THE BAR CARD

AS PER THE UNITED STATES SUPREME COURT;
The practice of Law CAN NOT be licensed by any state/State. (Schware v. Board of Examiners, 353 U.S. 238, 239)
The practice of Law is AN OCCUPATION OF COMMON RIGHT! (Sims v. Aherns, 271 S.W. 720 (1925))

The "CERTIFICATE" from the State Supreme Court:
ONLY authorizes,
To practice Law "IN COURTS" as a member of the STATE JUDICIAL BRANCH OF GOVERNMENT.


Can ONLY represent WARDS OF THE COURT, INFANTS, PERSONS OF UNSOUND MIND (SEE CORPUS JURIS SECUNDUM, VOLUME 7, SECTION 4.)

"CERTIFICATE" IS NOT A LICENSE to practice Law AS AN OCCUPATION, nor to DO BUSINESS AS A LAW FIRM!!!

The "STATE BAR" CARD IS NOT A LICENSE!!!   It is a "UNION DUES CARD".

The "BAR" is a "PROFESSIONAL ASSOCIATION."
1. Like the Actors Union, Painters Union, etc.

2. No other association, EVEN DOCTORS, issue their own license.  ALL ARE ISSUED BY THE STATE.

It is a NON-GOVERNMENTAL PRIVATE ASSOCIATION.

The State Bar is;
An Unconstitutional Monopoly.

AN ILLEGAL & CRIMINAL ENTERPRISE;
Violates Article 2, Section 1, Separation of Powers clause of the U.S Constitution.


There is NO POWER OR AUTHORITY for joining of Legislative, Judicial, or Executive branches within a state as the BAR is attempting.  "BAR" members have invaded all branches of government and are attempting to control de jure governments as agents of a foreign entity!

It is quite simple to see that a great fraud and conspiracy has been perpetrated on the people of America.  The American Bar is an offshoot from London Lawyers' Guild and was established by people with invasive monopolistic goals in mind.  In 1909 they incorporated this TRAITOROUS group in the state of Illinois and had the State Legislature (which was under the control of lawyers) pass an unconstitutional law that only members of this powerful union of lawyers, called the "ABA," could practice law and hold all the key positions in law enforcement and the making of laws.  At that time, Illinois became an outlaw state, and for all practical purposes, they seceded from the United States of America.

The "BAR ASSOCIATION" then sent organizers to all the other states and explained to the lawyers there how much more profitable and secure it would be for them, as lawyers, to join this union and be protected by its bylaws and cannons. They issued to the lawyers in each state a charter from the Illinois organization.  California joined in 1927 and a few reluctant states and their lawyers waited until the 1930's to join when the treasonous Act became DE FACTO and the Citizen's became captives.

Under this system, the lawyers could guarantee prejudged decisions for the privileged class against the lower class.  This was all made possible by the AMERICAN BAR ASSOCIATION to favor the right and have unlawfully substituted them in place of Constitutional Laws.  The Constitution was written in plain English and the Statutes passed by Congress were also in plain English, with the intent of Congress how each law should be used and not the opinions of various Judges as the codes list. Any normal person can read the Constitution and Statutes and understand them without any trouble.

The public in California was shocked to learn that the State Government has no control or jurisdiction over the Bar Association or its members. The state does not accredit the law schools or hold Bar examinations. They do not issue state licenses to LAWYERS. The Bar Association accredits all the law schools, holds their private examinations and selects the students they will accept in their organization and issues them so-called license but keeps the fees for themselves. The Bar is the only one that can punish or disbar a Lawyer.

They also select the lawyers that they consider qualified for Judgeships and various other offices in the State. Only the Bar Association, or their designated committees, can remove any of these lawyers from public office. The State Legislature will not change this system as they are also a designated committee of the Bar. On August 21, 1984, Rose Bird, Chief Justice of the California State Supreme Court, another of the Bar Associations Judicial Committee's, stated in essence, that the Bar should determine the legality of all initiatives before they were allowed to go on the ballot.

This is contrary to both State and Federal Constitutions, as well as the Laws of this Nation instituted By and For the People as a Sovereign UNITY of Independent States of We The People, not a fraudulent Corporate entity of Lawyers. This is a tremendous amount of power for a PRIVATE union that is incorporated and headquartered in Illinois to hold over the Citizens of California or any other state. The only recourse is through this initiative process and vote by the people.

After the Founding Fathers had formed the Constitution, outlining the laws as to the way our government was to be run, Thomas Jefferson said, in essence, "This proves that plain people, if given the chance, can enact laws and run a government as well as or better than royalty and the blue bloods of Europe." The American people must stop thinking that lawyers are better than they are and can do a better job than they can before the courts of America.

Under the Common Law and the Laws of America, no where is it expressly given for anyone to have the power or the right to form a Corporation. "Corporations" are given birth because of ignorance on the part of the American people and are operating under implied consent and power which they have usurped and otherwise stolen from the people. By RIGHT AND LAW THEY HAVE NO POWER, AUTHORITY, OR JURISDICTION, and must be put out of business by the good Citizens of America in their fight for FREEDOM.

The U.S. Constitution GUARANTEES to every state in this union a REPUBLICAN FORM of government. Any other form of government is FORBIDDEN. No public officer or branch of government can be limited to a RULING CLASS of any kind, or the states become ARISTOCRACIES and NOT Republics. Also, the lawyers have made themselves 1st Class Citizens, where many public offices and branches of government are open to lawyers only.

All other people are limited to only two branches of government and to only certain offices in those two branches of government, making all people who are non-lawyers into 2nd class subject citizens. When the courts belong to the people, as the United States Constitution REQUIRES, (Article IV, Section 4, we the people, will NEVER rule against themselves.) In these Unconstitutional foreign tribunals "courts" (hoodlum centers), "men" in black dresses, that are Unconstitutional ROBES OF NOBILITY. (Article 1, Section 9 and 10) dispense a perverted ideology, where the people are terrorized by members of the BLACK ROBE CULT (lawyers and lawyer judges in the courtrooms).

The legislative branch of government does NOT have the Constitutional Power to issue Court Orders or any other kind of Orders to the people, as a "fiction court" or a "court/corporation for profit and gain" cannot reach parity with a lawful man. ONLY Presidents and Governors have the Constitutional Power to grant PARDONS, but lawyers and lawyer-judges are unconstitutionally granting PARDONS with "immunity from prosecution."

Citizens are not permitted to act like people in the courts. The Citizen (2nd class) is told that he does not know how to fill out fancy lawyer forms; that he is not trained in the law; that he does not know court rules and procedures; etc. This is Unconstitutional "lawyer system," only HEARSAY SUBSTITUTES (lawyers) NOT under oath, have access to the fiction/for profit and gain courts, even though ONLY sworn testimony and evidence can be presented in court. Anything else is "Bill of Attainder," NOT permitted under the U.S. Constitution (Article 1, Sections 9 and 10).

