Raid on Ron Paul Dollar Maker
By Simon Constable
TheStreet.com Staff Reporter
11/16/2007 2:49 PM EST
(Click above link to view video)
Secret Service and FBI agents raided the makers of Ron Paul silver dollars, Liberty Dollar of Evansville, Ind., early Thursday in a move likely aimed at stamping out an illegal currency.
The company started selling precious-metal coins stamped with an image of Paul earlier this year, with the first one made of silver available in July. Part of the marketing for the coins involved a promise that part of the sale price would be donated to the Paul campaign.
But if the raid results in the conviction of anyone involved, it is possible that the Paul campaign may have to return a cash donation made by Liberty Dollar.
The silver coins, which weigh one troy ounce, were sold for $25 each, with $5 being promised to help fund Paul's presidential bid. The gimmick fit in well with Paul's campaign promise to bring back the gold standard of monetary policy in which precious metals would back paper dollars.
So far, Liberty Dollar has donated $2,300 to the Paul campaign, a fact confirmed by both Paul's office and Bernard von NotHaus, who runs Liberty Dollar.
As a result of the raid, prices for the silver coins have skyrocketed, with Ron Paul silver dollars, which were available from Liberty Dollar at $25 on Wednesday, selling for $220 on eBay (EBAY) recently.
Coins made of other metals, such as copper, gold and platinum, were also available from Liberty Dollar for a variety of prices. Prior to last summer, the firm had produced generic liberty dollars.
According to von NotHaus, the government move follows his efforts to sue the U.S. Mint, which in September had published warnings that von NotHaus's products were "not legal tender." Von NotHaus says he sued the U.S. Mint for slander after that proclamation.
Speaking hours after the raid, von Nothaus said he expects charges on money-laundering and wire fraud. Neither the FBI nor the U.S. attorney's office would comment.
But its clear something is coming, as the U.S. Mint declined to comment on the grounds that "litigation on the matter is pending."
The Paul campaign says it would likely return the donations if the money was deemed to have been obtained illegally. And that could very well happen if the charges stick.
Von NotHaus says the government agents had seized 500 pounds of silver, 40 ounces of gold, 3 ounces of platinum and 1.5 tons of copper, as well as taking all cash and computer records. Bank accounts were said to be frozen also.
The U.S. Mint says while it's not illegal to possess the Ron Paul money or Liberty Dollars, it is illegal to try to spend them.