Asheville man charged in alleged Liberty Dollar fraud scheme
By Clarke Morrison
Federal
authorities arrested an Asheville man in what they said was a scheme to
undermine the U.S. currency system and defraud consumers with so-called
Liberty Dollars.
William
Kevin Innes marketed the “barter” currency in Western North Carolina
and recruited merchants willing to accept it and give it as change for
products bought with real money, according to an indictment unsealed
this week.
Innes,
53, faces up to 45 years in prison if convicted. He was indicted along
with Bernard von NotHaus, president of the National Organization for
the Repeal of the Federal Reserve and Internal Revenue Codes, and two
other defendants from Indiana associated with the corporation.
Innes
made an initial appearance before a federal magistrate judge in
Asheville Wednesday and was ordered detained pending a detention
hearing set for Monday before a judge in Charlotte, according to the
U.S. Department of Justice.
Liberty Dollars are coins made of silver or gold and are touted as inflation-proof and a way to encourage buying local goods.
“When
groups seek to undermine the U.S. currency system, the government is
compelled to act,” said acting U.S. Attorney Edward Ryan of the Western
District of North Carolina.
“These
coins are not government-produced coinage, yet purchasers were led to
believe by those who made and sold them that they should be spent like
U.S. Federal Reserve Notes,” Ryan said. “Such claims are in violation
of federal law.”
Innes
and von NotHaus are charged with uttering and passing coins resembling
genuine U.S. coins and intended for use as money, mail fraud and
selling and possessing Liberty Dollar coins with intent to defraud.
Past statements
Despite warnings from the
federal government to the contrary, Innes told the Citizen-Times in
2006 that Liberty Dollars were legal.
“One
of the first things I did when I started this in Asheville was go to
the police and tell them what I was doing,” he said then.
Von
NotHaus created his organization in Evansville, Ind., in 1998, and
developed the Liberty Dollar. He touted the silver medallions as an
inflation-proof alternative to official currency.
The indictment alleges the corporation's purpose was to limit reliance on and compete with U.S. currency.
Innes
held the title of North Carolina regional currency officer and was one
of three members of the group's executive committee, the indictment
states.
A 2007 affidavit said more than 70 businesses in the Asheville area agreed to accept the Liberty Dollar.
“People
understand that there is only one legal currency in the United States,”
said Owen Harris, special agent in charge of the Charlotte office of
the FBI. “When groups try to replace the U.S. dollar with coins and
bills that don't hold the same value, it affects the economy.
“Consumers were using their hard-earned money to buy goods and services, then getting fake change in return.”
The
arrests are the latest development in an investigation under way since
at least 2004. Federal agents raided the company's headquarters in 2007
and seized documents and precious metals. A private mint in Coeur
d'Alene, Idaho, that produced the coins was raided the same day.
Von
NotHaus' organization said in 2006 that more than $20 million worth of
Liberty Dollar coins and notes were in circulation. Congress has
exclusive power to coin money in the U.S. and to regulate its value,
according to the Treasury Department.
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