Von Nutball essentially walks, as least for now

[.]

Although Bernie and his Liberty Dollar scam have largely fallen off the radar since his conviction 3 years ago, he has apparently been sentenced to 6 months of home detention concurrent with 3 years of probation.

http://www.nysun.com/editorials/beyond- ... aus/88958/

The feds wanted 14-17 years, they got squat. Also read elsewhere that the asset forfeiture (7 million in '11) was denied, so his marks "customers" will be happy about that. Shouldn't take more than a decade or two to shake it loose, right?

According to the judge, Bernie is a philosopher. He's 70, so maybe it's time to retire as a monetary architect and pursue his role as a monetary philosopher before he gets his sorry butt into any more trouble.

Then again, the prosecutors have to be in a state of disbelief. They may successfully appeal the sentence as it totally deviates from anything remotely close to the guidelines. I'll guess that they will. And they will probably win.

If they don't, maybe they need to reconsider how they prosecute things like this. Money laundering might have been a better avenue. Not to mention fraud in how the whole scam was designed. Oh, sorry, I meant "architected."

[fortinbras]

BVNH is not merely a harmless eccentric. His scheme replicated a major league money laundering gimmick of a quarter-century ago and added some bells and whistles. Since he started up (circa 1995), some other folks (including purported Indian tribes) have started issuing their own "pure" specie coinage and someone even started up an outfit that supposedly all these coiners are expected to belong to. A sort of mating call for con-men.

One of the first features of BVNH's scheme was paper money - very pretty paper money, multicolor, really artistic. But not exactly money; actually a "warehouse receipt" and it said as much in the fine print. You might pay for his silver or gold 'coin' but you wouldn't get it straightaway; you'd get this paper money telling you your coin was in BVNH's warehouse and this was the receipt and whoever had the receipt could - if done within 20 years! - send in the paper money - and some real (FRN) money for s&h - and then be sent the coin. This meant that the pretty paper money could, in theory, be spent, passed hand to hand, like real money. As far as BVNH was concerned, his coin was priced, at first, at something like 1½ times the current bullion price for the metal, and then the storage/insurance/shipping charges that he's slap on the presentation of the paper money would effectively raise the price of his 'coin' to twice its metallic value - pure gravy for him.

But, while the silver/gold coin was in BVNH's warehouse, his customer, who very likely shared none of the advertised hostility to the Federal Reserve, had hidden his money very effectively from the eyes of the IRS, ex-wives, and other creditors. He had pretty paper money with, legally, zero monetary value, and his creditors had no way of ferreting out his hidden stash in the BVNH warehouse. This was money laundering and a warehouse bank, two crimes but try to prove that they were even committed. About a decade earlier the National Barter Association had gotten involved in such a warehouse bank; depositors were assured that no papers were kept around that could identify them, the manager would keep their account numbers and secret decoder names a deep secret, etc., and the depositors would send in cash and then from time to time instructions to send a money order to this or that vendor, for which some viggorish was charged, and ex-wives and neglected children could starve in the cold. The account holders weren't necessarily great believers in the barter system; they simply want to hide their FRNs and the vig charged by the bank manager for various transactions was, to them, a reasonable price for swissbank-type secrecy. But then the warehouse bank's manager did something very inconsiderate and unexpected -- he dropped dead. And he had been telling the truth - he destroyed all the papers as soon as they arrived, there were any ledgers or notebooks or anything anyone could find that would explain who had an account or for how much. Even the IRS couldn't make sense of what they found -- but the IRS did keep track of the return addresses of the mounting mail as clientele sent more instructions or expressed concern that their recent instructions hadn't been acknowledged. It turned out the manager kept all the money in one enormous lump in a regular bank safety deposit box under his own name. When the dust settled, the contents of the box went to the manager's widow - and was promptly taxed. So, instead of keeping their money from their ex-wives, the depositors kept it from themselves, ultimately. Anyway, this was the business model for much of BVNH's operation.