The U.S. Constitution does NOT give anyone the right to a lawyer or the right to counsel, or the right to any other HEARSAY SUBSTITUTE. The 6th Amendment is very SPECIFIC, that the accused ONLY has the right to the ASSISTANCE of counsel and this ASSISTANCE of counsel CAN BE ANYONE THE ACCUSED CHOOSES WITHOUT LIMITATION.

LAWYERS and LAWYER-JUDGES: Created Unconstitutional "lawyer system" pre-trial "motions" and "Hearings" to have eternal EXTORTIONISTIC litigation's, which is BARRATRY and also is in violation of the U.S. Constitution, and Article 1, as this places defendants in DOUBLE JEOPARDY a hundred times over. Defendants only have a right to A TRIAL, NOT TRIALS. When a criminal is freed on a TECHNICALITY, HE IS FREED BECAUSE OF A FIX and a PAY-OFF, as a defendant can only be freed if found innocent BY A JURY NOT BY ANY "TECHNICALITY."

Whenever a lawyer is involved in a case directly or indirectly, as a litigant or assisting in counsel, ALL LAWYER-JUDGES HAVE TO DISQUALIFY THEMSELVES, AS THERE CANNOT BE A CONSTITUTIONAL TRIAL and also there would be a violation of the conflict of interest laws, along with the violation of separation of powers and checks and balances, because "OFFICERS" OF THE COURT ARE ON BOTH SIDES OF THE BENCH.

These same LAWYER-JUDGES are awarding or approving LAWYER FEES, directly and indirectly, amounting to BILLION OF DOLLARS annually, all in violation of conflict of interest laws. As long as there are lawyers, there will never be any law, Constitution or Justice. There will only be MOB RULE, RULE BY A MOB OF LAWYERS.

CASE "LAW" IS UNCONSTITUTIONAL: As CASE "LAW" IS ENACTED BY THE JUDICIAL BRANCH OF GOVERNMENT. When a lawyer-judge instructs, directs, or gives orders to a jury, the lawyer-judge is TAMPERING WITH THE JURY. He also tampers with testimony when he orders the answers to be either "Yes" or "No." The lawyer-judge also tampers, fixes, and rigs the trial when he orders anything stricken from the record, or when he "rules" certain evidence and the truth to be inadmissible.

This makes the trial and transcript FIXED and RIGGED, because the jury does not hear the REAL TRUTH and ALL THE FACTS. Juries are made into puppets by the lawyers and lawyer-judges. All lawyers are automatically in the judicial branch of government, as they have the Unconstitutional TITLE OF NOBILITY (Article 1, Section 9 and 10), "Officer of the Court." Citizens have to be elected or hired to be in any branch of government, but non-lawyer Citizens are limited to only two of the three branches of government. Lawyers, as 1st class citizens, can be hired or elected to any of the three branches of government.

Lawyers, "Officers of the Court," in the Judicial Branch, are Unconstitutionally in two branches of government AT THE SAME TIME whenever they are hired or elected to the executive or legislative branches. This is a violation of the separation of powers, checks and balances, and the conflict of interest laws. District attorneys and State's attorneys have taken over the Grand Juries FROM the people, where the people are DENIED ACCESS to the Grand Juries when they attempt to present evidence of crimes committed in the courtrooms by the lawyers and lawyer-judges.

The U.S. Constitution, being the Supreme Fundamental Law, is not and CANNOT be ambiguous as to be interpreted, or it would be a worthless piece of paper and we would have millions of interpretations (Unconstitutional amendments) instead of the few we have now. That is why all judges and public servants are SWORN TO SUPPORT the U.S. Constitution, NOT interpret it.

Under INTERNATIONAL ORDERS: ALL LAWYERS, whether they left law school yesterday or 50 years ago, are EXACTLY THE SAME. All lawyers have to file the same motions and follow the same procedures in using the same Unconstitutional "lawyer system". In probate, the lawyers place themselves in everyone's will and estate. When there are minor children as heirs, the lawyer-judges appoint a lawyer (a child molesting Fagin) for EACH CHILD and, at times, the lawyer fees EXCEED the total amount of the estate.

An OUTRAGEOUS amount of TAX "MONEY" is directly and indirectly STOLEN BY LAWYERS. Money that is budgeted to County/City/Borough Boards, School Boards and other local and federal agencies eventually finds its way into the pockets of lawyers, as ALL of these agencies are "TRICKED" and "FORCED" into ETERNAL EXTORTIONISTIC LITIGATION.

In the state of Alaska and Hawaii, the BAR ASSOCIATION has mandated that all judges are to be licensed to practice law (e.g. Alaska Constitution, Article IV, Section 4).  This license requirement is not found in any other state of the Union.  As all licenses to practice law in the state of Alaska and Hawaii are issued by a judge, what judge is qualified to issue a license to practice law to another judge?  As only members of the Bar may be licensed to practice law (e.g. A.S. 08.08.020), Alaska and Hawaii judges are REQUIRED to be members of the BAR and as such, they are prejudiced to do the business of the BAR.  If a judge is required to be a member of the BAR, who disqualifies the judge from office if that judge does not pay the dues or violates the rules of the BAR?  Every state in the Union (with the exception of Alaska and Hawaii) "prohibits" judges from holding licenses to practice law.

February 2014 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

     Below is a summary of the activity reported for February 2014. Please feel free to post comments about these or other Ponzi schemes that I may have missed. And please remember that I am just relaying what’s in the news, not writing or verifying it.

     Barbra Alexander, 66, of California, was convicted on 28 counts relating to a $6.7 million real estate Ponzi scheme. Alexander is the former producer of the financial talk show “Money Dots.” She operated APS Funding along with Michael Swanson, 65, and Beth Pina, in which about 45 investors placed their money and were promised 12% interest in connection with hard money short term loans for real estate. Swanson and Pina have also been convicted.

     Stanley Wayne Anderson, 69, pleaded guilty to charges relating to a Ponzi scheme run through CFO-5 LLC and Trinity International Enterprises, with the assistance of Lawrence Kennedy Jr. and Edwin Alexander Smith. The three men are accused of defrauding investors of about $5 million. Kennedy was previously sentenced to 12 months in prison, and Smith was sentenced to 30 months. Kennedy had conducted business through Keys to Life Corp. which solicited investment funds for Trinity. Investors were promised returns of between 200% and 1,000%.

     Douglas Bates, 55, pleaded guilty to charges that he assisted Scott Rothstein in connection with Rothstein’s Ponzi scheme. Bates had been charged with assisting Rothstein by inflating legal bills and signing a false letter. He was involved in about $60 million of Rothstein’s $1.4 billion fraud.

     Michael Berman and his company Discount Gold Brokers have been accused in a lawsuit of running a nationwide Ponzi scheme. Thomas Hendrix sued Berman and Discount Gold Brokers claiming that they defrauded victims by failing to deliver large orders of precious metals and coins, or by sending only a partial order and pocketing the difference.

