Court: Rare coins belong to jeweler's family

A fortune in 1930s gold coins seized by the federal government from the family of a deceased Philadelphia jeweler must be returned, a federal appeals court said Friday.

For more than a decade, the U.S. Treasury Department insisted, and persuaded a jury, that the rare coins had been stolen and belonged to the government.

But on Friday it lost the argument and the coins - because of paperwork.

The U.S. Court of Appeals for the Third Circuit said the government had failed to file a timely forfeiture action, and therefore had waived its right to keep 10 rare 1933 $20 double eagle gold coins. How valuable were they? One similar coin was auctioned for $7.6 million in 2002.

"The government's delay was not minor," wrote Judge Marjorie O. Rendell, who was joined in her opinion by Chief Judge Theodore McKee.

Following the appeals court decision, the U.S. Attorney's Office in Philadelphia, representing the Treasury Department, said it had not decided whether it will appeal.

A total of 455,500 double eagle coins were minted in Philadelphia in the 1930s, but were ordered melted down and converted to gold bullion as part of President Franklin D. Roosevelt's plan to shore up the nation's banking and currency system.

A small number of the coins ended up in the possession of a Philadelphia jeweler, Israel Switt. His daughter, Joan Langbord, found the coins in a safe-deposit box of Switt's in 2004, and took them to the Treasury Department to authenticate them. Officials claimed the coins were government property and kept them.

Langbord and her sons, Roy and David, sued. In 2011, a jury agreed with Justice Department lawyers who argued that Switt had stolen the coins with the help of a corrupt Mint employee.

Friday's decision overturned that verdict.

"The Langbords are thrilled to receive their property back after fighting to vindicate their rights for over a decade," said the family's lawyer, Barry Berke.

The Secret Service investigated Switt in the 1940s after it seized nine double eagles that he had sold to coin dealers. The government suspected that he had conspired with a Mint employee to steal the coins, but the scheme was never proven. Switt said he had no recollection of how he got the coins.

One of the coins traced to Switt was sold to King Farouk of Egypt in 1944. It was purchased by an English coin dealer named Stephen Fenton in 1995 for about $200,000, but the Secret Service seized the coin when Fenton tried to sell it in New York. After Fenton sued, the sides settled and agreed to auction the coin, which fetched $7.6 million.

Shortly after the Fenton coin sold, Joan Langbord said, she found the double eagle coins in the safe deposit box.

The Langbord family, according to the Third Circuit opinion, sought an arrangement similar to Fenton's, but the government refused.

Justice Department lawyers said at the time that there was no need to seize the coins through a civil forfeiture proceeding because they always had been government property. That decision meant that they missed the filing deadline for such actions and the chance to keep the coins.