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Error Experts: How did this happen (1970-S PF 25c on $5 gold)? Was it legally issued? Title issues?
cameonut2011
Posts: 10,835 ✭✭✭✭✭
I intentionally held off posting until the auction was closed. How does a proof 1970 San Francisco quarter "accidentally" end up overstruck on a 1898 gold half eagle?
I am especially curious as to the legal analysis of whether the coin was ever lawfully issued or whether it was an intentionally struck piece that is contraband and subject to government seizure.
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https://forums.collectors.com/discussion/1125565/error-guys-how-is-this-even-possible
https://forums.collectors.com/discussion/1125591/gold-washington-quarter-1970-s-washington-quarter-overstruck-on-1898-gold-liberty-half-eagle
chopmarkedtradedollars.com
Me thinks it was a Ghost Shift and probably an artificial error.
ANA 50+ year/Life Member (now "Emeritus")
Author: 3rd Edition of the SampleSlabs book, https://sampleslabs.info/
All of the information regarding this mint error is extensively covered in this article:
https://coinweek.com/the-gold-quarter-that-shouldnt-exist-1970-s-proof-error-heads-to-auction/ (https://forums.collectors.com/home/leaving?allowTrusted=1&target=https://coinweek.com/the-gold-quarter-that-shouldnt-exist-1970-s-proof-error-heads-to-auction/)
It isn't an error since this fantasy coin was intentionally fabricated. It would be subject to confiscation by the Secret Service since it was coined illegally using government own equipment.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
The article states that the coin came into the California State Controller's Office of Unclaimed Property which auctioned it after the "United States Secret Service inspected the collection and released it to the State of California." The article then concludes that this "gave collectors an important legal ownership history" to the coins. That is a nebulous statement at best. While the U.S. Secret Service has jurisdiction to authenticate coins, it does not, to my knowledge, have the statutory or other legal authority to lawfully issue or other authorize production of the coins. If the coins were never lawfully produced/issued, then clear title never passes. That's essentially the argument that was made for the Langboard 1933 Saint Gaudens Double Eagle.
If you recall, the government prevailed in the Langboard case. I would think the owners of this coin would face even more of an uphill battle if the Treasury Department ever showed an interest in doing so. The Langboards proved and the government acknowledged that the 1933 Saints were lawfully produced. There was a plausible argument that some could have escaped within normal processes without any nefarious action. I'm not sure what the theory would be for there magically being a 72 year old gold $5 coin in the hopper to strike what should have been a clad proof quarter. Given the careful loading of planchets and the normal processes associated with the production of proof coinage, it is even more suspect that the coin evaded detection at the Mint.
I would be curious if any of the previous owners including the state governmental entity had filed a declaratory judgment action or other action to essentially quiet title of the coin naming the U.S. Department of Treasury as a defendant. If not, there is still a huge legal cloud in my mind. The U.S. Mint and its employees have done a lot of shady things over the years.
Edited to add: As for the position that the Secret Service somehow legitimated the pieces, it lacked the statutory authority to do so and the defenses of waiver and equitable estoppel would likely not succeed against the government if litigation were ever initiated for the reasons discussed in later posts in this thread.
I'm not an expert but maybe the same way this one happened.
But this one is hard to believe, it's a true mint error! 🤣 😂
I can buy a screw coming loose from the equipment and falling into the hopper especially for circulated coinage. I can't fathom that the Mint just happened to have a 72 year old gold coin in the hopper for proof production.
Is not one thread on this abomination enough.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
I can't fathom the mint production floor is a carpenter shop! 😂 🤣
Would you like me to continue? 😂 🤣
I'm not sure. We had five on another dubious issue that is less fascinating to me than this one.
No, it adds value to the conversation.
I can't edit my own thread. We can make this one heavy on the legal discussion and circumstances surrounding its striking.
I'm done. I made my point. You can have your thread back.
I like it. Don't feel compelled to stop. I find error coins (and the dubious circumstances under which some of them are produced) quite fascinating.
I absolutely agree @cameonut2011 ! Didn't mean to hijack your thread.
For me, it's impossible to believe some of these outrages (so-called) mint errors weren't intentionally created on a weekend, mid-night shift at the mint. But good for them, if they're getting away with it! It gives us something to talk about. 😂 🤣 👍
As far as a nail getting struck with coins, didn't planchets obtained from their contractor suppliers come in wooden crates that were nailed together?