     Annette Bongiorno, Joann Crupi, Daniel Bonventre, George Perez and Jerome O’Hara put on much of their case in defense as the prosecutors rested in the criminal trial of these defendants. The defendants are former employees of Bernard Madoff who hope to blame Madoff and prove that Madoff kept them in the dark. Bonventre, who ran the investment advisory unit at Madoff’s company, sought to have Dr. Paul Babiak, a psychologist who wrote “Snakes in Suits,” testify in his defense that Madoff was a psychopath. Bonventre testified in his own defense saying “Now, I think he’s a terribly ill man, and it’s difficult to reconcile everything I knew for 40 years and what I know now.” The court also dismissed two counts against Bonventre relating to arranging for his son to get a no-show job at Madoff’s firm. The court also granted the defense request to play excerpts of an October 2007 video of Madoff in action at a conference asserting that the then-current securities regulations provided a sufficient safeguard against fraud. Bongiorno also took the witness stand in her own defense.

     Janet Brown, the wife of deceased Jack Brown, agreed to plead guilty to charges relating to a $10 million Ponzi scheme run through Browns Tax Service. Janet Brown was charged with lying during a bankruptcy hearing when she was questioned about holding jewelry. She said she was not, but then turned over a bag of jewelry appraised at $25,000 to her attorney a few days later. Jack Brown had promised returns of 15% to his clients from supposed day trading, but instead used much of the money to fund a lavish lifestyle.

     Frank Castaldi’s 23 year sentence was upheld by the Seventh Circuit, which held that the punishment was reasonable and that the lower court had properly considered Castaldi’s cooperation with the government. U.S. v. Castaldi, 2014 U.S. App. LEXIS 3394 (7th Cir. 2014). The lower court had imposed a sentence that was nearly double the length of the term requested by the prosecutors.

     Robert Custis was banned from appearing or practicing before the SEC as an attorney under Rule 102(e) of the Commission’s Rules of Practice due to his involvement with Yusaf Jawed and his Ponzi scheme run through Grifphon Asset Management LLC and Grifphon Holdings LLC. The SEC accused Custis of making false and misleading statements to investors in the Grifphon scheme.

     Russell Erxleben, 57, was sentenced to 90 months in prison in connection with a $2 million Ponzi scheme that he ran through his companies, WALTEC Consultants, LRE Holdings, and The MDM Group. The investment scheme involved post-WWI German government gold bonds and works of art. Erxleben had previously been sentenced to 10 years in prison in 1999 after pleading guilty to charges in connection with a $30 million foreign currency trading scheme.

     David N. Hawkins, 46, was sentenced to 2½ years in prison and ordered to pay $204,000 in restitution in connection with a $1.2 million Ponzi scheme to which he pleaded guilty. Hawkins was a sheriff’s deputy who took advantage of his position as a law enforcement officer to gain the trust of investors to invest in his foreign currency exchange business. A total of 73 people invested, and all but 3 had been repaid.

     Kimberly Jeffreys pleaded guilty to one charge relating a real estate Ponzi scheme that she was accused of running with her husband, Greg Jeffreys. The Jeffreys had been accused of running a real estate Ponzi scheme that defrauded investors out of millions of dollars. Kimberly admitted that she had knowingly provided false financial statements reflecting that she and her husband had assets exceeding $30 million so that they could secure loans for the construction of a property.

     Michael Anthony Jenkins and his company, Harbor Light Asset Management LLC, were ordered to pay a total of $5.2 million in connection with charges that they were operating a commodities Ponzi scheme and had violated the federal Commodity Exchange Act. The court ordered them to pay $1.3 million in restitution and $3.9 million in penalties. Jenkins had defrauded more than 377 North Carolina residents out of at least $1.8 million, convincing them to invest in “E-mini futures” and promising them that their money would be sent to a specific trading account. He provided them with statements showing false trades, profits and inflated values.

     Kenneth Kenitzer, 70, was sentenced to 6 years in prison for his role in an $83 million Ponzi scheme run through Equity Investments Management & Trading. The scheme defrauded more than 300 individuals of about $40 million which they were not repaid. Kenitzer was an officer in the company that promised returns as high as 36% a year based on a computerized trading program. Anthony Vassallo had previously received a prison sentence of 16 years in connection with the scheme.

     Christina Kitterman, 39, was found guilty at her criminal trial in connection with the Ponzi scheme of Scott Rothstein and his law firm, Rothstein Rosendfeldt Adler. Kitterman was accused of assisting the Rothstein fraud by pretending to be a Florida Bar official in telephone conversations and in a meeting with investors. Kitterman had pleaded not guilty, and her lawyers asserted that Rothstein named another lawyer, not Kitterman, as the one who participated in an investor meeting. Rothstein testified at the trial that he hired Kitterman and that she told investors that Rothstein’s law firm’s accounts had been frozen in connection with a pending bar investigation. Kitterman took the stand in her trial and insisted that she did not lie for Rothstein. Prosecutors will likely ask for a 9 year prison sentence, while Kitterman will seek a sentence below 5 years. The court may evaluate perjury implications arising from her testimony at trial in connection with sentencing.  Rothstein also testified at the trial of Christina Kitterman that democratic candidate for Florida governor, Charlie Crist, engaged in contributions-for-favors quid pro quo. Rothstein said: "For certain [campaign] contributions, people were appointed to the bench." Crist has called the statements “gibberish.”

     Michael Kratville, was found liable for operating a $4.7 million Ponzi scheme that defrauded 130 victims. He ran the scheme through Elite Management Holdings Corp., NIC and MJM Enterprises, LLC. Kratville promised returns of 6% per month and claimed that he ran an “investment club exempt from the Securities and Exchange Commission rules.” In reality, the funds were being sent to an investment firm in Spain. Kratville was sued by the CFTC in 2007, and was ordered to pay restitution of $524,000 and penalties of $1.17 million. Additionally, a court ordered about $10 million in civil sanctions against Elite Management Holdings, MJM Enterprises, Kratville and Jonathan Arrington. Last year, Kratville’s business partner Michael Welke agreed to pay $257,000 in restitution and $130,000 in penalties. Kratville, Welke and Arrington are all facing criminal charges related to the scheme.

     Gary H. Lane, 60, a former Bank of America Merrill Lynch financial advisor, was sentenced to 10 years in prison for running a $2.7 million Ponzi scheme that defrauded at least 6 investors. Lane convinced investors to place money in an account outside of Bank of America, promising that the funds would be invested in U.S. Treasury bonds that would pay more than 6% interest with a 2 year maturity. Instead, the money was placed in his wife’s E*Trade account. Merrill Lynch fired Lane and has not been named in any lawsuits. The firm made full restitution to the victims.

     Gregory P. Loles, 54, was sentenced to 25 years in prison in connection with a $27 million Ponzi scheme that he ran through Apeiron Capital Management Inc., an investment advisory firm. Loles falsely represented that Apeiron was a registered investment management firm and that he would invest his victims’ funds in “Arbitrage Bonds,” which Loles promised would deliver safe and steady returns. Lole defrauded parishioners in the church in which he was a manager and also misappropriated church funds. He defrauded more than 50 victims and, instead of investing their money, he paid personal expenses, purchased a large home with a pool, tennis court and multi-car garage for his sports cars, and funded his other business operations.

