Government to Return Most NORFED "Liberty Dollars"
Government to Return Most NORFED "Liberty Dollars"
The remarkable story of alternative currency confiscation, legal battles, and the return of millions in precious metals to rightful owners
Introduction
In 2007, the U.S. government confiscated huge quantities of NORFED "dollars," the brainchild of Bernard von NotHaus. These medallions were distributed among like-minded members of the NORFED network, which stood for National Organization for the Repeal of the Federal Reserve and Internal Revenue Code. Now that von NotHaus has been sentenced to probation and house arrest, much of the seized assets are set to be returned to the people who bought them.
Although Mr. von NotHaus was indicted in 2009 and convicted in 2011, the fate of the remaining "Liberty dollars" has been in question ever since. According to filings in federal courts, nearly 90% of the petitions to have the confiscated medals returned have been approved, totaling millions of dollars in gold, silver, and platinum.
Table of Contents
NORFED and Bernard von NotHaus Background
The National Organization for the Repeal of the Federal Reserve and Internal Revenue Code represented a movement of Americans dissatisfied with the Federal Reserve system. Bernard von NotHaus, the organization's founder, developed the Liberty Dollar program as an alternative to traditional U.S. currency.
NORFED Mission
- Challenge the Federal Reserve monetary system
- Promote alternative currency solutions
- Educate Americans about monetary policy
- Advocate for precious metals-backed currency
Bernard von NotHaus
- Founder and architect of Liberty Dollar program
- Former coin dealer and precious metals advocate
- Monetary reform activist and Federal Reserve critic
- Convicted in 2011, sentenced to probation
Timeline of Events
- 1998: Liberty Dollar program begins
- 2007: Government raids and confiscations
- 2009: von NotHaus indicted
- 2011: Conviction secured
Ideological Foundation
The movement behind NORFED reflected broader concerns about monetary policy, Federal Reserve control, and the desire for currency backed by precious metals. These concerns resonated with many Americans who questioned fiat currency systems and sought alternatives based on gold and silver values. The organization tapped into longstanding American skepticism about central banking and attracted supporters who valued monetary independence and precious metals-backed currency systems.
Von NotHaus positioned himself as a monetary reformer, arguing that Americans should have alternatives to Federal Reserve Notes. His Liberty Dollar program represented an attempt to create a parallel currency system based on precious metals, appealing to those who shared concerns about inflation, monetary policy, and the concentration of financial power in the Federal Reserve system.
What Were NORFED Liberty Dollars?
The idea behind NORFED's program was, at its heart, altruistic: dissatisfied with the Federal Reserve system, von NotHaus sold and distributed his medals of gold, silver, copper, and even platinum as a way for Americans to barter and engage in commerce without using U.S. dollars.
| Metal Type | Denomination | Purpose | Market Function |
|---|---|---|---|
| Silver | $1, $5, $10 | Primary circulation medium | Based on silver content value |
| Gold | $500, $1000 | High-value transactions | Tracked precious metals pricing |
| Copper | $1 | Small transaction facilitation | Base metal alternative |
| Platinum | Various | Premium collector items | Ultra-high value storage |
Design and Manufacturing
NORFED had the pieces struck by the Sunshine Mint, one of the country's leading private mints, which explains the rather sharp detail and high quality of the Liberty dollars. The professional manufacturing gave the medallions credibility and appeal among precious metals enthusiasts.
Negotiable Denominations
The Liberty dollars carried symbolic denominations that were explicitly negotiable between parties. The point was to exchange the coin-like metals based on what another party was willing to offer for them, creating a market-based valuation system.
Symbolic Elements
- "TRUST IN GOD" instead of "IN GOD WE TRUST"
- Lady Liberty figure prominently displayed
- Use of "$" dollar sign for denominations
- American patriotic imagery and themes
Functional Design
- Clear denomination markings
- High-quality mint production standards
- Distinctive but familiar appearance
- Durable precious metals construction
Market Evolution
- Began in 1998 with limited distribution
- Slowly accumulated adoption over time
- Gained more frequent use in communities
- Attracted federal attention as usage spread
Legal Concerns
While the NORFED "dollars" were hardly counterfeits in principle—intended not to mimic legal tender or be passed off as such, but as a separate form of currency altogether—their design elements created legal vulnerabilities. The use of certain numismatic devices made it easy enough for the government to argue that they could be misinterpreted by unknowing consumers to be U.S. legal tender, providing the legal foundation for subsequent government action.
