for this service. When they must pay out money or withdraw money, they contact the warehouse with instructions and the manager of the bank makes the appropriate accounting entries and buys a real money order which is mailed out. Frequently the warehouse bank does not keep any records of the names & addresses of the account holders, but identifies and verifies them by account numbers and passwords.

This happened about a quarter-century ago with the National Barter Assn. It turned out that one of the NBA's directors was running a warehouse bank of his own, which was quite substantial, and he assured absolute secrecy by destroying all paper records on a monthly basis. But then he very inconsiderately died - and the secret details of all the accounts died with him. It was discovered that he had gathered up the accumulated stash and put it into a regular bank account, in his own name, getting interest. Moreover, he had obtained a mortgage loan based on this bank account. The courts finally decided that the man's family inherited this money, and the IRS moved in. The IRS couldn't figure out who had accounts or how much .... but it did read the incoming mail from people who weren't aware that the warehouse banker was dead and ugly stuff happened.

Von NotHaus's operation similarly worked as a warehouse bank, using his paper funny money as a means of ordering withdrawals - not necessarily in his coins but in the "refund" of the FRNs used to buy the coins (with some viggorish for "storage and handling"). The govt seizure of the NORFED warehouse means all those people have lost their money, but they might have visits from the IRS.

[The Observer]

All of which shows the inherent disadvantage when you decide to go outside the law and try to evade taxes. There are no guarantees out there in warehouse banking, offshore trusts and the like; when you give your money to the promoter, you are actually giving them permission to do anything with your money and there is nothing to compel them to return it to you upon your request. They only do so if they believe there is an advantage for them to keep up the pretense of running a "honest" business, usually as a way to delude others into "investing" as well.

Considering that these scams never submit themselves to outside auditing or government oversight, that they do not have boards or directorships governing operations, that they do not implement standards of accounting, security, and controls to protect that with which they are entrusted, anyone giving money to these people are better off just burning the money nad hoping that they could claim a loss.

[Number Six]

All of which shows the inherent disadvantage when you decide to go outside the law and try to evade taxes. There are no guarantees out there in warehouse banking, offshore trusts and the like; when you give your money to the promoter, you are actually giving them permission to do anything with your money and there is nothing to compel them to return it to you upon your request. They only do so if they believe there is an advantage for them to keep up the pretense of running a "honest" business, usually as a way to delude others into "investing" as well.

Considering that these scams never submit themselves to outside auditing or government oversight, that they do not have boards or directorships governing operations, that they do not implement standards of accounting, security, and controls to protect that with which they are entrusted, anyone giving money to these people are better off just burning the money nad hoping that they could claim a loss.

If even licensed and seasoned accountants and lawyers are well-known to abscond with huge sums of clients money by various ruses, than can you imagine the complex dark thoughts passing through the noggin of an unlicensed, unregulated and essentially ungoverned individual controlling large sums of money? "Hmmm, if I move clients' money to an offshore haven and soon thereafter fly to nether parts, I could enjoy the rest of my days with wine, women and song to boot".

[Brandybuck]

Has actual physical proof ever been seen that he actually has the gold and silver he claims he has. I have long said that if he is a crook, why should he keep masses of gold and silver around, when for the occasional redemption he can buy on the spot market. I would bet a $1 FRN that he has little if any gold and silver.

That would be fractional reserve banking, and as all goldnuts know, that is the source of all Ebil in the world.

[Gregg]

Has actual physical proof ever been seen that he actually has the gold and silver he claims he has. I have long said that if he is a crook, why should he keep masses of gold and silver around, when for the occasional redemption he can buy on the spot market. I would bet a $1 FRN that he has little if any gold and silver.

That would be fractional reserve banking, and as all goldnuts know, that is the source of all Ebil in the world.

That should be easy enough to find out. If they seized it surely there's an inventory somewhere. The real question is how mush is there supposed to be compared to how much there is.