     Derek Lurie, 40, was charged in connection with running a Ponzi-like scheme through his company, American Escrow, which allegedly defrauded investors of more than $500,000. It is alleged that American Escrow survived by using new escrow funds to pay off tax and insurance payments due at different times throughout the year. An employee of the company, Jacqueline Cruz, was indicted earlier this year on charges relating to 122 company checks that she wrote to herself totaling more than $400,000.

     Daniel McCorry was ordered to pay the state of New Jersey more than $335,000 for his role in defrauding elderly victims to invest in the $8.5 million Ponzi scheme run by Michael Kwasnick through Liberty State Financial Holdings Corp. and its subsidiary Liberty State Benefits of Pennsylvania. The companies were purportedly in the business of buying life insurance contracts from elderly people and collecting their benefits when they die. McCrory and Joseph Schifano induced about 30 annuity holders to give up their contracts in exchange for promissory notes in Kwasnick’s company.

     Ron Earl McCullough and David Christopher Mayhew were charged by the CFTC with running a foreign exchange Ponzi scheme that allegedly defrauded 11 investors of about $2.3 million. They promised very high short-term returns from foreign exchange trading, but instead of investing the money they spent much of it for personal expenses, which included online forex trading courses.

     David Wilson McQueen, facing charges in connection with a $46.5 million alleged Ponzi scheme, saw one of his co-defendants flip and agree to testify against him. Jason Eric Juberg agreed to plead guilty to charges relating to the sale of unregistered securities through Michigan-based, American Benefits Concepts, Inc. As part of the plea agreement, charges were dropped against Jubert’s father, Donald Juberg. Trent Francke, another target in the investigation, previously pleaded guilty and agreed to testify against McQueen. Two other co-defendants, Penny Hodge and John Bertuca, also pleaded guilty and agreed to testify.

     John J. Packard, 63, and Michael J. Stewart, 66, were arrested in connection with an alleged Ponzi scheme run through Pacific Property Assets. Pacific Property filed bankruptcy in 2009, having $100 million of bank debt and $91 million owed to about 647 investors. They promised investors that they would use the funds to purchase, renovate, operate and resell or refinance apartment complexes in Southern California and Arizona. The SEC sued them in 2012 and alleged that they formed a new company, Apartments America, to replicate Pacific Property’s business model.

     Melody Nganthuy and her companies, My Forex Planet Inc., Wal Capital, S.A., and Top Global Capital, Inc., were charged by the CFTC with operating a $3.7 million foreign exchange scheme. The scheme allegedly fraudulently solicited at least $3,764,214 from over 174 customers. Phan used forex training classes to solicit clients to open accounts at Wal Capital. The CFTC complaint alleges that the defendants used customer funds for unauthorized purposes, such as paying other customer withdrawals and for business expenses such as radio ads and marketing.

     Roderick Rieman, 69, was sentenced to 4 years in prison and ordered to pay $6.6 million in restitution, along with his associate, Michael Crook, 55, who was sentenced to 3½ years in prison and ordered to pay $6.6 million in restitution in connection with a Ponzi scheme that they ran through Z Touch Systems, Global Payment Solutions, Bluko Information, and Smart Restaurant Solutions. Rieman and Crook defrauded about 126 investors out of $6.6 million in connection with their supposed insurance and investment business.

     Bradley Schiller, 37, was sentenced to 6½ years in prison and ordered to pay $5.3 million in restitution in connection with his $10 million Ponzi scheme. Schiller had spent the money raised from investors for the purpose of commodities futures trading on a Range Rover, country club fees and payments to investors while he lost the rest of the money trading.

     Laurie Schneider, 39, pleaded guilty to charges relating to her operation of a $6.9 million Ponzi scheme through her company, Janitorial Close-Out City Corp., which defrauded 30 investors. Schneider promised investors up to a 60% return in 18 months on a supposed deal to buy machinery in China and sell it in the U.S. at a steep markup. Schneider allegedly spent the investors’ money on a country club membership, a power boat, luxury cars and travel.

     Charles G. Shomo, 63, pleaded guilty to charges that he defrauded more than 30 investors out of more than $620,000 through his company, P&G Enterprises. Shomo offered investors promissory notes with a one year maturity. There was no plea agreement.

     Kari Sonovich, 42, was arrested and charged in connection with a $3 million investment scheme that allegedly targeted victims of the Equity Investment Management and Trading Ponzi scheme run by Anthony Vassallo and Kenneth Kenitzer. Sonovich recruited investors to invest with her company, B&B Consulting Group LLC, and represented that she would place their funds with an international trader who promised returns of up to 500% every 90 days.

     George Theodule, 52, was sentenced to 12½ years in prison in connection with a $68 million Ponzi scheme that targeted as many as 2,500 investors, many of which were from the Haitian community. Theodule had promised investors that he would double their investment in 90 days by investing in stock options. He used the company names Creative Capital Consortium and A Creative Capital Concepts to run the fraud. He invested about $18 million in stock options but lost it all. The rest of the investor’s funds were spent on Theodule’s lavish lifestyle, including exotic cars, motorcycles, jewelry and Vegas trips.

     Deepal Wannakuwatte, 63, of California, was arrested on charges that he allegedly ran a $100 million Ponzi scheme through his companies, International Manufacturing Group, Inc. and Rely Aid Global Healthcare Inc. Wannakuwatte represented to investors that their funds would be used to finance contracts to supply gloves to the U.S. Department of Veterans Affairs and that he had contracts totaling $100 million per year. In reality, actual sales totaled about $25,000 per year and investors were paid with money from other investors not from profits from glove contracts. General Electric Capital Corp. had sued Wannakuwatte’s companies last year for $4.6 million, and the court in that pending lawsuit ordered that Wannakuwatte give GE a $3 million private King Air plane that had been pledged as collateral.

     WCM777 is now subject to regulatory actions and investor alerts in 7 jurisdictions: Peru, Massachusetts, California, Colorado, Louisiana, New Hampshire and New Brunswick.

     Eliyahu Weinstein aka Eli Weinstein aka Edward Weinstein aka Eddi Weinstein, 38, of New Jersey, was sentenced to 22 years in prison and ordered to pay $215.4 million in restitution in connection with his $200 million real estate Ponzi scheme. Weinstein targeted victims from the Orthodox Jewish community, misrepresenting that he had inside access to below market prices for real estate. Weinstein spent millions of dollars on jewelry, Jewish ceremonial art, credit card bills, gambling and legal expenses. His accomplice, Vladimir Siforov, has also been charged in connection with the scheme but remains at large.

     Dawn Wright-Olivares, 45, and her step-son, Daniel Olivares, 31, pleaded guilty to charges relating to their roles in the ZeekRewards $850 million Ponzi scheme. Wright-Olivares worked as the chief operating officer and Olivares worked as the master computer programmer. The two were charged with knowing that the daily reward of 1.5% promised to investors was arbitrary and not related to the company’s net profits, yet they did not disclose this to investors. After learning about criminal investigations of ZeekRewards, they withdrew large amounts of money and caused the forgiveness of loans made to them by the company. Criminal charges have not been filed against the scheme’s mastermind, Paul Burks.