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Yes, from what I hear, the mint production floor is like a construction site! Wood, metal, tools, forklifts, grease, spare-parts, rags, .... You name it, it's there!
So what are we saying?....... There's crap flying everywhere during coin production?..... it looks like it! 😂 🤣
We keep talking about "hoppers", as if that's a thing with proof coins. It isn't, really, not in the sense of a regular circulation coinage press gravity-feeding a bunch of blanks into the presses - in 1970, the loading of the specially polished blanks into the proof coin press would have been a deliberate and manual process (these days, they use robots). There's also been mentioned of a "midnight shift", but it's entirely possible it took place during normal working hours of a normal production day. They'd just have had to be careful nobody was watching them at that moment.
Beyond the implausibility of a mint worker "accidentally" picking up a gold coin and feeding it into the press without noticing something was amiss, it's also beyond blind coincidence that the gold coin was aligned in the dies in such a way as to give the original coin's date the best possible chance of survival. So no, I don't think random chance had any participation in the creation of this coin.
So yes, it's "impossible" for it to be an actual "mint error", in terms of being an "improbable mistake" - unless one wants to be derivative and claim that the mint's "error" was in hiring a greedy so-and-so who used government resources for personal gain, and in having sloppy security protocols that didn't catch the perpetrator either in the act of making the coin or when they smuggled the coin off the premises.
However, in terms of definitions, I think it is still wisest to classify it as a "mint error", simply because there is a continuum of plausibility with such errors - while this specific gold quarter clearly is "implausible" to have been made as an actual mistake, there are plenty of other "error coins" where it is not so clear-cut; a line would have to be drawn somewhere between "genuine errors" and "bogus errors", and not everyone would agree where that line would be. Certainly the current owners of "error coins" that fell outside the line would not want their coins denigrated, devalued and dismissed as "not really errors". So perhaps it's better to be more broad and inclusive and consider anything mint-made and not-normal to technically be a "mint error".
In terms of a "Secret Service seizure", there might be some element of concern, as the Secret Service is concerned about counterfeits. If this coin was struck without proper authorization and smuggled out of the Mint, then it is, technically, a counterfeit quarter, irrespective of what it's made of. This is different from the seizure of the 1933 double-eagles; since those coins were officially made but never officially released to the public, the only way for them to "escape" from government custody is if they were stolen. The coin in question in this thread was almost certainly made with the perpetrator's own gold coin they brought into the Mint with them, rather than an old gold coin that was just sitting around the Mint floor someplace, so there is no clear-cut question of "stolen government gold".
Roman emperor Marcus Aurelius, "Meditations"
Apparently I have been awarded the DPOTD twice.
The counterfeit angle is very interesting but if it was struck using official government presses and dies at the Mint, I’m not sure I would agree that it is a counterfeit. It is in a league of its own.
I’m also not convinced that it is a third party’s private property. The coin could have been brought in, but one would think that there is a legal presumption that planchets and the resulting coins struck are U.S. Mint property. I suppose someone could rebut the presumption but proving it would likely be hard and the person seeking to make such a presumption would likely be admitting to illegal behavior which at best would still result in possible seizure. It’s an interesting thought.
Although certainly not binding authority, the Mint’s official policy is that coins that were never lawfully issued but struck remain property of the U.S. Mint. It confiscated an unauthorized aluminum cent trial strike on this basis.
https://www.usmint.gov/news/press-releases/20160317-mint-obtains-possession-of-aluminum-coin
The other arguments against the government that are implied in the article are not legally sound.
1- The Secret Service did not have authorization to make such a ruling and it does not constitute a valid waiver against the United States.
2- A closely related legal concept is equitable estoppel which would not apply to the government. See generally OPM v. Richmond, 496 U.S. 414, 419-424 (1990) (citing cases) for a long discussion about the government not being estopped by its agents that are mistaken or when they exceed their statutory authority.
careful. you'll give them second thoughts
the mint knows about the 1913 Vs. they haven't seized them
I know. The Mint’s aggressiveness in the last 3+ decades threatens to have a chilling effect for certain parts of the hobby, and I don’t like it at all. Congress should act to pass a statute to protect collectors.
