Article Image


US v. BVNH Case # 5:09-CR-00027 Trial Day 2 - Part 1

Written by Heather Lewis Subject: Criminal Justice System
March 9, 2011 – Trial Day 2 (Part 1) An Order of Sequestration was issued March 8, 2011 by Judge Voorhees under Federal Rules of Evidence 615 which reads as follows: Rule 615. Exclusion of Witnesses At the request of a party the court shall order witnesses excluded so that they cannot hear the testimony of other witnesses, and it may make the order of its own motion. This rule does not authorize exclusion of (1) a party who is a natural person, or (2) an officer or employee of a party which is not a natural person designated as its representative by its attorney, or (3) a person whose presence is shown by a party to be essential to the presentation of the party's cause, or (4) a person authorized by statute to be present. THE PROSECUTIONS CASE CONTINUES Continuing testimony of FBI Special Agent Karen Walsh (aka Karen Wallace) First thing was more general questions about LDU7 and where it was held, October 2005 at the Fairfield Inn, Fletcher, North Carolina. BvNH and K Innes were the instructors. The prosecution in went over in detail the FBI process for making recordings and handling their chain of evidence. The defense has yet to object to a single item of evidence so I think the jury, judge and audience is tiring of the repeated procedure. It might be necessary but in my opinion they are just trying to drag out their case. G. Ex. 12 – 13 Recordings taken at LDU7 Day 1 and Day 2 along with the transcripts produced and a summary of all recordings made. In describing the nature of the training at LDU7 Walsh testified it covered the structure of the organization, profit margins, and marketing structures. She stated that the primary purpose of the Liberty Dollar was profit – “Make Money Making Change”. Or in other words buying the Liberty Dollars at a discount and handing them out as change for Federal Reserve Notes. Justice Voorhees provided jury instruction that while they would be presented with transcripts of recordings the transcripts are not evidence. The only evidence they are to consider is the actual recordings entered. The prosecution then entered G. Ex 12a and played snippets of the recording along with a transcribed version for the jury. It wasn’t possible for the audience to hear clearly what the recording said, nor to read the transcript which was projected on a screen in very tiny type. Walsh was asked what a merchant was, and her answer “anyone who transacts business”. What was the Merchant directory? It is a list of merchants who were accepting Liberty Dollars. She commented that BvNH stated the Liberty Dollars was “useful and viable” currency and was meant to be spent. He wanted it used. One of the snippets was of Tommy Weber, RCO for Skokie, IL. He asked “Do you recommend using the paper or the coins?” She then pointed out that BvNH did not refer to the Liberty Dollar as “coins”! He always called them Liberty Dollars. Prosecution entered G. Ex. 27, Paper warehouse receipts. G. Ex. 12g snippet “We are not in the silver business but in the currency business.” Her testimony was he wanted to be sure that this was not a bullion business to stock pile silver but to use it as currency. She referred to the Liberty Dollar as a “Local Currency”. Not numismatic although he brought a stamp to the training sessions and would put a mint mark on the coins to add value to them. And encourage everyone to keep some for posterity sake because they would become collectible eventually. The general rule was “this is currency and it is meant to be spent.” G. Ex. 13d Snippet about making profit. BvNH G. Ex. 13e “Compare it to the $10 FRN. The silver has value.” “They are both competing currencies.” She testified that the training was about the currency competing with the FRN? It was competing with the FRN. BvNH said “We don’t want to be branded an investment business.” When asked to define “species” she claimed it referred to coins. When asked if they were given any guidance on how to educate customers about taking the LD, she was trained to hold up a $10 FRN and a $10 LD and ask which one they wanted. To pitch it as a local currency that would stay in the local economy. G. Ex. 13g “Just give it to the next customer” G. Ex. 13h quoted from Tommy Weber “I love the Liberty Dollar” “Bernard you are going to be mad if I tell you what we are doing” “What?’ “We are not telling people about the Liberty Dollar. We are just dropping it into their hand. We were clogging the system trying to educate cashiers about money all the time. We can change the whole monetary system without educating everybody.” Walsh then testified as to what the “State Monetary Initiative” was. It was an effort to have each state name imprinted on the back of each LD where the RCO’s contributed money to have the dies made for each state. G. Ex. 13i “You do not have to educate each merchant. You can give them a brochure and maybe someone else in the house will be interested. The training that each customer did not have to be educated. G. Ex. 13j Liberty Dollar contracted with the Sunshine Mint to have their coins minted. G. Ex. 13k We are following along with the state quarters. 