INTERNATIONAL PONZI SCHEME NEWS

Australia

     Ronald Morris Coles, 66, a former art dealer currently sitting in jail awaiting sentencing for running a $6 million Ponzi scheme, spoke at his sentencing hearing. Coles denied that his scheme was a “calculated fraud” but admitted that it involved “robbing Peter to pay Paul.” He also stated that he could have been more ruthless, stating: “If I wanted to, I could have gotten five, six million dollars in 24 hours and we wouldn’t  be here. . . I could be having pina coladas right now.”

     Bill Vlahos, accused of running a $144 million Ponzi scheme, was seen on the run at a local pub, but has not yet been picked up. Vlahos, accused of running a Ponzi scheme through his race horse business, BC3, was questioned at a hearing in connection with his bankruptcy case. Investors had placed more than $140 million into the Edge, a betting syndicate

China

     It was reported that a Ponzi scheme entitled “Pure Capital Investment” has attracted a large number of Malaysians. The get-rich-scheme promises investors that they will receive a return of more than 100% on their investment of RM 38,474 if they bring at least 3 new investors to the scheme. Malaysian investors are lured into the scheme by all-expense paid trips to China where they are told that the scheme is not against the law and that this is their chance to become multi-millionaires.

England

     Matthew Ames was found guilty on counts relating to a £1.6 million Ponzi scheme operated through his two companies, Forestry for Life and The Investors’ Club. The companies claimed to invest money in teak tree plantations that generated carbon credits which could then be traded for profit. Ames promised investors returns of 15%. Ames terminated the employment of any employees who questioned the legitimacy of his companies. At the time of his arrest, Ames was in the process of setting up a new company, the Carbon Neutral Business Director, when he could no longer attract investments into his other companies.

     David Reid pleaded guilty to charges that he ran a Ponzi scheme through his company, Washington Mortgage Centre, which defrauded about 50 victims of £3 million.

     Benjamin Wilson, 35, was sentenced to 7 years in prison in connection with a $34.94 million Ponzi scheme that he ran through SureInvestment and that defrauded more than 300 victims. Wilson had pleaded guilty last year to charges of dishonesty and operating a collective investment scheme. He had promised investors average annual returns of 60%. At Wilson’s sentencing, the court said that Wilson committed an “utterly shameless confidence fraud” that was “an abuse of trust on a massive scale.” Wilson spent the investor’s money on a Ferrari, horse racing, travel and a luxury property.

India

     Tata Group, an Indian conglomerate that operates over 100 companies worldwide issues a warning to consumers that its name “Tata” is being wrongfully used by a British Virgin Islands company, Tata Agro Holding Ltd. Tata Group disavowed any connection with the company and warned that Tata Agro had been soliciting investors and promising daily returns between 1.9% and 3.1%. Tata Agro represented that it was a subsidiary of Tata Group and that it was an agricultural investment company. Tata Agro also had a “referral program” which promised commissions.

     Sudipta Sen, the chairperson of Saradha Group, was sentenced to 3 years in prison. Sen admitted that various arms of Saradha Group did not properly deposit money deducted from employee’s salary. This resolves one of many complaints in connection with the Saradha Ponzi scheme that involved around 1.7 million investors an about Rs 20,000 crore.

     The offices of Pearls Golden Forest (PGF) and Pearls Agrotech Corp Ltd. (PACL) were searched by regulators following charges that the companies allegedly defrauded investors by promising agriculture land to investors. Documents obtained in the search reveal that the companies allegedly operated a Ponzi scheme to defraud about 5 crore investors of Rs 45,000 crore. The Central Bureau of Investigation named PGF director Mirmal Singh Bhangoo and PACL director Sukhdev Singh in a case of criminal conspiracy and cheating.

New Zealand

     The Financial Markets Authority dropped its complaint against David Ross because he pleaded guilty to charges relating to a Ponzi scheme run through his company, Ross Asset Management. Ross was sentenced to 10 years and 10 months in prison for his nearly $400 million Ponzi scheme.

     The liquidator of Ross Asset Management is preparing to file clawback actions to seek to recover up to $25 million from investors who received money during the course of the Ponzi scheme. Ross pleaded guilty last year to stealing $115 million from 700 investors and was sentenced to 10 years in prison.

     Charles Huggins stood trial for allegedly running a $5 million (£3.13 million) Ponzi scheme. Huggins defrauded wealthy clients such as comedian Steve Harvey and football player Emmitt Smith by promising them he was investing in diamond and gold mining in West Africa, but instead used the money to fund other business ventures.

Russia

     “ProfMedia” broadcasting company was fined 100,000 rubles for advertising the MMM Ponzi scheme operation over the radio. Regulators alleged that the broadcaster ran MMM advertisements on two of their radio stations without clarifying who was providing the services described. Regulations require that the service provider must be named in the advertisement. MMM was originally set up in the 1990’s by Sergey Mavrodi, who was arrested in 2003 and sentenced in 2007. After his release from prison, he set up similar schemes again using the name MMM with the stated ambition of “destroying the global financial system.”

South Africa

     The Net Income Solutions alleged Ponzi scheme, known as Defencex, will not be investigated further. The bank accounts of Defencex were frozen last year with a balance of R320m. It has been reported that the scheme solicited more than R800m from about 200,000 investors. Last year, the Reserve Bank had ordered the inspection of the business affairs of Defencex, Cycle4Dollars, Net Income Solutions and its director, Chris Walker. Although a court labeled the scheme as an “illegal deposit-taking scheme,” the Reserve Bank has not get lodged a complaint with regulators or police, so no further investigation is taking place at this time.
 
NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

     Rio Casino, owned by Caesars Entertainment Corp., was found liable by a jury to return about $1,480,000 million that was gambled at the casino by Salvatore Favata. Favata operated a $32 million Ponzi scheme through National Consumer Mortgage in which he promised investors returns of 30% to 60%. Favata gambled much of the money he received from investors, and over $10 million was used to purchase cashier’s checks that were transferred to Rio Casino to be used at the casino’s sportsbook. Although the jury found that in the one year prior to National Consumer’s bankruptcy filing Rio Casino had received $6,840,000, Rio Casino had established defenses to the fraudulent transfer and preference claims brought by the trustee to all but $1,480,000 of the transfers. In 2007, Favata plead guilty and was sentenced to 5 years in prison.

     Victims of Glen Galemmo and his company Queen City Investments filed a lawsuit against Fifth Third Bank, U.S. Bank and PNC Bank to recover more than $450,000 that they had invested in Galemmo’s $100 million Ponzi scheme. The victims allege that the banks allowed their checks to be deposited into accounts other than the accounts where the victims allege they were to be deposited. Galemmo has pleaded guilty but has not yet been sentenced.

     The bankruptcy court approved a settlement with JPMorgan Chase & Co in the Bernard Madoff case which resolved two lawsuits. JPMorgan will pay $218 million to settle a class action lawsuit against it and $325 million to settle claims brought by the Madoff trustee.