Then there is the question of valuation of BVNH's coinage - and all those other "pure" gold/silver coiners that have popped up - they price their one ounce coins at prices usually several dollars above the one ounce gold or silver Eagles (US Mint) or Mapleleafs (Canada). Maybe the unofficial coins look prettier or offer more variety. But United State federal law GUARANTEES that the gold or silver Eagles are gonna be one full troy ounce of pure silver or gold, no fooling, and Canadian law guarantees exactly the same for the gold or silver Mapleleafs, and the two governments actually have agencies that make good on that. But there isn't anything like that for the unofficial coins. If BVNH's Liberty Dollars became terribly popular, I'm willing to bet that someone will try counterfeiting them, stamping fake Liberty Dollars out of inferior metal; no real assurance that BVNH et al were telling the truth themselves, and no assurance that (even if they were) the coin in front of us actually came from them. Yet when someone buys a stick of gum with a Liberty Dollar he expected to get change in Real Money - FRNs and US Mint coins. I don't think that everyone (or anyone) will take the dollar value stamped on the BVNH coin at face value. My expectation, sooner or later, is a merchant is going to say "I don't think this silvery funny money is really worth $20 US [and it won't be -- today's spot price for one ounce silver bullion is a bit under $17]. I'm not sure of its weight or purity and it's either expensive or too much trouble for me to test it, so I'll only allow you $15 for it." Very quickly, someone who sent BVNH $20 in FRNs for something worth less than $17 has lost even more; he'll never (in a reasonable number of years) make a profit over what he paid BVNH.

[Famspear]

OK, OK, so von NotHaus walks for now. But, since it's home detention, he walks only as far as it is to his mail box.

[The Observer]

But, since it's home detention, he walks only as far as it is to his mail box.

Yeah, but that means he could mail out that screwball newsletter of his...

[Number Six]

I haven't been following this that closely, but was thinking that the Feds. could have returned the money to those duped as they have done with other Ponzis. Who gets the loot in the current legal decision?

[fortinbras]

One of the difficulties is that the customers weren't necessary dupes; they may have been coconspirators in concealing their assets and laundering their money. It's not clear if BVNH's records are clear on the true identities of his various customers.

[Pottapaug1938]

They begged me not to type it... but it just came to me, and I couldn't stop:

A Dollarhead went out to walk, one cloudy, windy day
Upon a bench he rested ‘fore he went upon his way
When in the sky some ghosts appeared, in image bright and bold
A-running at the Devil, with his bag of Liberty gold.

Their breath was raw and ragged and their gaze was hard as steel
Their hands were wide and grasping , with a passion he could feel
A bolt of fear shot through him as they thundered ‘cross the sky
‘Cause he saw their frenzied faces, and he heard their desperate cry.

Specie-i-ay ! Specie-i-oh!
Ghost Dollars In The Sky

Their eyes bugged out, their faces flushed, their shirts all soaked with sweat
They‘re still tryin’ to get the Devil’s gold; but they ain’t got it yet
And they’ll chase those Liberty Dollars forever ‘cross the sky
On feet a-spoutin’ fire. Once again, he heard their cry.

Specie-i-ay ! Specie-i-oh!
Ghost Dollars In The Sky

As the Dollarhead ghosts ran on by, he heard one call his name
“if you want to live your life without a blot of shame
Then change your ways today, or with us you’ll eternally run
A-tryin’ to get that Devil’s gold, into the setting sun.”

Specie-i-ay ! Specie-i-oh!
Ghost Dollars In The Sky

[Famspear]

They begged me not to type it... but it just came to me, and I couldn't stop:

A Dollarhead went out to walk, one cloudy, windy day
Upon a bench he rested ‘fore he went upon his way
When in the sky some ghosts appeared, in image bright and bold
A-running at the Devil, with his bag of Liberty gold.