14 States have come on board so far. What was the move up? The Liberty Dollar was tied to the spot price. The Liberty Dollar was a $10 1 troy ounce coin when Walsh joined as an associate. When it reached a certain spot price known as the 30 day moving average the coins would be revalued to the $20 one ounce. G. Ex. 30 Email Walsh received from BvNH through Sarah advising the Liberty Dollar was getting near to moving up to the $20 price. Liberty Dollar newsletters came out monthly. Defense requested that the entire news letter be entered into evidence, not just a snippet. Liberty Dollar News, October 2005 Vol 7 No 10 Walsh then explained the 30 day moving average. And testified that the defendant made the decision as to what the spot price was that would trigger the move up based on the profit margin available. G. Ex. 31 Another Email – Liberty Dollar News G. Ex. 32 Another Email re: Move up Did you have an opportunity to purchase the new $20 Liberty Dollars? Yes. G. Ex. 35 Eight Liberty Dollars purchased from Kevin Innes after the move up on 12/20/2005. What were the circumstances behind the purchase? To see the new coins. To see what they looked like. Walsh testified multiple times that Kevin Innes was the only person she could purchase Liberty Dollars through because he was the RCO of her area. Did you make other purchases? Yes, May 2006 so that it would appear I was using my coins. G. Ex. 36 More Liberty Dollars I did not receive my May purchase until August of 2006. Did anything significant happen in September of 2006 regarding the Liberty Dollar? Yes, the mint issued a warning. She testified that K Innes did not contact her after the mint warning was issued. On September 21, 2006 Walsh contacted Innes, 5 days after the mint warning was issued, and Innes told her “it was only the Mints opinion and bad press.” Did you attend any more training after that? Yes, on October 25 I attended LDU11 in Skokie, Illinois. Who were the trainers? BvNH and Tommy Weber the RCO for Skokie, IL. Who conducted the training? BvNH. Did you talk to him about the Mint warning? Yes. He said that there had been some fallout from the Mint warning. Everybody is laughing it off and nobody was buying their story. G. Ex. 14 Recording from the social at LDU11 G. Ex. 15 Recording from Day 1 of LDU11 Both were entered as evidence with the same jury instruction being given as had been before. The tapes were the evidence and not the transcripts. Prosecution played a clip of BvNH making the following statement “there had been some fallout from the Mint warning. Everybody is laughing it off and nobody was buying their story.” Was the nature of the LDU11 training the same as the LDU7? Yes G. Ex. 37 Welcome letter for LDU11 G. Ex. 38 Six tools to sign up more Liberty Merchants, Instructions on how to sign up merchants, Tool #1 Doing the Drop. Was there specific training on how to introduce the Liberty Dollar? Yes. Everyone was broken up into teams. We were assigned to go out and practice distributing the Liberty Dollar. Walsh and others would go through the drop and Bernard would then critique the presentations. She commented that no one would take the Liberty Dollar at that exercise. How many merchants did you visit? 10 – 15 G. Ex. 15 clip was played with Bernard explaining that prices are not going up but the value of the dollar was declining and points out the benefits of the Liberty Dollar. He also mentions that they are a Non-profit. The prosecution again brought out G. Ex. 39 aka the “Bite Me” T-shirt, which at the top reads “Liberty Dollar since 1998 and “The U.S. Mint Can Bite Me” at the bottom of a centered picture of Liberty Dollar Liberty Dollar warehouse receipts and Liberty Dollar silver rounds. After LDU11 did you meet the defendant again? Yes, 1 week later at the Jazz Club in Asheville. How did you find out about this gathering? From BvNH and K Innes. G. Ex. 40 Email from K Innes re: BvNH visit. When in relationship to the Mint warning did you receive this email? After. G. Ex. 44 Trifold Liberty Dollar Brochure. 2007 Brochure Walsh testified that she received the brochure from BvNH at the Grey Eagle in March of 2007. And that the brochures were given out at every meeting. They always had some to give out. G. Ex. 51 More Liberty Dollar from a purchase received on October 26, 2006 (could be Oct 28) which she had ordered on September 21, 2006 after the Mint warning. Kevin Innes was at LDU11 on Saturday, October 28, 2006. She again remarked that she could only purchase from the Statesville RCO. How was the 1 ounce piece stamped at that time? $20 They showed a North Carolina Liberty Dollar front and reverse side. She also testified to purchasing other state Liberty Dollars from Puerto Rico, California and others from RCO’s that were at the LDU11. Can you recall anything that happened in March 2007? No answer Who is Julie Mueller? She is the FBI agent I introduced to act as a merchant. I asked K. Innes to give Agent Mueller a pitch. They all had a meeting at the Perch in Asheville on March 26, 2007. Did you record the meeting? Yes and Agent Mueller recorded and video taped the meeting. At this point the prosecution ended their questioning of this witness. Day 2 – Part 2 will begin with the Defenses cross examination of Agent Walsh. Stayed tuned in, it should be available later this evening or early tomorrow morning. The rest of the story will be available on my website at the following link: Author: Heather Lewis