     The special master over the Madoff Victim Fund has extended the deadline for victims to submit claims to share in the $4 billion of forfeited funds to be distributed by the government to victims of the Bernard Madoff scheme. About 9,000 claims have been filed to date, and the special master has agreed to extend the deadline to April 30 to accommodate those claimants who need more time to file their claims. The special master has also reported that approximately 94% of the claims received so far have come from individuals who either did not file a claim with the trustee-administered fund or whose claim there was disallowed because they were not direct investors with Madoff.

     A group of investors led by Touchstone Group LLC sought court approval of a $6 million settlement of their claims against Mantria Corp. relating to an alleged $54 million Ponzi scheme that targeted the elderly and retired.

     Ritchie Capital Management and 5 other hedge funds filed a complaint against JPMorgan Chase, Bank of America and others, alleging that they aided and abetted Thomas Petters’ $3.7 billion Ponzi scheme. They claim they lost $177 million in the scheme. The plaintiffs are: the plaintiffs: Ritchie Capital Management LLC; Ritchie Special Credit Investments Ltd.; Rhone Holdings II Ltd.; Yorkville Investment I LLC; Ritchie Capital Structure Arbitrage Trading Ltd.; Ritchie Capital Management Ltd. The defendants are: JPMorgan Chase & Co.; JPMorgan Chase Bank NA; JPMorgan Private Bank; Wells Fargo & Co. as successor by merger to Wachovia Capital Finance (Central); Wells Fargo Bank NA; Wachovia Capital Finance Corporation Central; UBS Loan Finance LLC; UBS AG; UBS AG Stamford Branch; Merrill Lynch Business Financial Services Inc.; LaSalle Business Credit LLC; Bank of America Business Capital; Bank of America Corp.; The CIT Group Inc.; The CIT Group/Business Credit Inc.; PNC Bank NA; Fifth Third Bank; Webster Business Credit Corporation; Associated Commercial Finance Inc.; Chase Lincoln First Commercial Corporation; Richter Consulting Inc.

     As reported in The Ponzi Scheme Blog, a broader reading of the Ponzi scheme presumption was upheld in connection with the Thomas Petter case in the Stoebner v. Ritchie Capital Management, L.L.C. (In re Polaroid Corp.) litigation. The appellate court affirmed the bankruptcy court’s finding that the Ponzi scheme presumption can be applied to find fraudulent intent by attributing the requisite intent to a controlling entity.

     The jury in the trial on the SEC lawsuit against the Thomas Petters’ hedge fund manager, Marlan Quan and Quan’s companies Acorn Capital Group and Stewardship Investment Advisors, came back with a mixed verdict. The SEC had sued Quan in 2011, alleging that Quan had misled clients in putting money into the Petters’ scheme and that those investors lost $221.4 million in the scheme. The SEC was seeking the return of $33 million in commissions paid to Quan. The jury found that Quan had breached 5 of the 7 securities laws, but cleared him on another count and an aiding and abetting claim. The SEC said that based on the verdict, it will seek a fine and a court order restraining Quan’s activity in the securities industry.

     The Antiguan-based receiver of the R. Allen Stanford and Stanford International Bank Ponzi scheme has sent letters to local victims threatening to sue them for money they received from the scheme.

     The United States Supreme Court, on a 7-2 vote, ruled that class actions by victims of the Allen Stanford Ponzi scheme may proceed in state court against Chadbourne & Parke and Proskauer Rose and insurance brokerage Willis Group Holdings Plc. Chadbourne & Park LLP v. Troice, 2014 U.S. LEXIS 1644 (Feb. 26, 2014). The defendants in those actions had argued that the lawsuits were barred by the Securities Litigation Uniform Standards Act (SLUSA), but the Supreme Court declined to extend the reach of SLUSA to apply to their claims.
 
     Thirteen members of the New Birth Missionary Baptist Church who were victims of the Ephren Taylor Ponzi scheme settled their claims against Taylor and Bishop Eddie Long. The parishioners accused Long of encouraging them to invest in Taylor’s company which turned out to be a Ponzi scheme. The victims lost more than $1 million investing in ventures that did not really exist. Taylor had guaranteed 20% returns. The SEC had charged Taylor with running an $11 million Ponzi scheme in 2012.

The Bankers Manifesto of 1892

Arthur de Rothschild (1851-1903)

The Bankers Manifesto of 1892 Revealed by US Congressman Charles A. Lindbergh, SR from Minnesota before the US Congress sometime during his term of office between the years of 1907 and 1917 to warn the citizens. "We (the bankers) must proceed with caution and guard every move made, for the lower order of people are already showing signs of restless commotion. Prudence will therefore show a policy of apparently yielding to the popular will until our plans are so far consummated that we can declare our designs without fear of any organized resistance. The Farmers Alliance and Knights of Labor organizations in the United States should be carefully watched by our trusted men, and we must take immediate steps to control these organizations in our interest or disrupt them. At the coming Omaha Convention to be held July 4th (1892), our men must attend and direct its movement, or else there will be set on foot such antagonism to our designs as may require force to overcome. This at the present time would be premature. We are not yet ready for such a crisis. Capital must protect itself in every possible manner through combination (conspiracy) and legislation. The courts must be called to our aid, debts must be collected, bonds and mortgages foreclosed as rapidly as possible. When through the process of the law, the common people have lost their homes; they will be more tractable and easily governed through the influence of the strong arm of the government applied to a central power of imperial wealth under the control of the leading financiers. People without homes will not quarrel with their leaders. History repeats itself in regular cycles. This truth is well known among our principal men who are engaged in forming an imperialism of the world. While they are doing this, the people must be kept in a state of political antagonism. The question of tariff reform must be urged through the organization known as the Democratic Party, and the question of protection with the reciprocity must be forced to view through the Republican Party. By thus dividing voters, we can get them to expand their energies in fighting over questions of no importance to us, except as teachers to the common herd. Thus, by discrete action, we can secure all that has been so generously planned and successfully accomplished."


THE BANKERS' MANIFESTO OF 1934 From New American, February, 1934. "Capital must protect itself in every way, through combination and through legislation. Debts must be collected and loans and mortgages foreclosed as soon as possible. When through a process of law, the common people have lost their homes, they will be more tractable and more easily governed by the strong arm of the law applied by the central power of wealth, under control of leading financiers. People without homes will not quarrel with their leaders. This is well known among our principle men now engaged in forming an IMPERIALISM of capital to govern the world. By dividing the people we can get them to expend their energies in fighting over questions of no importance to us except as teachers of the common herd. Thus by discrete action we can secure for ourselves what has been generally planned and successfully accomplished."

Must Know Information,please forward...