[Gregg]

Found it...

U.S. District Court, Western District of North Carolina (Asheville), CIVIL DOCKET FOR CASE #: 1:08-cv-00230-LHT-DLH

Summary of Seized Goods

* 3039.375 Pounds of Copper Coins; (Commemorating Ron Paul)
* 5930.32 Troy Ounces of Silver Coins;
* 63.24 Troy Ounces of Gold Coins;
* 3 Platinum Coins;
* 168,599 Silver Troy Ounce Coins;
* 147 Gold Troy Ounce Coins;
* 710 Silver .5 Troy Ounce Coins;
* 11 Silver Bars and Silver Scrap Totaling 10,720.60 Troy Ounces;
* 1000.5 Troy Ounces of Silver Coins;
* 1000.5 Troy Ounces of Silver Coins;
* Dies, Molds, Casts;
* 16,000.05 Troy Ounces of Raw Silver;
* 100 Ounces of Copper Coins;
* $254,424.09 in United States Currency;
* 17 Gold .05 Troy Ounce Coins.

I also saw a report that the FBI did in fact check the metal content of one of the Libbies and it was .999 silver, so the metal content is legit, or looks like it anyway.

[Gregg]

Okay, a little math

3039.375 lbs copper $3.35 oz $636.37
5930.32 oz silver $18.34 $108,762.07
63.24 oz gold $1,194.30 $75,527.53
168599 oz silver $18.34 $3,092,105.66
147 oz gold $1,194.30 $175,562.10
710 .5 oz silver $9.17 $6,510.70
10720.6 oz silver $16.00 $171,529.60
1000.5 silver $18.34 $18,349.17
1000.5 oz silver $18.34 $18,349.17
16000.5 oz silver $18.34 $293,449.17
100 oz copper $3.35 $335.00
254424.09 currency $1.00 $254,424.09
17 0.05 gold $1,194.30 $1,015.16

$4,216,555.78

Sorry for the formatting, and it's quick and dirty on the figures, basically NORFED had $4.2 Mil on hand when the FBI showed up. Anyone know how much Benard told everyone he had? I seem to vaguely recall he SAID something somewhere that I had a much bigger number in the back of my head. Something in the $100 million dollar range even....

edit to add, the 3 platinum coins are not included in that, it doesn't say how much they weigh, guessing at an ounce each, add $4800 give or take....

[Gregg]

Mr. von NotHaus said he suspects the raid is in response to "the competition" his currency poses to the U.S. Mint. His Liberty Dollars, whose value is the price of the coin's metal, have proven a better investment in recent years than government issued notes, whose value has plummeted in relation to the price of gold.

Hmm, so he had $20 million claimed in circulation, and he was competing with the Fed, who only had, what, $850 billion give or take?
He had them right where he wanted them until they shut him down...

[.]

More like 1.5 trillion. Currency now in circulation is about 1.7 trillion.

http://www.federalreserve.gov/releases/H6/Current/

[fortinbras]

I strongly doubt that NORFED ever had as much as $4M in either real money or its own drachmas. I have a theory about where Von NotHaus pulled out that number.

[webhick]

I strongly doubt that NORFED ever had as much as $4M in either real money or its own drachmas. I have a theory about where Von NotHaus pulled out that number.

With a number that large, it must have hurt.

[fortinbras]

Von NotHaus is only one of several people now churning out what are supposed to be "coins" of pure silver or gold. But von NotHaus attracted attention because he touted his as an adequate substitute or replacement for the real thing; the other outfits just promote their "tokens" as conveniently sized and shaped investments in precious metals (but still price them at 150% or more of the bullion price). I think all of these outfits promise to refund the purchase price in real money (minus something for s&h) - their viggorish for running tacit warehouse banks. Neither von NotHaus or the others ever tried to sell themselves as warehouse banks but their utility as such is obvious to anyone shifty enough to be looking for a warehouse bank.