October 21, 2019 – Attorneys Jonathan S. Goldstein and Shawn M. Rodgers of Goldstein Law Partners defeated baseless allegations that their client, Heritage Numismatic Auctions, had participated in stealing a collection of rare and ancient coins worth over $2.5 million dollars. In the U.S. District Court for the Eastern District of Pennsylvania, Martin A. Armstrong claimed ownership of the rare and ancient coins consigned to Heritage. Back in the 2000s, Armstrong pled guilty to criminal charges related to securities fraud after spending nearly seven years in federal prison for civil contempt. The litigation was dismissed in October after a federal judge held that no credible evidence existed to support Armstrong’s ownership claims.
Armstrong first surfaced when he noticed Heritage’s marketing campaign concerning an upcoming auction scheduled for January 2018. Heritage is an American multi-national company, and one of the world’s largest auctioneers in a variety of categories – ranging from fine art and collectibles to numismatics.
Armstrong contacted the auction house and maintained that in the 1990s, he purchased many of the coins listed in Heritage’s catalog offering – including the Henry III English Gold Penny, of which only three are known to exist. Armstrong did not offer Heritage any documentary evidence to substantiate his allegations. As a precautionary measure, Heritage nevertheless pulled the coins from its auction.
After much back and forth, litigation finally commenced in June of 2018 when the consignors of the coins – George and Andrew Antoniak – filed a lawsuit in federal court against Armstrong. They sought to declare their affirmative ownership rights to the $2.5 million coin collection. The Antoniaks purportedly acquired the coins from their business dealings as the owners of I.Switt, a local jewelry store in Philadelphia.
Armstrong counterclaimed against the Antoniaks and joined Heritage as an additional defendant. He alleged that the Antoniaks stole the $2.5 million coin collection, and that the auction house had been complicit in the theft.
On May 24, 2019, Heritage moved for summary judgment against Armstrong, arguing that the doctrine of collateral estoppel barred each of his claims. Heritage learned that, nearly two decades prior, the ownership of the coin collection had been previously adjudicated in the Southern District of New York. In 1999, the SEC and the CFTC filed dual enforcement actions against Armstrong. As part of these enforcement actions, the District Court required Armstrong to turn over all assets to a temporary receiver representing investors who had been defrauded.
This past summer, after a convoluted set of procedural circumstances, the ownership question came before Judge Castel of the Southern District of New York. The Court conducted hearings on the issue in June and July, offering all parties the opportunity to present their cases.
Heritage offered expert analysis by Sam Spiegel, which traced the purchase of the coins to funds connected to the fraud perpetrated against investors. On the other hand, Judge Castel found that Armstrong “failed to offer any credible documentation or explanation identifying a right to or interest in the fifty-eight coins held by Heritage.” Judge Castel, therefore, concluded that the prior orders of the SEC and CFTC enforcement actions encompassed the $2.5 million coin collection at issue in Pennsylvania. The coins “are and have been property of the receivership estate,” Judge Castel explained. Judge Castel further instructed Heritage to sell the coin collection on behalf of the receivership.
Based upon Judge Castel’s ruling in New York, the entire action in the Eastern District of Pennsylvania was dismissed. The dismissal order authorizes Heritage and the Antoniaks to file separate motions for sanctions and attorneys’ fees against Armstrong.