All tradable Securities must be assigned a CUSIP NUMBER before it can be offered to investors.  Birth Certificates and Social Security Applications are converted into Government Securities; assigned a CUSIP NUMBER; grouped into lots and then are marketed as a Mutual Fund Investment.  Upon maturity, the profits are moved into a GOVERNMENT CESTA QUE TRUST and if you are still alive, the certified documents are reinvested.  It is the funds contained in this CESTA QUE TRUST that the Judge, Clerk and County Prosecutor are really after or interested in!  This Trust actually pays all of your debts but nobody tells you that because the Elite consider those assets to be their property and the Federal Reserve System is responsible for the management of those Investments.

Social Security; SSI; SSD; Medicare and Medicaid are all financed by the Trust.  The government makes you pay TAXES and a potion of your wages supposedly to pay for these services, which they can borrow at any time for any reason since they cannot access the CESTA QUE TRUST to finance their Wars or to bail out Wall Street and their patron Corporations.

The public is encouraged to purchase all kinds of insurance protection when the TRUST actually pays for all physical damages; medical costs; new technology and death benefits.  The hype to purchase insurance is a ploy to keep us in poverty and profit off our stupidity because the Vatican owns the controlling interest in all Insurance Companies.

You may receive a monthly statement from a Mortgage Company; Loan Company or Utility Company, which usually has already been paid by the TRUST.  Almost all of these corporate businesses double dip and hope that you have been conditioned well enough by their Credit Scams, to pay them a second time.  Instead of paying that Statement next time, sign it approved and mail it back to them.  If they then contact you about payment, ask them to send you a TRUE BILL instead of a Statement and you will be glad to pay it?  A Statement documents what was due and paid, whereas a TRUE BILL represents only what is due.  Banks and Utility Companies have direct access into these Cesta Que Trusts and all they needed was your name; social security number and signature.

Fourth Circuit Finds Good Faith in Ponzi Scheme Transaction

Posted by Kathy Bazoian Phelps

     What “good faith” means when someone accepts payments from a Ponzi scheme perpetrator is not clearly defined anywhere. Good faith becomes relevant when a trustee or receiver sues an investor or other recipient of funds from the Ponzi schemer during the course of the scheme on a fraudulent transfer theory. The transferee’s primary defense is the good faith value defense under Bankruptcy Code section 548(c) or applicable state law.

     The Fourth Circuit recently affirmed a bank’s good faith defense to a trustee’s fraudulent transfer claim in Gold v. First Tennessee Bank, N.A. (In re Taneja), 2014 U.S. App. LEXIS 3279 (4th Cir. Feb. 21, 2014), and in the process, helped move the discussion forward on how to evaluate and prove good faith.

     The importance of proving good faith for defendants in fraudulent transfer litigation is that it is a zero sum game. If they prove it, along with value provided, they win. If they can’t establish good faith and value, and the plaintiff otherwise proves the prima facie case, the defendant loses. The purpose of the good faith defense is to let innocent transferees off the hook; if the recipient didn’t know and could not have known about the fraud, and gave something up in exchange, it is arguably not fair to hold that recipient liable to return innocently obtained property for which it has provided value. In other words, don’t hold liable the innocent, but require those “in the know” to return the money.

     The difficulty for courts in evaluating good faith is where to draw the “in the know” line. If the recipient actually knew of the fraud, the answer is easy – no good faith. But what if the facts are less clear? Does the court consider and how does it weigh:

• Red flag warnings?
• What Warren Buffet would have known?
• What an elderly uneducated homemaker would have known?
• What someone similarly situated to the transferee would have known?

     And what if the recipient isn’t an investor, but is a well-established financial institution? Does the analysis change? Banks are generally just running a business and are paid fees or loan repayments by Ponzi scheme perpetrators as part of its ordinary business operations. Or were they? 

     That was the question in Taneja. First Tennessee Bank had extended a line of credit to the debtor on which the debtor made some payments. Although the bank ultimately lost more than $5.6 million, the trustee sued the bank to recover payments made on the line of about $4 million. 

     The Fourth Circuit reviewed and affirmed the findings of the Bankruptcy Court, some of which the court recited as follows:

• The bank did not have any information that would [reasonably] have led it to investigate further, and the bank's actions were in accord with the bank's and the industry's usual practices.
• The bank did not have any actual knowledge of the fraud Taneja was perpetrating on it and others.
• The bank did not have any information that would [reasonably] have led it to investigate further.
• The bank's actions were in accord with the bank's and the industry's usual practices.

     The Court further reviewed the testimony of the bank employees, adopting their explanations of:

• Why FMI's and Taneja's conduct did not raise indications of fraud despite FMI's failure to sell their mortgage loans in the secondary market in a timely manner.
• The severe decline in the market for mortgage-backed securities in 2007 and 2008, which provided additional objective evidence of the state of the warehouse lending industry during that period.
• The bank’s additional investigation into the collateral securing some of FMI's loans and that they did not discover any problems at that time.

     The Court then reviewed the following evidence submitted by the trustee which the trustee argued should have alerted the bank to the fraudulent scheme:

• FMI's delay in providing collateral documents to the bank in connection with some of FMI's mortgage loans.
• FMI's failure to sell many of its mortgage loans in the secondary market
• FMI, rather than secondary purchasers, directly made payments to the bank on certain loans
• Taneja told that one of FMI's loan processors had left FMI unexpectedly, resulting in delays in FMI's production of its mortgage loan documentation
• In a meeting between the bank employee and Taneja's attorney, the bank asked whether FMI's unsold loans were fraudulent, and the attorney responded that the loans were valid and executed in "arms-length" transactions.

     The Court was not persuaded by the trustee’s arguments and found that such issues were “common” and “consistent” in this type of business relationship. In analyzing the appropriate standard to apply, the Court reiterated that both the subjective and objective components of the analysis of good faith should be applied, as it previously determined in its decision in Goldman v. City Capital Mortg. Corp. (In re Nieves), 648 F. 3d 232 (4th Cir. 2011). The Court’s standard in that case was:

Under the subjective prong, a court looks to "the honesty" and "state of mind" of the party acquiring the property. Under the objective prong, a party acts without good faith by failing to abide by routine business practices. We therefore arrive at the conclusion that the objective good-faith standard probes what the transferee knew or should have known taking into consideration the customary practices of the industry in which the transferee operates.

     The trustee in Taneja argued on appeal that “the bank, as a matter of law, was unable to prove good faith without showing that ‘each and every act taken and belief held’ by the bank constituted ‘reasonably prudent conduct by a mortgage warehouse lender.’" The Taneja Court, however, declined “to adopt a bright-line rule.”  It stated that it would not require:

that a party asserting a good-faith defense present evidence that his every action concerning the relevant transfers was objectively reasonable in light of industry standards. Instead, our inquiry regarding industry standards serves to establish the correct context in which to consider what the transferee knew or should have known. 

       The Taneja court also declined “to hold that a defendant asserting a good-faith defense must present third-party expert testimony in order to establish prevailing industry standards.

