IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA STATESVILLE DIVISION NO. 5:09CR00027

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1 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA STATESVILLE DIVISION NO. 5:09CR00027 UNITED STATES OF AMERICA ) ) v. ) ) BERNARD VON NOTHAUS, ) Defendant ) ) DEFENDANT S REPLY MOTION FOR RETURN OF SEIZED PROPERTY NOW COMES defendant Bernard von NotHaus, on behalf of Mary S. ( Suzy ) Nothhouse and her son, Robert K. ( Bob ) Nothhouse, owners of 16, troy ounces of raw silver, and files this reply to the government s response to defendant s motion to return property. In support of this reply, Mr. von NotHaus shows the Court the following: The government s reply relies on technicalities and ignores the fundamental injustice of holding the life savings of a 93 year old widow and a 65 year old veteran of the Vietnam War for 4.5 years without providing any apparent basis that would indicate it has a chance to ultimately prevail in ancillary forfeiture proceedings -- unless it waits out the owners lives and forces them to spend their remaining savings on 1 Case 5:09-cr RLV-DCK Document 264 Filed 06/28/12 Page 1 of 9

2 litigation. 1 This fundamental injustice is a due process violation for which the Court can and should provide a remedy. The government s reply makes only one substantive attempt at showing a basis for continued forfeiture, finding support in the fact that Sunshine Minting, Inc. ( Sunshine ) allowed Suzy Nothhouse to open a small account because of the Mint s preexisting business relationship with her other son, Bernard von NotHaus. Through the 25 years he spent producing legitimate medallions as the Mint Master of the Royal Hawaiian Mint, Mr. von NotHaus had a long-standing business relationship with Sunshine prior to any of the activities challenged in the indictment. Even if Mr. von NotHaus s relationship with Sunshine was based solely on the Liberty Dollar, Mrs. Nothhouse s separate business activities with Sunshine do not show any nexus between her silver and Mr. von NotHaus s alleged criminal activity. The government characterizes Mrs. Nothhouse s statement as "whimsical" when she provides a simple and truthful reason for making her final 225 ounce silver purchase from Sunshine: she wanted to have an even 15,000 ounces. In total, Mrs. Nothhouse and her son, Robert K. Nothhouse, own 16 1,000 Troy ounce bars of silver. While the government may label this detail as whimsical, it is nothing more than a fact about the amount of silver held in Mrs. Nothhouse s account. 1 The undersigned does not believe that is the purpose of the government s attorneys. However it may be the actual effect of their litigating posture. 2 Case 5:09-cr RLV-DCK Document 264 Filed 06/28/12 Page 2 of 9

3 The government s response labels the silver a "surety" for Mr. von NotHaus s business relationship with Sunshine. This characterization is contrary to the evidence, contrary to Sunshine s legal obligations, and based on pure speculation. The silver was in Mrs. Nothhouse s name and Sunshine could not buy, sell or otherwise change ownership of it without either obtaining her signature or violating the legal duties owed to her as a customer. From the dates of purchase until the FBI s seizure of the silver, Sunshine did nothing with Suzy and Robert Nothhouse s property but keep it in a safekeeping warehouse. Sunshine did not need a surety, since monthly audits were conducted of the silver in each safekeeping account. Presumably, a similar audit was conducted of the accounts held by Mr. von NotHaus. As a business matter, Sunshine insisted on payment before making sales, shipping metals, or providing storage, safekeeping, or minting services. Sunshine needed no surety. Even if it did, it is clear that the silver owned by Mr. and Mrs. Nothhouse was never used or intended to be used for this purpose. The government s unproven speculation regarding suretyship is not a valid excuse for continuing to hold the property of innocent parties. In order to establish a connection between Mr. and Mrs. Nothhouse s silver and Bernard von NotHaus s offense conduct, the government s response cites a memo summarizing the evidence that was previously filed as Document However, 2 Specifically, the government refers to page 21 of the memo filed as Document Case 5:09-cr RLV-DCK Document 264 Filed 06/28/12 Page 3 of 9

4 nothing in this memo rises above mere speculation in order to establish any kind of "nexus" or basis for forfeiture. Nothing contradicts Mrs. Nothhouse s affidavit, 3 which refutes any suggestion that the silver she owned (or that her son, Robert Nothhouse, owned) was either proceeds of any criminal activity or was intended to be used in counts two and/or three of the indictment. On page 21, the memo alleges that Mrs. Nothhouse s account was "used by the defendant and his Royal Hawaiian Mint" ( RHM ). First, RHM is not a part of this case and no evidence has been adduced that it was related to any illegal activity. There was no connection between RHM and the silver owned by Mr. and Mrs. Nothhouse. Even if such a connection existed, it would be irrelevant to this case. Second, a general connection between the silver and Mr. von NotHaus is equally irrelevant. Only a firm connection between the offenses of conviction and the silver would establish a basis for forfeiture. Unlike a civil forfeiture proceeding in which the claimant must establish his innocence, a claimant in an ancillary proceeding related to a criminal forfeiture order only needs to establish that he has a superior interest in the property in order to prevail. See In re Moffitt, Zwerling & Kimler, P.C., 864 F. Supp. 527, 533 (E.D. VA 1994) (where the Court held that a third party may successfully oppose the forfeiture through a petition under 853(n) by proving, by a preponderance of the 3 Exhibit C in Defendant s Motion for Return of Seized Property. 4 Case 5:09-cr RLV-DCK Document 264 Filed 06/28/12 Page 4 of 9