Government Legal Action and Confiscation
As the pieces eventually spread and gained more frequent use, the Federal government took notice and stepped in under the pretext of anti-counterfeiting. The government's case centered on the potential for confusion between Liberty Dollars and official U.S. currency.
Government's Legal Theory
Federal prosecutors argued that the Liberty dollars' design elements—including patriotic imagery, dollar denominations, and Lady Liberty figures—could mislead consumers into believing they were receiving official U.S. currency, constituting counterfeiting under federal law.
| Legal Action | Year | Scope | Impact |
|---|---|---|---|
| Initial Raids | 2007 | NORFED operations and inventory | Massive confiscation of precious metals |
| Federal Indictment | 2009 | Bernard von NotHaus personally | Criminal charges filed |
| Criminal Conviction | 2011 | Guilty verdict secured | Legal precedent established |
| Sentencing | Later | Probation and house arrest | Asset return process began |
Legal Complexity
The case highlighted the complex intersection of currency law, free speech rights, and alternative monetary systems. While NORFED argued their medallions represented legitimate precious metals trading rather than currency counterfeiting, the government successfully argued that the design elements created sufficient potential for confusion to warrant criminal prosecution. This case set important precedents for how alternative currency systems are regulated and prosecuted under federal law.
The government's action effectively shut down the Liberty Dollar program and established clear legal boundaries around alternative currency systems. The prosecution sent a strong message about federal authority over monetary systems while raising questions about the limits of innovation in precious metals trading and alternative exchange systems.
Court Proceedings and Asset Return
The legal proceedings surrounding the Liberty Dollar case extended over many years, with von NotHaus's conviction in 2011 followed by lengthy deliberations over the fate of the confiscated precious metals. The resolution has significant implications for the thousands of people who purchased Liberty dollars.
Asset Return Statistics
- Nearly 90% of return petitions approved
- Millions of dollars in precious metals affected
- Gold, silver, and platinum included
- Thousands of individual claimants
Legal Process
- Individual petition requirements
- Documentation of legitimate purchase
- Federal court review and approval
- Systematic asset distribution
Claimant Rights
- Innocent purchaser protection
- Proof of legitimate acquisition
- Return of actual precious metals
- No criminal liability for buyers
Asset Return Process
According to filings in federal courts, nearly 90% of the petitions to have the confiscated medals returned have been approved, totaling millions of dollars in gold, silver, and platinum. This high approval rate suggests that the courts recognized the legitimate interests of innocent purchasers who bought Liberty dollars as precious metals investments rather than as tools for illegal activity. The return process acknowledges that many buyers were attracted to the precious metals content rather than any illegal currency scheme.
The court's decision to return most of the confiscated assets reflects the principle that innocent purchasers should not be penalized for the illegal actions of the program's organizers. This precedent has important implications for future cases involving alternative currency systems and may influence how authorities handle similar situations involving precious metals and alternative exchange systems.
Collectible Value and Secondary Market
No longer an alternative circulating currency, the pieces clearly hold sentimental and collectible value to go along with their precious metal content, which carries intrinsic value. Even before the announcement that many medallions would be returned, a secondary market was developing for them.
Collectible Appeal Factors
- Historical significance of monetary experiment
- High-quality manufacturing by Sunshine Mint
- Limited quantities due to confiscation
- Variety of designs and commemorative themes
- Precious metals intrinsic value foundation
Design Varieties
Collectors have been drawn to the pieces because of the variety of designs. Some medals paid homage to various core beliefs of NORFED, such as Second Amendment rights on the $2 piece. There was also a design endorsing former Congressman Ron Paul for president in 2008 that appeared across different metallic compositions.
