July 21, 2011 -- Ten rare $20 gold coins that could have been worth more than $40 million to a Philadelphia family are the rightful property of the U.S. Treasury, a Philadelphia jury has ruled.
The "Double Eagles"—currently at Fort Knox-- had glistened for years in a safe deposit box belonging to Joan Langbord, 81, the daughter of jeweler Israel Switt, who the government contends illegally obtained the coins in the 1930s.
The coins were among 445,000 Double Eagles made in 1933 when they were worth their face value of $20 each. They have an eagle on one side and a goddess of Liberty on the other side and are made from designs by sculptor Augustus Saint-Gaudens.
In that Depression year, panicked citizens who didn't trust banks were hoarding gold, so President Franklin Roosevelt acted to save the banking system and ordered that gold coins be turned in for cash. He decreed that the newly minted Double Eagles coins should be melted down into gold bullion.
"Those coins were all in a vault and were supposed to be melted. They were never issued," says Jacqueline Romero, assistant U.S. attorney in Philadelphia.
She says that the 10 Double Eagles were stolen property, taken from the U.S. Mint in Philadelphia in the 1930s in an inside job, probably by a crooked cashier.
Rare Double Eagle Coins Were Stolen From Mint, Court Rules
"They didn't go out through the front door," says Romero. "This was clearly a crime. The people of the United States were robbed." The U.S. Secret Service probed the case in the 1940s, she says, and every coin they found in circulation traces back to Switt.
But the criminal case was never prosecuted because the statute of limitations had run out by the time the Secret Service got involved, she says. The government did recover at least nine coins and melted them down.
But somehow, 11 survived — the 10 that were in Langbord's deposit box and one that was the subject of litigation in the late 1990s. It is believed to be the Double Eagle purchased by King Farouk of Egypt in the 1940s.
Because the U.S. government issued an export license for the Farouk coin in the 1940s, it lost the court fight to recover that Double Eagle.
The coin was sold to an anonymous buyer at a Sotheby's auction in 2002 for $7.5 million, the most ever paid for a coin, according to Robert Hoge, curator of North American coins and currency at the American Numismatic Society.
Hoge says that the "very desirable" 10 Double Eagles that were the subject of the Philadelphia case would have fetched millions each at auction. Romero estimated the coins would go for more than $4 million each. Both agree that they would sell for less than the King Farouk coin because had 10 coins come on the market, the rarity of the pieces would be reduced.
"Gold coins are beautiful. Gold as a substance has a lot of interesting and provocative qualities," Hoge says. "People are always struck by the weight and density of gold."
Romero acknowledges that the government case on the coins was totally circumstantial, but says: "The circumstantial evidence was overwhelming that Mr. Switt was involved in the theft."
The Langbord family's lawyer, Barry Berke, argued in court that the coins could have been obtained legally during a window of opportunity in 1933, and that the government was obliged to prove otherwise to win its case.
Nonetheless, the jury found in favor of the government after five hours of deliberation Wednesday. "The jury got it," says Romero.
Family Loses Fight Over Rare Double Eagle Gold Coins
Berke would not comment on the case, and Joan Langbord — who has said she discovered the coins in her safe deposit box in 2003 -- and her two sons are not commenting either. An appeal is likely and may focus on the contentious issue of the admissibility of the Secret Service records from the 1940s probe.
If the government sustains its case, the coins are likely to survive in their present form, says Romero. "I believe that they're going to put them on display for the benefit of the people of the United States," she said. "They're truly national treasures."
In the meantime, Hoge says, coin-lovers can see the "Farouk Double Eagle" at the Federal Reserve Bank in New York, where it is on display in a custom-made, bulletproof case. It was given on loan by the unidentified buyer who paid $7.5 million at Sotheby's.
"We don't know who it is, but we certainly appreciate the thoughtfulness of the buyer," says Hoge. "It's very mysterious."