Their breath was raw and ragged and their gaze was hard as steel
Their hands were wide and grasping , with a passion he could feel
A bolt of fear shot through him as they thundered ‘cross the sky
‘Cause he saw their frenzied faces, and he heard their desperate cry.

Specie-i-ay ! Specie-i-oh!
Ghost Dollars In The Sky

Their eyes bugged out, their faces flushed, their shirts all soaked with sweat
They‘re still tryin’ to get the Devil’s gold; but they ain’t got it yet
And they’ll chase those Liberty Dollars forever ‘cross the sky
On feet a-spoutin’ fire. Once again, he heard their cry.

Specie-i-ay ! Specie-i-oh!
Ghost Dollars In The Sky

As the Dollarhead ghosts ran on by, he heard one call his name
“if you want to live your life without a blot of shame
Then change your ways today, or with us you’ll eternally run
A-tryin’ to get that Devil’s gold, into the setting sun.”

Specie-i-ay ! Specie-i-oh!
Ghost Dollars In The Sky

I love this forum!

[The Observer]

Yes, definitely one of Pottapaug's better efforts.

[Number Six]

One of the difficulties is that the customers weren't necessary dupes; they may have been coconspirators in concealing their assets and laundering their money. It's not clear if BVNH's records are clear on the true identities of his various customers.

Those who were backing his scam by turning their federal reserve notes into "liberty dollars" (sic) were just wasting their money IMO. If we had a dozen examples of similar scams that fit similar criteria, how did the government effectively deal with them in the past?

I would think a logical solution by government would be to ascertain the amount of money sent to the lib. dollar scam, see how much in the way of assets exist after liquidation, return the loot to the participants and then look to see what federal charges should be taken against those who were part of this scam. Structuring, money laundering, tax fraud and evasion could then be pursued by state and federal authorities. Seizure laws make sense when you have real criminal activity and organized crime.

[notorial dissent]

I'm wondering if von Nutburger's records were good enough that they could identify who owned what. Throughout all this I've yet to hear anything that indicates his record keeping was anything but what you would expect. Which would make it difficult for claimants.

[Number Six]

The burden of proof would be on the claimant. Personally I could substantiate virtually any transaction and I deal with a lot of "cash only" coin dealers. Tracking information, forensic audits, bank records where a certain amount of money was taken out and used to buy a money order, signed affidavits by parties involved. If I had $100K tied up in this fiasco, I really wouldn't care about accusations of tax fraud or money laundering which can be answered by legal counsel. I would just substantiate all the money sent to him. And then the Feds. could lean heavily on Bernard and if he lies like a rug when a bunch of customers are claiming he has their money, they hit him with perjury and lying to a federal agent. It wasn't insider trading that earned Ms. Stewart a sentence, but the lying to the FBI. But this train wreck has been going on so long, I would think the authorities would want to move on to the next frauds.

[notorial dissent]

I suspect you are probably quite right about a good deal of this, and I have no doubt about how you'd handle it. I just have a feeling that a number of von Nutburger's customers were higher than he was and probably didn't keep very good, if any, records, and I have a strong suspicion that a good number of them don't want to identify themselves for very good reasons. So that kind of cuts the response pool down. I don't remember ever seeing anything definitive from the gov't about what they were going to do with the assets to be honest. Something about which I've remained curious. I am still of the opinion that a great number of them were either hiding assets, or money laundering. I don't know if we'll ever really know for sure.

[fortinbras]

Those who were backing his scam by turning their federal reserve notes into "liberty dollars" (sic) were just wasting their money IMO.

For at least some of the people involved, they did not feel the money was wasted. They sent real money to BVNH and got pretty "warehouse receipts" for his silver funny money - with the proviso that customers could turn the funny money back into FRNs if they paid a bit of viggorish for the transaction (ostensibly the warehouse and handling fees). People who had sent him real money had effectively made it invisible to ex-wives, creditors, etc. Every now and then they might send back a pretty receipt with some real money and instructions to send them or someone they were dealing with a real money order payable in real money. In that way they had a sort of checking account. It did cost something for each check - but these were people primarily interested in concealing their assets and they felt that BVNH's viggorish was a tolerable cost of getting swiss bank type secrecy. This is typical of warehouse banks. I am not sure how the govt manages to find them and undo them, but it is criminal enterprise.