5 evidence,... that the third party had a superior interest in the property at the time the defendant committed the crime. ). Suzy and Robert K. Nothhouse made their own silver purchases with their personal funds, Mrs. Nothhouse personally contracted with Sunshine, she maintained control over her account, and she regularly received invoices from the company. As such, Suzy and Robert K. Nothhouse had a superior interest over any other party, including Bernard von NotHaus, in the silver maintained by Sunshine on their behalf. On page 22, the memo reads that a Sunshine accountant stated that another account was "associated with NORFED. 2 However, there is no explanation as to what associated with actually means. The only apparent association lies in the fact that Mrs. Nothhouse is Mr. von NotHaus s mother and thereby was able to open a small personal account at Sunshine. This tenuous link between accounts is alluded to in various notations on some of Sunshine s internal paper work. 4 Mrs. Nothhouse s affidavit addresses each of these notations, none of which connect either her own or her son s silver to Mr. von NotHaus s offenses of conviction. There is no evidence or 4 See Defendant s Motion for Return of Seized Property Exhibits A and B in which one of Mrs. Nothhouse s invoices include notations in the Customer box that read Bernards Mom [sic] and Mom Bernard [illegible] Safekeeping. 5 Case 5:09-cr RLV-DCK Document 264 Filed 06/28/12 Page 5 of 9

6 probable cause to believe that her silver is proceeds of Mr. von NotHaus s offenses or was used to facilitate his conduct. 5 On page 24, without any justification or evidence, the memo characterizes Mr. von NotHaus as an alter ego of Mrs. Nothhouse. Made evident in the news articles regarding her swimming school and Senior Games accomplishments, Mrs. Nothhouse is nobody s alter ego. Likewise, Mr. von NotHaus is not anyone s alter ego. Both are strong-willed, independent individuals. No evidence has been presented that substantiates, in law or in fact, the government s assertion that Mrs. Nothhouse was an alter ego or shell through which Mr. von NotHaus committed criminal acts. The same sentence relating to "alter ego" also refers to a check Mrs. Nothhouse wrote to Sunshine as an accommodation for Bernard von NotHaus. She discusses her financial relationships with her children in her affidavit. 6 Mr. von NotHaus visited his mother in Florida and was away from his own bank. Rather than jumping through the hurdle of having Mrs. Nothhouse guarantee Mr. von NotHaus s check at her own bank, he asked her to write a check from her account for which he planned to and did in fact reimburse her. The fact that Mrs. Nothhouse provided her son with a temporary loan as 5 Everything in this world is associated with everything else in this world because of the connection to this world. Only a "substantial connection" makes a "nexus" for purposes of the forfeiture laws. 6 Defendant s Motion for Return of Seized Property Exhibit C, p. 7, Case 5:09-cr RLV-DCK Document 264 Filed 06/28/12 Page 6 of 9

7 a personal favor does not make her a part of whatever the check is for. One such accommodation over a large number of years is immaterial. The memo s suggestion that it has proven, by a preponderance of the evidence, that the silver is proceeds of and was intended to be used for counterfeiting is an empty assertion. There is no evidence that Suzy and Robert K. Nothhouse s silver had any connection to counterfeiting conduct. In fact, their silver never left their account until it was confiscated by the FBI. Suzy and Robert K. Nothhouse s affidavits explain that their silver was proceeds of their own savings and was intended to be used as their personal investment. No evidence has been presented which contradicts or casts doubt on these affidavits and the related documentary exhibits. WHEREFORE, Bernard von NotHaus, on behalf of Mrs. Mary S. Nothhouse and Mr. Robert K. Nothhouse, requests immediate release of the silver or a hearing before this Court to adjudicate this motion. This the 28th day of June, Respectfully submitted, 7 s/ Noell P. Tin Noell P. Tin 301 East Park Ave. Charlotte, NC Phone: Case 5:09-cr RLV-DCK Document 264 Filed 06/28/12 Page 7 of 9

8 Fax: Case 5:09-cr RLV-DCK Document 264 Filed 06/28/12 Page 8 of 9

9 CERTIFICATE OF SERVICE I certify that I have served the foregoing DEFENDANT S REPLY TO MOTION FOR RETURN OF SEIZED PROPERTY on opposing counsel by submitting a copy thereof through ECF, to be sent to: Thomas R. Ascik Assistant United States Attorney 100 Otis Street Asheville, NC Thomas.Ascik@usdoj.gov This the 28 th day of June, s/ Noell P. Tin Noell P. Tin 301 East Park Ave. Charlotte, NC Phone: Fax: ntin@tinfulton.com 9 Case 5:09-cr RLV-DCK Document 264 Filed 06/28/12 Page 9 of 9

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA STATESVILLE DIVISION DOCKET NO. 5:09CR27 ) ) ) ) )

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA STATESVILLE DIVISION DOCKET NO. 5:09CR27 UNITED STATES OF AMERICA v. BERNARD VON NOTHAUS CONSOLIDATED REPORT ON PENDING PETITIONS