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En Banc Treatment for Rare Gold Coins Battle

PHILADELPHIA (CN) - A family that inherited 10 misbegotten Double Eagles - rare U.S. coins worth approximately $80 million - urged the en banc Third Circuit on Wednesday not to send the coins back to the government.

Along with her sons Roy and David, Joan Langbord discovered the gold Double Eagles in 2003 when she drilled open a safe-deposit box that had belonged to her late father, storied Philadelphia jeweler Israel Switt.

Considered the most beautiful coin, 445,500 Double Eagles were struck at the Philadelphia Mint in 1933, during the depths of the Great Depression, but they were never put into circulation.

The coins were ordered melted down into gold bars because President Franklin D. Roosevelt had ordered the nation's banks to abandon the Gold Standard and outlawed the use of gold coins as American currency.

There were supposed to have been only two Double Eagles left in existence, kept at the Smithsonian, but Secret Service learned in the 1940s that 20 coins had found there way into the hands of collectors. In 2002, the U.S. government auctioned off one coin it seized in 1996 for more than $7.5 million at Sotheby's, making it at the time the most valuable coin ever auctioned. To this day, the buyer remains anonymous, known only as "Mr. Big."

When the Langbords sent their Double Eagles to the government for authentication, Uncle Sam snapped back that it would not return the coins because it considered them stolen goods.

Secret Service had investigated Switt decades earlier on the suspicion that he smuggled Double Eagles out of the Philadelphia Mint, but it never proved anything.

After a trial on the government's ensuing civil forfeiture proceeding, a jury found that the coins belonged to the government.

A three-judge panel of the Third Circuit vacated that finding this year, however, saying the government failed to follow civil procedure.

With the federal appeals court having agreed to reconsider the case en banc, that decision has been vacated. At the hearing Wednesday, an attorney for the Langbords insisted that the government circumvented a provision of the Civil Asset Forfeiture Reform Act that requires a 90-day notice of the taking.

"There seems to be no question that what the government effectuated was a seizure," attorney Barry Berke argued.

The government meanwhile claims that it did not have to initiate usual civil-forfeiture procedures since the government never lost title to the coins; they were simply out of hand for nearly 80 years.

"Mr. Berke begins by saying ... that this is about an extraordinary and inappropriate abuse of government power," Robert Zauzmer with the U.S. Attorney's Office said. "And that's what you say when your father and grandfather stole a gold coin from the U.S. Mint, hid them for 80 years, kept them in a safe-deposit box, concealed them from the government, and then it came to the light of day that another one of these coins, stolen by the same person, sold for $7.5 million. You say it's all about a government abuse of power."

Judge Thomas Hardiman put a hypothetical to the Langbords' attorney.

"So if college students secrete the Constitution, and we can't find it for 20 years, and they give it to their children, and the government finds all the ironsides, they then have to do a forfeiture action?" the judge asked.

Berke replied that in that instance, there would be a criminal prosecution against the Constitution's thieves, thereby triggering civil forfeiture.

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