Rare gold coins won't be returned to Phila. jeweler's family, jury decides

Ten rare $20 gold pieces that would be worth millions to coin collectors instead will remain in Fort Knox and not be returned to the descendents of a Philadelphia jeweler, a federal court jury decided Wednesday.

After five hours of deliberation following a seven-day trial, the two men and eight women declared that when the valuable Double Eagle coins ended up in the hands of Philadelphia jeweler Israel Switt in the 1930s, they did not arrive legitimately.

All 445,500 coins produced in 1933 were supposed to have been destroyed by 1937, and any that escaped being melted into bullion had been stolen, said the government.

"It sends a strong message" that the government will pursue crimes against the U.S. money supply, "no matter how many years pass," Assistant U.S. Attorney Jacqueline Romero said after the verdict.

During closing arguments Tuesday, Romero said that Switt and some of his friends stole 1933 Double Eagles from the Philadelphia Mint. The coins are now in Fort Knox, Ky.

Barry H. Berke, the attorney for Switt's daughter, Joan Langbord, and her two sons, Roy and David, declined to comment after the verdict. Appeals are expected. Roy Langbord shook a reporter's hand but also declined to comment. His mother was not in the courtroom.

On Tuesday, Joan Langbord, 81, said she had no idea how her father had obtained the 1933 Double Eagle coins she found in a safe deposit box 13 years after his death in 1990. A 1933 Double Eagle, traced back to Switt, was sold in 2002 for $7.59 million, a record for any coin.

The family contended they were legally entitled to the coins because the government could not prove they were stolen. Indeed, there was no way to know how they got out of the Mint and eventually into the Switt family's safety deposit box, said the family.

But Romero contended the circumstantial evidence proved otherwise.

The Mint never legally issued any 1933 Double Eagles to the public, and all 445,500 were accounted for in mint records, Romero said. But since 1937, at least 21 have surfaced, and all can be traced back to Switt, who Romero said got them that year from a corrupt Mint official.

Berke argued that the coins could have been legally obtained during a "window of opportunity" in March and April 1933, when the law governing possession of gold coins was in flux.

Before the jury, Langbord explained that she had inherited the safety deposit box from her mother and had never fully sorted its contents. Langbord said she only occasionally opened it to remove a piece of her mother's jewelry for sale at I. Switt, the Jewelers Row store founded by her father and still in operation.

In 2003, Langbord said she was digging through the box and found the coins wrapped in a John Wanamaker bag and pushed into a corner.

Prosecutors scoffed at that account, and noted the family approached the government only after the record sale. "We did not think that was a credible story," Romero said after the verdict.

In 2004 the family offered to open negotiations with the government to decide ownership, but instead the U.S. Treasury sized the coins, setting in motion the court battle.

Romero worked on the civil case for five years, and prosecuted it in court with Assistant U.S. Attorney Nancy Rue. Months were spent digging thorough government archives for old records and studying 1930s American monetary policy to determine the rules for disbursing gold coins, Romero said.

"Intellectually, it was amazing. You had to learn coining processes . . . and how the Philadelphia Mint worked in the 1930s," she said.

U.S. District Judge Legrome D. Davis said that it was one of the oldest cases ever before him - it was filed in 2006 - and that he has at least one final hearing.

Along with seeking forfeiture, the government filed a motion for a declaratory judgment that the coins are its property. That hearing is expected this year.

In the 1940s, Switt was investigated by the Secret Service, which seized nine Double Eagles that he had sold to coin dealers after 1937. Switt said he had no recollection of how he had gotten those coins, and swore under oath that he had no others.

His daughter testified that while she had worked in her father's store from age 9, she had not been involved in purchasing goods and had never known he had the coins.