Let's consider a slightly different scenario regarding this coin's creation. Suppose that our hypothetical tricky mint worker smuggled out of the Mint not a finished gold coin he had made on-site, but had smuggled out a pair of actual complete proof coin dies, and took those "borrowed" dies home to strike this coin using his own private coining press in his basement, using a gold coin he just happened to have lying around the house. Then maybe he smuggled the dies back into the mint again the next day so no-one would be any the wiser.
I think we'd all agree that a coin made under such circumstances would absolutely be a "counterfeit" - a weird backwards-kind of counterfeit where the planchet is actually more valuable than the genuine coin it was imitating, but still, an unauthorized coin struck without government knowledge or permission using stolen/borrowed dies, ought to qualify as "counterfeit".
The point is, such a coin would in any meaningful sense be physically indistinguishable from the OP coin. The only difference would be the location of manufacture, which the coin itself would preserve no memory of. I would argue that "a difference that makes no difference is no difference" and therefore the "location of production" is irrelevant when it comes to a coin being counterfeit or not.
I believe the legal basis for the government "owning" unissued coins and coin-precursors is the fact that the government originally "bought" them in the sense that they paid for all the machinery, raw materials and manpower used to create them, and never formally issued those things as money or otherwise relinquished ownership of them.
The planchet for the coin in question is provably an 1898 gold coin, which was definitely issued for circulation and thus was no longer deemed to be "government property". Assuming the perpetrator could prove legal ownership of that 1898 coin (this was 1970, when the private owning of gold was still "banned" with exceptions for coin collectors) I can't see that ownership changing without some kind of purchase by the government occurring. Coin dies do not magically and automatically impart government ownership upon a privately-owned piece of metal; the government would have to "buy it back" first.
Roman emperor Marcus Aurelius, "Meditations"
Apparently I have been awarded the DPOTD twice.
The Mint unequivocally paid for the dies and machinery in your example.
But you assume facts not in evidence. There is no evidence that someone used their circulated coin to strike the piece. Just because the 1898 $5 coin was struck and issued for commerce doesn’t mean that it was released and that government ownership ever ended. It could still have been government property. Again, I think there is a general presumption that anything that goes into the Mint to be struck is government property. There are a litany of potential evidentiary hurdles to proving the contrary, and even if you proved a private piece that was smuggled in was used as the host coin, it is a grey area of law at best. I’m still not convinced that it would not be subject to seizure.
It is an uphill battle for sure. I’m not convinced you would convince a jury or federal judge that it is more likely than not that a private individual’s coin was used rather than a government host coin, and I could see the government taking the position that it doesn’t matter. There is nothing stopping the government from seizing it. And based on the evidence available, I think a federal judge would side with the government.
Edited: Even if your private metal planchet theory were accurate, it would not surprise me to see the government attempt to make out a prima facie violation of one of criminal statutes and institute a forfeiture action on that basis alone. See, e.g., 18 USC 331 (fraudulent defacement) or 18 USC 332 (embezzlement of coin struck by Mint). To be clear, I’m not saying I would fully agree with that theory.
.....yet.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
I've heard the term "piece de caprice" used to describe coins like this. I disagree with calling it an error since it was obviously intentionally fabricated.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
The Secret Service declined to act when they had the coins for review and then returned them. That provides a degree of defense against government seizure.
The Farouk 1933 Double Eagle was not intercepted by a government worker (1940s customs agent?) when he had the chance and I believe that was pivotal in that case.
Precedence is a powerful argument, and error coins have a well-established history of acceptance and legality.
A gold quarter is clearly not naturally occurring, nor are proof errors that could not have fit into the packaging and therefore were not released through normal channels. But those distinctions don't seem to have mattered much over the years. I do think the passage of time makes a difference - if a ring of rogue mint workers was actively engaged in shenanigans and the authorities found out about it, I suspect thst they'd be aggressive in acting.
I have collected US Mint made errors since 1979.
Misstruck proof errors have publically traded in public auctions, dealer publications prior to my arrival in hobby.
Early on I added error publications, public auction catalogues to my library.
As outlandish US MINT manufactured proof errors have sold & resold in public for more than half century, what are the actual legal problems in 2026 ?
Happy Shopping !
Not an expert in the case by any stretch, but I believe the key factor was the government issuing an import license for the Farouk coin, not simply handing the coin itself back to the owner.
Sean Reynolds
"Keep in mind that most of what passes as numismatic information is no more than tested opinion at best, and marketing blather at worst. However, I try to choose my words carefully, since I know that you guys are always watching." - Joe O'Connor
Yes, that's as i recalled it.
