WASHINGTON, March 21 (Reuters Legal) - A North Carolina man who led a group opposed to federal monetary institutions was convicted for creating and distributing a counterfeit currency that was very similar to the real dollar, a U.S. Attorney said.
Bernard von NotHaus, 67, minted Liberty Dollar coins and bills in the value of $7 million dollars with the goal of competing with the official currency. He claimed the Liberty Dollar was inflation proof and that it was redeemable for gold and silver.
The conviction concludes an investigation that was started in 2005.
"Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism," Anne Tompkins, U.S. Attorney for the Western District of North Carolina, said in a statement on Friday.
"While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country," she said.
The coins looked similar to official American currency, carrying the dollar sign and the words dollar, USA, Liberty, and Trust in God.
The Liberty Dollars were so widespread that the U.S. Mint and the Department of Justice issued a release in September 2006, warning consumers that the money was fraudulent.
Article I of the Constitution grants to Congress the exclusive power to coin money and to regulate its value.
Under a 2009 indictment, NotHaus and others were charged with conspiracy to defraud the United State and under provisions of the federal code that address currency swindles.
NotHaus has been associated with organizations that question the legitimacy of the Federal Reserve and the U.S. system of currency.
The statement said that NotHaus founded the National Organization for the Repeal of the Federal Reserve and Internal Revenue Code in 1998 and remained its president and executive director until 2008.
According to the indictment, the organization had tiers of executives and employees who marketed and distributed the currency. NotHaus also promoted the currency at a series of conferences at which he was a lecturer.
He faces a sentence up to 25 years in prison and must forfeit 16,000 pounds of the minted money.
The case is: USA v. von NotHaus et al, U.S. District Court for the Western District of North Carolina, No. 5:09-cr-00027.
For von NotHaus: Aaron Michel and Randolph Lee.
For the prosecution: Benjamin Bain-Creed, Jill Rose, Craig Randall and Thomas Ascik (Reporting by Wendell Marsh of Reuters; Additional reporting by Jeff Roberts of Reuters Legal)