Conservative Babylon

“Sovereign Citizen” Alert: Damian and Holly Jackson, Minister & Wife Barred from Preparing Bogus “Commercial Redemption” Tax Returns

First, let’s review the background of the “commercial redemption” movement — a “sovereign citizen” scam that cites (among many other improbable things) The Wizard of Oz as the basis of its crazy (and illegal) method of ripping off the federal government (and thus you, Mr. or Ms. Taxpayer).

The Southern Poverty Law Center offers the most comprehensive, in-depth information about “commercial redemption,” but Wikipedia offers the most concise summary, so we’ll quote that and leave you with a bunch of fascinating (and scary) links from the SPLC for further reading.

“The redemption movement consists of supporters of an American conspiracy theory. Redemption theory involves claims that when the U.S. government abandoned the gold standard in 1933, the government pledged its citizens as collateral so that the government could borrow money. Other theories claim this happened in 1913 with the establishment of the Federal Reserve System. The movement also asserts that common citizens can gain access to funds in secret accounts using obscure procedures and regulations.

“According to the theory, the government created a fictitious person (or ‘straw man’) corresponding to each newborn citizen with bank accounts initially holding $630,000. The theory further holds that through obscure procedures under the Uniform Commercial Code, a citizen can ‘reclaim’ the straw man and write checks against its accounts. Its adherents sometimes call themselves ‘sovereign citizens.’

“There have been many well-publicized convictions of citizens attempting to take advantage of this theory. The U.S. Federal Bureau of Investigation (FBI) regards the instructors and promoters of Redemption schemes as fraudsters while the U.S. Internal Revenue Service has included the ‘straw man’ claim in its list of frivolous positions that may result in the imposition of a $5,000 penalty when used as the basis for an inaccurate tax return.

“The Redemption movement is based on a theory by Roger Elvick. The theory is, in part, that for every citizen’s birth certificate issued in the U.S. since the 1936 Social Security Act, the government deposits $630,000 in a hidden bank account linked to the newborn American and administered by a Jewish cabal. Redemptionists assert that by completing certain legal maneuvers and filing a series of government forms, the actual person may entitle themselves to the $630,000 held in the name of the doppelganger persona created for them at their birth, and may then access these government funds using ‘sight drafts.’ The government views these sight drafts as ‘rubber checks’ and the entire scheme as fraudulent. The federal government has convicted the practitioners of fraud and conspiracy. …

Seriously, what’s this business about The Wizard of Oz?

“One of the dominant interpretations of the film originated in the mind of high school educator Henry Littlefield, who saw [L. Frank Baum's] books (and most especially the first book on which the film was based) as a ‘Parable of Populism.’ Littlefield’s inspired interpretation saw the Tin Man as the factory worker of the east, the Scarecrow as the rancher of the Midwest, the Yellow Brick Road as the gold standard, and the Wizard as President McKinley living in the City of Emeralds, Washington, D.C., an historical-allegorical reading that continues to be reexamined and revisited today. While there is no evidence that Baum intended his story in this way, the interpretation continues to spawn interest.”

— Milton W. Wendland
“Real, Truly Live Places:
Notes Toward the Queer Uncanny”
Submitted to the graduate degree program in American Studies and the Graduate Faculty of the University of Kansas in partial fulfillment of the requirements for the degree of Doctor of Philosophy (2011)

See also:

• “The Wizard of Oz: Parable on Populism,” Henry M. Littlefield, 1964

• “Littlefield’s Interpretation,” Turn Me On, Dead Man (undated)

• “Responses to Littlefield,” Turn Me On, Dead Man (undated)

• “Secrets of the Wizard of Oz,” Rumeana Jahangir, BBC News, March 17, 2009

“One element of the theory states that Americans are U.S. nationals, not U.S. citizens, and can therefore avoid taxes by changing their filing status from ‘U.S. citizen’ to ‘non-resident alien.’ This argument has been repeatedly rejected by federal courts. Classes are often set up to teach the intricacies of the theory, and books have been published about it in the underground press. Canaanite law is held to be an important source of law and The Wizard of Oz (presumably because of the scarecrow character, i.e. the ‘straw man’) and The Matrix trilogy are held to have important symbolism in reference to this theory, and there is also said to be some connection to the New World Order. …

“In June 1991, Roger Elvick was found guilty by a federal jury in Hawaii of conspiracy to impede justice in connection with federal tax filings under 18 U.S.C. § 371. On September 30, 1991, he was fined $100,000, and was sentenced to five years in federal prison and three years of supervised release. Elvick was the national spokesman for the white supremacist group Committee of the States and the president of Common Title, a farm loan scam. He served his time and was released from the federal prison system on December 8, 1997. While incarcerated he was further convicted in another conspiracy. Upon release from prison he restarted the scheme in Ohio, where he was convicted in April 2005 of forgery, extortion and corruption.

