SAN DIEGO (CN) - A man trying to auction off a rare 1974 aluminum penny claims in court that the government has no right to interfere by demanding return of the coin, which it has done.
Randall Lawrence and Michael McConnell used the Department of Treasury and Bureau of the Mint, seeking declaratory judgment that the government's claim to the penny, which was struck at the Denver Mint, is invalid.
Facing a sharp increase in copper prices in 1973, the U.S. Mint proposed replacing copper pennies with aluminum. Pennies are the only U.S. coin whose metallic value equals or exceeds its face value. Between October 1973 and May 1974, more than 1.5 million aluminum cents were struck at the Philadelphia Mint, the lawsuit states.
Before the coins were released into circulation, they were withdrawn and most were destroyed. The Mint handed out a few of the pennies to members of Congress and other government officials, but the Mint later tried to get all of the cents returned, the complaint states.
Lawrence says that 18 to 21 aluminum pennies from the Philadelphia Mint are unaccounted for. An investigation into the missing 1974 aluminum pennies was closed in 1976, with the government saying that it had found "no evidence of criminal intent" by those in possession of the coins, the complaint states.
One of the 1974 coins was certified by Professional Coin Grading Services as Mint State 62 grade in 2005. Albert P. Toven, a former U.S. Capitol police officer, apparently picked up the penny in the basement of the Rayburn Office Building in Washington, DC in 1974 after a congressman dropped it, the complaint states.
Thinking it was a dime, Toven tried to return it to the congressman, but was told to keep it. Toven then realized it was not a dime, but an aluminum penny. The coin was passed on to his family after Toven died in 1999, the complaint states.
The penny received extensive publicity in the press, yet the government never made any attempt to recover it from the Toven family, the lawsuit states.
Lawrence says that the coin he owns - the one the government is - was stamped at the Denver Mint, where his father, Harry Lawrence, worked for 20 years. Randall Lawrence says he found the coin among other possessions after his father's death in 1980.
Although Mint officials have stated that there is no evidence that any aluminum cents were struck at the Denver Mint in 1974, a former Denver Mint employee, Benito Martinez, told "Coin World" that he personally struck fewer than a dozen of the pennies as a die setter on aluminum planchets that had been provided by the Philadelphia Mint, the complaint states.
The Denver Mint struck a dozen pennies at most and then sent them to U.S. Mint headquarters in Washington, D.C., the lawsuit states.
"The small number and deliberate manner in which each was individually struck and sent directly to Washington further indicates that these were likely created to be presented to members of Congress and government officials, as were the Philadelphia-mint aluminum cents," Lawrence says in the complaint.
Of the dozen or so aluminum cents rumored to have been minted at Denver, only Lawrence's coin is known to exist. He wants to sell the penny at auction in April.
The U.S. Mint sent Lawrence a letter in February, "demanding the return of their aluminum cent. The letter stated that the government takes the position that, because Congress never issued an aluminum cent as legal tender, any aluminum cent remains property of the federal government, regardless of how long it has been in private hands," according to the complaint.
Lawrence denies it. "Thousands of coins minted by or for the U.S. Mint that were never 'issued' as legal tender have been widely and publicly collected and purchased and sold by coin collectors and dealers for over a century without any claims whatsoever from the government," he says in the lawsuit. "These include coins that were actually sold or 'gifted' by the Mint itself such as the aluminum cents, as well as coins that left the Mint under unknown circumstances."
Lawrence cites "pattern" coins - experimental pieces illustrating a proposed coin design or embodying a proposed change in coin composition, size or shape - which were never issued as legal tender, but have been widely collected and sold without interference from the government.
Other rare coins - including the 1913 Liberty Head nickel, the 1894-S dime, and the 1943 copper penny - were never officially issued as tender, but the government has made no attempt to reclaim them, the complaint states.
"Now, after over a century, the government states, in effect, that none of these coins is legal to own.
"Without doubt, this is a radical position on the government's part. The government has made no effort to reclaim or recover any of the thousands of other non-legal tender coins produced by the Mint," the complaint states.
In the pursuit of Lawrence's aluminum penny, the government is "defying a century of precedent allowing and encouraging private ownership of such coins," Lawrence says.
If the government has the legal basis to reclaim some of the most valued coins in the numismatic community, it would be a disaster for collectors and the general public, Lawrence says.
"The government's successful claim to plaintiffs' aluminum cent would place a cloud over all non-legal tender coins because it would permit future seizures without warning or further justification. Inevitably, fear of such action would cause many important and historic coins to be exported or simply hidden, depriving numismatists and Americans generally of their beauty and educational value," the complaint states.
Lawrence and McConnell seek a declaratory judgment that the government has no legal claim to their 1974-D aluminum penny.
They are represented by Armen R. Vartian, of Manhattan Beach.
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