But the SS getting the "error" coins for review and then returning them after giving the OK (presumably with a letter documenting the decision?) would be a powerful defense for owners of the coins. In fact, that situation is routinely cited as the basis for their legality.
You are essentially raising waiver and equitable estoppel defenses. These generally do not apply to the government as they would to normal litigants as discussed in my previous posts. The statute of limitations also does not apply as the government is not within a statute of limitations unless the statute expressly states that it applies to the government and its instrumentalities.
As for the estoppel issue and detrimental reliance, see generally OPM v. Richmond, 496 U.S. 414, 419-424 (1990) (citing cases) for a long discussion about the government not being estopped by its agents that are mistaken or when they exceed their statutory authority. ""Of this it is enough to say that the United States is neither bound nor estopped by the acts of its officers or agents in entering into an arrangement or agreement to do or cause to be done what the law does not sanction or permit." Id. at 496 U.S. 420 (citing Utah Power & Light Co. v. U.S., 243 U.S. 389, 408-409 (1917)). Cf. Federal Crop Insurance Corporation v. Merrill, 332 U. S. 380 (1947) (rejecting farmer's claim for relief under the Federal Crop Insurance program despite purchasing insurance with assurances from the government that it was covered, holding that "not even the temptations of a hard case" will provide a basis for ordering recovery contrary to the terms of the regulation, for to do so would disregard "the duty of all courts to observe the conditions defined by Congress...".).
Yes I realize that the particular cases cited do not specifically address coins, but they do govern and control when the defense of equitable estoppel and detrimental reliance are available against the government. The Supreme Court has squarely rejected those claims. As applied to when equitable defenses are available against the government in civil cases, the cases are not meaningfully distinguishable legally speaking. You make a strong policy argument, but legally there is nothing that precludes the government from taking action.
The point of this is not to trash the coin or attempt to create uneasiness for certain areas of the hobby. Rather, my hope is that someone will care enough and perhaps Congress will enact legislation to truly protect collectors. As it stands, collectors are at the mercy of the Mint and U.S. Treasury Department which can change.
Here is the short version: Equitable estoppel is a legal defense that prevents a party from going back on a representation or conduct if another person reasonably relied on it and suffered harm. People claim that the U.S. Secret Service legitimated the coin; however, the USSS does not have the power to coin money or lawfully issue them retroactively. Many are citing detrimental reliance/estoppel type defenses.
The case I cited undermines this argument as it discusses the general rule is that estoppel is not available against the government in civil suits particularly when the government's agents act beyond the authorization of the statute. In short, if the coins were never legally issued (as an intentional "error" coin would be) then there is nothing that legitimates the coin. There is nothing that stops the government from pursuing the coins in the future.
That is all true, I'm sure, but (for me) it is not a question of the argument being ironclad, but that it could be the basis for a defense.
Time elapsed, passivity or even approval by some government agents, precedence, etc. are all to the benefit of the owners.
There was no clear law for the Farouk Double Eagle, but the case was compelling enough that the government decided to settle in favor of private ownership.
I've often thought that case was decided incorrectly. It basically argued than an expert license for a stolen unmonetized coin somehow made it legal.
All comments reflect the opinion of the author, even when irrefutably accurate.
If the government confiscated a person’s coin, wouldn’t the liability be on the seller and/or the auction house? If a coin is later determined to be illegal to own, that would mean that the seller never had legal ownership of it.
There are a lot of variables and you might be out of luck. There are no federal statutes I am aware of that would control recovery for a buyer, so it would turn to state law. But what happens if it was an out of state buyer?
There answer is a principle called conflict of laws/choice of law. And each state depending on where suit was filed has its own process for deciding which state’s law would apply. Some follow the common law. Others follow a state statute, etc. Most states and federal forums would likely honor the consignor agreement/bidding agreement which likely has a choice of law provision. If so, it would likely be a question of California law. I don’t know what California law is on the matter assuming it would be the controlling law here.
The point of this is not to be alarmist, and even if the chance of seizure is low, I do not think it is zero. The ANA should push for a federal statute to protect collectors who innocently acquire coins of dubious origin.
"The point of this is not to trash the coin or attempt to create uneasiness for certain areas of the hobby."
Well, if I bought the 1970-S 25c struck on $5 gold overstrike the other day I would feel uneasiness.