“According to The Christian Science Monitor, a key figure is Sam Kennedy, host of the ‘Take No Prisoners’ program on Republic Broadcasting Network in Round Rock, Texas. In a mass e-mail early in 2010, Kennedy vowed to use his show to present a ‘final remedy to the enslavement at the hands of corporations posing as legitimate government.’ He pointed to a plan to ‘end economic warfare and political terror by March 31, 2010.’ In two months, he said, ‘we can and WILL, BE FREE with your assistance.’”

With that, this story about a good, Christian pastor from Detroit will make a lot more sense (at least, as much sense as this sovereign movement business ever can). Incidentally, the Perfecting Church in Detroit is the megachurch founded and pastored by gospel singer (and Whitney Houston’s and Bobby Brown’s wedding officiant and Whitney’s eulogist) Marvin Winans, who’s been having a truckload of troubles lately — and we’re not even talking about his 1995 divorce, but getting beaten, robbed and carjacked in May (as well as his umpteen traffic tickets — at least 15 times since 2005, according to the Detroit Free Press).

But this story isn’t about Marvin Winans; it’s about one of his ministers, who, Winans says, is a minister, but isn’t one of his ministers. We’ll take the Justice Department’s word over Winans’s:

Federal Court Permanently Bars Detroit Husband and Wife from Promoting Alleged Tax-fraud Scheme and from Preparing Federal Tax Returns
Detroit-Area Group’s “Diamond Tax Services” Business Allegedly Claimed
Over $29 Million in Fraudulent Income Tax Refunds
August 10, 2012 — A federal court has permanently barred a Michigan couple, Damian and Holly Jackson, of Detroit, from preparing federal tax returns for others, preparing their own federal tax returns using false 1099 forms, and promoting an alleged tax-fraud scheme based on the frivolous “redemption” theory, the Justice Department announced today. The civil injunction order, to which the Jacksons consented without admitting the allegations against them, was signed by Judge Paul D. Borman of the U.S. District Court for the Eastern District of Michigan.

The government complaint in the civil case alleged that the Jacksons and their business, Diamond & Associates Enterprises, operated Diamond Tax Services and promoted a scheme involving the preparation of fraudulent federal income tax returns for customers seeking large tax refunds based on a frivolous tax-defier theory called “redemption” or “commercial redemption.”

The complaint alleged that Damian Jackson, a minister at the Perfecting Church in Detroit, prepared tax returns that claimed huge fraudulent refunds based on fabricated income-tax withholding reported on false IRS 1099 forms. According to the complaint, Holly Jackson transmitted the false 1099 forms to the Internal Revenue Service (IRS). The suit alleged that federal tax returns prepared for at least 182 customers under the auspices of Diamond Tax Services sought over $29 million in fraudulent refunds, and that the Jacksons’ own federal income tax returns have requested more than $2.5 million in bogus refunds. While most of these frivolous refund claims are intercepted by the IRS before refunds are issued, the complaint alleges that the defendants’ scheme has caused the IRS to issue at least $1.6 million in erroneous refunds to the defendants’ customers. According to the complaint, the Jacksons solicited up-front fees of $500 to $995 from customers, and received a 10 percent cut of any refund issued by the IRS.

The injunction suit remains pending against a third defendant.

Return-preparer fraud and false claims for refund using fake information returns, such as Form 1099, are among the IRS’s “Dirty Dozen” tax scams for 2012.

In the past ten years the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website.

Source: U.S. Department of Justice

More reading about the soveriegn/redemption movement:

• “Sovereign Citizens Movement,” Southern Poverty Law Center (“The strange subculture of the sovereign citizens movement, whose adherents hold truly bizarre, complex antigovernment beliefs, has been growing at a fast pace since the late 2000s. Sovereigns believe that they — not judges, juries, law enforcement or elected officials — get to decide which laws to obey and which to ignore, and they don’t think they should have to pay taxes. Sovereigns are clogging up the courts with indecipherable filings and when cornered, many of them lash out in rage, frustration and, in the most extreme cases, acts of deadly violence, usually directed against government officials. …”)