[Number Six]

If those who bought into this scheme had just stored their cash somewhere safe, they wouldn't have lost transaction fees. Or in the classic run-up in the precious metals, while buyers of "Libbies" were putting themselves at whopping risks with little precious metal increase benefit, the sharp precious metal buyers were able to get out of them at the right time also getting cash. Precious metals dealer writes check, payee cashes at bank. That way they get maximum dealer money. While the "Libbies" customers could have been disclosed through mail cover operations, the precious metals people elude detection. It would not be that hard to line up checks with IDs given the bank and have those go through a national fraudster clearinghouse. I guess that may be too complicated with much bigger targets.

[fortinbras]

I imagine that the customers of a warehouse bank feel their money is safer there than buried in their backyard or stashed in their mattress or under their wallpaper.
When they instruct the warehouse banker to issue money to them or to someone they want to pay, the banker withdraws the amount (plus vigg) from their account, and buys a money order downtown - maybe at the Post Office, maybe somewhere else - he does not use an indentifiable banking account. He puts the money order in the mail, sometimes with no return address, sometimes with the return address of his client depending on the situation. It's all very cloak and dagger.

[notorial dissent]

Yes, unless or until the warehouse bank turns up crooked, which they all seem to at some point, then money all gone bye.

[Number Six]

Postal money orders have relatively low limits and dealing with a semi-federal agency where workers generally have no compunction about reporting fraud, whereas cash to Bernard would probably be "safer". I know Conklin, one of the tax evasion sleazebags recommended postal money orders. Probably not prone to government triggers unless there are red flags. putting large amounts of FRNs in a safe deposit box is against the law but who reports that? The libby scam struck me as an inefficient, dumb system that no significant coin dealer took seriously. Precious metals dealers have all sorts of compliance issues where once the feds. start digging they are dead in the water: http://www.turnto23.com/news/local-news ... k-deposits

Plus you have all types of laws that could potentially be invoked to indict precious metals and jewelry dealers: http://news.coinupdate.com/irs-and-gove ... lers-0353/

[fortinbras]

If not postal money orders, then cashier's checks or traveler's checks, perhaps multiple small checks in the same envelope. Something other than someone's identifiable bank account. Believe me, it happens.

[Famspear]

Here's a little bit more on the December 5, 2014 sentencing for Bernard vonNotHaus.

First, the counts on which he was convicted:

Count 1: Conspiracy to defraud the United States by making, uttering and passing counterfeit coin, to wit: the Liberty Dollar. 18 USC 371.

Count 2: Falsely making and forging counterfeit coins, to wit: the Liberty Dollar, and aiding and abetting. 18 USC 485 and 18 USC 2.

Count 3: Uttering and making coins of silver intended for use as current money, and aiding and abetting. 18 USC 486 and 18 USC 2.

The original bill of indictment was dismissed on the motion of the United States.

VonNotHaus is on probation for a term of three years on each count, with each to run concurrently.

The condition for mandatory drug testing is suspended based on the court's determination that the defendant poses a low risk of future substance abuse.

And:

The defendant shall serve SIX (6) MONTHS home detention under the rules and provisions for home detention for this district. Defendant is to report today [December 5, 2014], following this hearing to the probation officer here in the courtroom. That defendant be allowed to care for his mother who is 95 years old and in tentative health and in need of defendant’s attention. Home detention is without electronic monitoring.

Assessment: $300
Fine: $0
Restitution: $0

At docket #288, there is a "Statement of Reasons," but as of now it is sealed.

There is a separate order for forfeiture, but the forfeiture covers only some of what the government was requesting. I'm looking at that now.