| Value Component | Description | Market Impact |
|---|---|---|
| Precious Metal Content | Intrinsic gold, silver, platinum value | Price floor based on metal markets |
| Historical Significance | Unique monetary experiment documentation | Premium for historical importance |
| Manufacturing Quality | Professional mint production standards | Enhanced aesthetic and durability appeal |
| Limited Availability | Confiscation created artificial scarcity | Collector demand exceeds supply |
| Political Symbolism | Federal Reserve opposition themes | Appeal to monetary reform advocates |
Secondary Market Development
For now, it seems that the NORFED Liberty dollars will live on with exonumia collectors, especially those designs that were produced in limited mintages. The combination of precious metals content, historical significance, and artificial scarcity created by government confiscation has established Liberty dollars as legitimate collectibles. Unlike their original purpose as alternative currency, their value now derives from numismatic interest, historical importance, and the underlying precious metals values that continue to attract investors and collectors alike.
Future Outlook and Legacy
The NORFED Liberty Dollar case represents a significant chapter in American monetary history, establishing important legal precedents while demonstrating both the appeal and the legal limitations of alternative currency systems. The case's resolution provides insights into how similar situations might be handled in the future.
Legal Precedents Established
- Federal authority over currency design
- Counterfeiting law applications
- Alternative currency system boundaries
- Innocent purchaser protections
Market Implications
- Precious metals trading regulations
- Alternative exchange system oversight
- Collectible market development
- Historical artifact value creation
Continuing Interest
- Monetary reform movement inspiration
- Precious metals advocacy
- Educational historical example
- Collector and investor appeal
Lessons for Modern Investors
The Liberty Dollar case offers important lessons for modern precious metals investors. While the legal troubles highlight the risks of alternative currency systems, the government's decision to return most confiscated assets to legitimate purchasers demonstrates that gold and silver investments maintain protection under law when acquired through legitimate channels. The case also illustrates how government actions can inadvertently create collectible markets, as the confiscation and legal proceedings have made Liberty dollars more sought-after than they might have been as simple alternative currency.
Looking forward, the Liberty Dollar experience may influence how future alternative currency projects are designed and marketed. The clear legal boundaries established by this case provide guidance for precious metals dealers, collectors, and investors about what activities may attract government attention and how to structure precious metals transactions to avoid legal complications.
Regulatory Environment
The case demonstrates the importance of understanding the regulatory environment surrounding precious metals and alternative currency systems. While there remains strong legitimate interest in gold and silver as alternatives to fiat currency, any system that mimics official currency design or suggests legal tender status may face similar government action. Modern precious metals investors should focus on clearly identified bullion products and established dealer networks to avoid regulatory complications.
Conclusion
The NORFED Liberty Dollar saga represents a fascinating intersection of monetary policy, precious metals investing, legal boundaries, and American entrepreneurship. From its idealistic origins as an alternative to Federal Reserve Notes through its legal troubles and ultimate resolution, the case provides valuable insights into the challenges and opportunities surrounding alternative currency systems and precious metals investing.
The government's decision to return nearly 90% of the confiscated assets—totaling millions of dollars in gold, silver, and platinum—demonstrates important protections for innocent purchasers while maintaining clear legal boundaries around currency design and alternative monetary systems. This resolution balances law enforcement objectives with fairness to legitimate precious metals investors.
Lasting Impact
The Liberty Dollar case will likely be remembered as both a cautionary tale about the legal limits of alternative currency systems and a testament to the enduring appeal of precious metals-based value storage. While the original vision of widespread alternative currency adoption was curtailed by legal action, the high-quality medallions continue to serve their creators' intent in a different way—as collectible reminders of monetary experiments and stores of precious metals value.
For modern precious metals investors, the Liberty Dollar experience underscores the importance of working with established dealers, understanding regulatory frameworks, and focusing on clearly identified bullion products. While the appeal of alternative monetary systems remains strong among many Americans concerned about Federal Reserve policy and fiat currency, the safest approach for precious metals investing continues to be through traditional channels that provide transparent pricing, legal clarity, and established market acceptance.
The transformation of Liberty dollars from alternative currency to collectible artifacts demonstrates how legal and market forces can reshape the purpose and value of precious metals products. As these medallions find new life in the exonumia collecting community, they serve as tangible reminders of both the possibilities and limitations inherent in attempts to create alternative monetary systems in modern America.