• “New Multi-Million Dollar Scam Takes Off in Antigovernment Circles,” SPLC Intelligence Report, Winter 2002 (“Scam artists and right-wing extremists are hawking a pseudo-legal strategy that promises both financial gain and the opportunity to take revenge against what is seen as a sham government. Called ‘redemption,’ the technique has earned its promoters untold profits, buried courts and other agencies under tons of worthless paper, and led to scores of arrests and convictions throughout the United States. …”)

• “What is a ‘Sovereign Citizen’?,” SPLC Intelligence Report, Winter 2008 (“The ideas of the ‘sovereign citizens’ movement originate in the ideology of the Posse Comitatus, an anti-Semitic group that raged through the Midwest in the late 1970s and 1980s. …”)

• “Incident List: ‘Sovereigns’ and the Law,” SPLC Intelligence Report, Spring 2009 (“… Here are recent examples of sovereign-citizen activity that either has brought practitioners into contact with the criminal justice system or seems likely to. …”)

• “Sovereign Citizens Movement Resurging,” Casey Sanchez, Intelligence Report, Spring 2009 (“In the middle of the morning rush hour last July 8, a dapper, 49-year-old gentleman by the name of Angel Cruz tapped his walking cane against the pavement as he serenely orchestrated the armed takeover of a strip mall branch of the Bank of America in a Miami suburb. Wearing counterfeit U.S. Treasury badges, 30 of Cruz’s followers, including 10 armed guards, blocked the bank’s main entrance, parking lot and drive-through lanes. They were fiercely loyal to their fashionable leader, and with good reason: As employees of Cruz’s company, The United Cities, they’d been guaranteed lucrative jobs for 30 years and promised new cars while their mortgage, credit card and utility bills were to be paid off in full by their employer. Cruz paid for this largesse — or, rather, purported to pay — with fake bank drafts and fistfuls of “‘nited States Private Dollars,’ a counterfeit currency he churned out in his Orlando, Fla., home. …”)

• “Sovereign Ex: Participant Tells His Story,” Casey Sanchez, Intelligence Report, Spring 2009 (“At the start of 1995, David Kanz was just another guy in Milwaukee who believed in Jesus, celibacy and dawn-to-dusk, seven-day workweeks at Voice of Christian Youth America (VCYA), a fervently anti-abortion, Christian media operation made up of several publications, 13 radio stations and a television outlet. But by the end of the year, Kanz, then 35, had been transformed from a mild-mannered pastor-in-training to a ‘paper terrorist’ who went to prison for filing a $100 million bogus lien against a Planned Parenthood attorney. …”)

• “The Sovereigns: Leaders of the Movement,” SPLC Intelligence Report, Fall 2010 (“The leadership of the ‘sovereign citizens’ movement is populated with men who market a variety of generally nonsensical, and often illegal, schemes to avoid taxes, eliminate debts and extract money from the government. Many of these leaders specialize in the so-called ‘redemption’ scam, a bizarre technique that supposedly allows participants to tap into huge amounts of cash that the government is thought to keep in their name. What follows are short profiles of a dozen of these leaders. …”)

• “‘Sovereign’ Citizen Kane,” J.J. MacNab, SPLC Intelligence Report, Fall 2010 (“… Originally, the sovereign citizens movement mostly attracted white supremacists and anti-Semites, mainly because sovereign theories originated in groups who saw Jews as playing a behind-the-scenes role in manipulating financial institutions and controlling the government. Most early sovereigns, and some of those who are still on the scene, believed that being white was a prerequisite to becoming a sovereign citizen. They argued that the 14th Amendment to the Constitution, which gave blacks U.S. citizenship, also made black Americans permanently subject to federal and state governments, unlike themselves. In recent years, however, most new recruits are people who have found themselves in a desperate situation and are searching for a quick fix. Others are intrigued by the notions of easy money and living a lawless life, free from any unpleasant consequences. [Moreover, many self-identified sovereigns today are black and apparently completely unaware of the racist origins of their ideology.] …”)

• “Murdered Officers Part of Deadly Trend,” SPLC Intelligence Report, Fall 2010 (“… The Kanes, who had traveled the country giving classes in ‘redemption foreclosure mortgage fraud,’ went on to wound two other officers before being killed themselves. …”)

What to Get a “Sovereign Ciziten”
for Christmas

It makes as much sense as anything the sovereigns have come up with — and even links Lee Harvey Oswald’s assassination of John F. Kennedy to The Wizard of Oz:

“The diminutive form of the name Oswald is ‘Os” or ‘Oz’: a Hebrew term denoting strength. The role which ‘Divine Strength’ played in the Dealey ‘Goddess Rule’ Killing Of The King ritual should be given careful consideration. One should note the Significance of (Jack) Ruby’s killing (destroying) of ‘Ozwald,’ in reference to the ‘ruby slippers’ of The Wizard of Oz, which one may deride as a fairy tale but which nevertheless symbolizes the immense power of ‘ruby light,’ otherwise known as the laser. …”

• “The Sovereigns: A Dictionary of the Peculiar,” SPLC Intelligence Report, Fall 2010 (“Adherents of the ‘sovereign citizens’ movement and of sovereign financial scams like ‘redemption’ are known for their bizarre use of language and Byzantine belief system. What follows is a lexicon — or, more precisely, an idioticon, a dictionary of a peculiar dialect — meant to help court officials, law enforcement officers and the general public make their way through the sovereigns’ verbal fog. …”)

• “The Sovereigns: Tips for Law Enforcement,” SPLC Intelligence Report, Fall 2010 (“Unfortunately for law enforcement, self-described ‘sovereign citizens’ don’t come with a warning label. …”)

• “SPLC Video Reveals Dangers of ‘Sovereign Citizens’,” Larry Keller, SPLC Intelligence Report, Winter 2010 (“In places as disparate as Georgia, Indiana, Nevada and Virginia, law enforcement officers are coming up against sovereigns allegedly scheming to steal houses, pry loose money from the government that isn’t theirs, and harass their enemies with crippling property liens and other forms of ‘paper terrorism.’ Threats against law enforcement and judicial officials are clearly multiplying, and since the murder of two West Memphis, Ark., police officers by a father-son team of sovereigns in May, they are being taken increasingly seriously. …”)

• “Wife of ‘Sovereign’ Who Killed Arkansas Police Officers Sues Police,” Ryan Lenz, SPLC Hatewatch, April 21, 2011 (“Since her common-law husband and his son died 11 months ago in a gunfight with police after killing two officers, Donna Lee Wray has issued angry threats, hurled epithets at reporters and accused police of a cover-up. She has even tried to charge Hatewatch millions of dollars for the use of her ‘copyrighted name’ — a claim based on the bizarre ideology of the anti-government ‘sovereign citizen’ movement. …”)

• “‘Sovereign Citizens’ Fight the Law — and the Law Wins,” SPLC Intelligence Report, Summer 2011 (“… In one of the first cases of its kind, 12 sovereigns in North Georgia charged with stealing properties worth millions of dollars — including mansions and a strip mall in Atlanta’s wealthy Buckhead neighborhood — are being prosecuted under the Racketeer Influenced and Corrupt Organizations (RICO) Act. …”)

• “Feds Sue Seattle Man Peddling Sovereign ‘Strawman’ Scheme,” Ryan Lenz, SPLC Hatewatch, July 7, 2011 (“The federal government is suing a Seattle, Wash., man with a long history of involvement with the radical right for running a scheme whereby his clients filed bogus tax forms as part of a ‘sovereign citizen’ plot to defraud the government. In the complaint, filed in June, the Justice Department accuses John Lloyd Kirk of selling so-called redemption plans in the name of a phony American Indian tribe. …”)

• “‘Sovereign Citizens’ Guru Sentenced to Nearly Five Years in Scam,” Leah Nelson, SPLC Hatewatch, October 28, 2011 (“A Las Vegas federal judge yesterday sentenced influential ‘sovereign citizen’ Samuel Lynn Davis of Idaho to 57 months in prison for his role in a $1.3 million money laundering scheme…”)

• “‘Sovereign Citizens’ Scheme, Scam, Shoot and Face the Music,” SPLC Intelligence Report, Winter 2011 (“‘Sovereign citizens’ — antigovernment extremists who believe they are exempt from most laws and don’t have to pay taxes — continue to wreak havoc across the country. Notable among them are two prominent figures with longtime ties to the militia and other extreme-right movements. …”)

• “Church at Kaweah Spreads Hateful, Militant Christian Views,” Leah Nelson, SPLC Intelligence Report, Spring 2012 ([T]he Ecclesiastical Law Center (ELC), which says that ‘[t]heocracy, not democracy, was God’s plan’ … which is not a law firm — says that a church deeded to Jesus is ‘tax-immune’ and inoculated against any interference by secular authorities. … And, the ELC says, property deeded to Jesus is ‘totally outside the jurisdiction of the state. They have no authority to inspect it, or enter it, or lay requirements on it. There are no fire inspections, building inspections, use permits, asbestos inspections.’ …”)

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