MARSHALL ISALNDS' "LEGAL TENDER" COINS BRING LAWSUIT

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MARSHALL ISLANDS' "LEGAL TENDER" COINS BRING LAWSUIT

MAJURO, Marshall Islands (October 17, 1997 - Marshall Islands Journal)---A German coin collector filed a $120,000 suit against the government this week.

Local attorney Carl Ingram, who is representing Ashton J. Fruhling who wants to redeem his Marshall Islands commemorative coins, said he filed a claim with the Attorney General's office months ago. Although there have been some discussions, no result has been forthcoming, and the 90 day claim period has run out. "We're getting tired of waiting," Ingram said.

Assistant Attorney General Richard Hickson said that he was in the process of reviewing the entire coin program, including the agreement with Unicover Corporation which issues the coins and the government's procedures for redemption of coins, and would likely be completed in a week. "I need to complete the review to determine the legitimacy of the claims (brought by Ingram)," he said.

The Marshall Islands government believes that some German dealers selling Marshall Islands commemorative coins were attempting to defraud the program by selling high volumes of coins at low prices to buyers who then attempted to redeem these coins in Majuro at their face value. The Marshall Islands issues $5 to $50 denomination coins of events such as the moon landings and famous people, which it promotes as "legal tender."

Finance Minister Ruben Zackhras said that after several Germans came to Majuro earlier in the summer to cash in large numbers of coins, the RMI government launched an investigation into the matter. Concern that Unicover Corp. of Cheyenne, Wyoming, which produces the coins, was part of the problem have been erased, following a visit Zackhras made to the Unicover center recently. "We are satisfied with Unicover," the Finance Minister said. But Zackhras said he believes that the problem lies with some German coin dealers who purchase the coins at wholesale prices from Unicover. "We found some odd dealings between individual buyers and agents in Germany," he said.

The Majuro law suit says that Fruhling bought 2,200 $50 coins "in reliance upon the government's representation that the coins were 'legal tender' and redeemable in U.S. dollars."

In early May, Fruhling came to the Marshalls and over a three day period was able to redeem 60 coins but the government refused to pay for an additional 190 it had initially accepted from Fruhling, and later returned them to him and suspended all further redemptions, according to the suit.

The suit stated that government "misrepresentations" about the coin program are a violation of the Consumer Protection Act. The suit seeks nine percent interest on the damages. Ingram said he preferred not to go to court on the matter. "It's sad because it's a waste of time and money (to go to court). But we're being forced into it (by the lack of government response)."

The Marshall Islands Journal, Box 14, Majuro, Marshall Islands 96960 E-mail: Subscriptions (weekly): 1 year US $87.00; international $213.00 (air mail).

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