     There was a dissent to the Taneja decision, however, in which Judge Wynn stated, “Importantly, good faith has not just a subjective, but also an objective ‘observance of reasonable commercial standards’ component.” The dissent, while agreeing that the bank could meet its burden as to the objective component without presenting testimony on prevailing industry standards, disagreed that that the bank had met its burden without presenting any third party testimony. The dissent concluded that the employees’ testimony was evidence of their “subjective good faith, not of objective good faith, taking in consideration industry standards.” The dissent concluded that “the issue is whether First Tennessee Bank, which bore the burden of proof, failed to proffer any evidence or elicit any testimony to support a finding that it received transfers from FMI with objective good faith in the face of certain alleged red flags. It did.”

     Overcoming a defendant’s good faith defense is not an easy task, especially in the case of investor-transferees. Ponzi schemes tend to target and trap the elderly, retired, uneducated and unsophisticated. In such instances, the objective standard would be what an elderly unsophisticated investor would know, and not what Warren Buffet would have known. For more sophisticated investors, however, beware. Burying your head in the sand will not likely be tolerated.

How can a Corporation Sole establish credit to buy a house or car?

CORPORATION SOLE v 501(c)(3)

Let's begin this comparison by citing some of the features of the Religious Organization - otherwise known as the 501(c)3 and compare it with the Corporation Sole:

1. A Church, which is defined as the Body of Christ, chooses to voluntarily remove itself from its rightful Head, the Lord Jesus Christ and place itself under a foreign head, the State of (Insert whatever State you live in) and the IRS when it applies for 501(c)3 status.
2. As a Church, it had all the Constitutional Rights guaranteed by the United States Constitution: Freedom of Speech, Press, Assembly, Right to Due Process, Privacy, etc. Once the decision was made to legally change the status of the Body of Christ from Church to "Religious Organization" [i.e. 501(c)3 under the Internal Revenue Code], it lost every one of those rights and now only has privileges - temporary advantages granted by the state and can be revoked at the will and pleasure of the state - should the "Religious Organization" violate "Public Policy" as did Bob Jones University a few years ago.
3. As a "Religious Organization" [ 501(c)3] - granted said status by the Internal Revenue Service, it has very restricted and limited actions: a) it must be accountable to the IRS every year and file the appropriate form to insure said accountability to the Government; b) its funds are restricted in use - they cannot be used for "political" purposes - the definition of "political" being highly subjective and dictated by the Government; c) doctrines of the "Religious Organization" must be in conformity with stated "Public Policy" of the Government - otherwise, the nonprofit status is revoked by the IRS; and finally, the worst feature of all: the Church of Jesus Christ is now subject to a GODLESS HEAD - the State and the IRS - all done voluntarily since IRS Publication 557 is quite clear: Churches [not "Religious Organizations"] are not required to become a 501(c)3 in order to have contributions and donations become tax deductible.
4. Churches need to have some kind of legal existence in order to hold property and to conduct the business affairs of the Body of Christ. By far, the best vehicle to accomplish these purposes is a Corporation Sole. The Corporation Sole has been used since the signing of the Magna Charta to hold property and to conduct business in the name of the Body of Christ. Established by common law contract, it maintains the separation of Church and State guaranteed by the First Amendment to the Constitution. A Corporation Sole is not formed by the Government, is not granted legal status by the Government, nor is it held accountable to the Government for its day-to-day operations and/or financial dealings.
5. The Corporation Sole is mandatorily excepted from filing tax returns pursuant to 26 USC § 508 and 6033.
6. The Corporation Sole reserves all of its rights under the Constitution and is faithful to its calling as a witness to its rightful Head, the Lord Jesus Christ.
7. The 501(c)3 has NO IMMUNITY from government inspection of books and records. The Church, under a Corporation Sole, has all the privileges and immunities [i.e.; 4th and 5th amendment protections of privacy of books and records as well as right to remain silent].
8. The 501(c)3 has restrictions on hiring and firing within the framework of "Public Policy [i.e.; cannot refuse the hiring of homosexuals who apply for work with the "religious organization"]. Conversely, the Church, under a Corporation Sole, has complete authority to hire and fire whoever it desires to work for the church.
9. The 501(c)3 can be represented in court ONLY by an attorney. The Church, under a Corporation Sole, can be represented by the Overseer and an attorney as co-counsel or just by the Overseer by himself. Once an attorney has been hired by the 501(c)3, the court has been granted jurisdiction over the case.
10. The 501(c)3 religious organization must apply for and be granted legal status by the IRS and the domicile state. The Church, under the Corporation Sole, has its status granted by its Head, the Lord Jesus Christ. Once the Church surrenders its Headship to the IRS and the State, it has lost all its rights, privileges and immunities under the Constitution of the United States.
11. The 501(c)3 must withhold and collect taxes from its employees and forward to the government. The Church, under the Corporation Sole, has the option of not withholding and collecting taxes from its employees and submitting same to the government.
12. In summary, the Church maintains its spiritual integrity by remaining a Church under the Corporation Sole. By applying for, being granted and operating under 501(c)3 status, the Church has relinquished its freedom under its Head and has chosen to be under a different head: the government.


The following is a report of a discussion of Corporation Sole
for the financial services and asset protection for Professionals:
Recently, there has been a lot of information and misinformation passed around among estate planners and investment consultants regarding the Corporation Sole. Corporations Sole have been around for over 450 years, so they are not a "new kid on the block". Corporations Sole are used primarily for holding and passing the title for property belonging to a church, religious society, or charitable organization. Two examples of well-known Corporations Sole are the Brothers Winery and the Sierra Club. Because you will be asked about Corporations Sole, if you haven't already been asked, I'll share a little background information on Corporations Sole and you may be able to decide if or how they fit in with the estate planning strategies that you provide for clients. This discussion is the result of five years of studying Corporations Sole, and writing Corporations Sole for dozens of clients. In this learning curve, I have studied the documents written by most of the current Corporations Sole gurus. In various ways and to varying degrees, I find that there is a general lack of understanding of the historic usage of the Corporation Sole, even among the so-called "gurus". There is also a lack of understanding of the statutes regarding Corporation Sole that results in most cases in giving away of the potential benefits gained by this unique form of corporation.

People use corporations when they need a means of limiting liability. Normal corporations are a creation of the state, and begin their existence on the date that the state incorporates them. Normal corporations owe their existence and allegiance to the government. Corporations "live" forever unless limited by their own Articles of Incorporation. Normal corporations require several officers, they have boards of directors, stockholders, annual fees, annual reports, and operate under many statutory regulations.

People use trusts when they need a means of protecting assets. Trusts are used when one person entrusts another person with some valuable asset or a right. The asset or right must be sufficiently identified for title to pass to the trustee and title must actually pass to the trustee. The asset or right, therefore, belongs to the Trustee and is not returned into the ownership of the original owner [trustor] or a designated beneficiary until the trust terminates on a stipulated date. The reason why assets placed in trust are not liable for claims against the trustor or for taxes of the trustor is because the property really does not belong to the trustor. Trusts are not perpetual and they are limited by statute to a certain number of years [20, 30, 99 years, etc.]. There are laws against perpetual trusts in virtually most, if not actually all, jurisdictions.

Wouldn't it be nice if we could have an organization that has the advantages of limited liability of a corporation, without the regulation, without the multiplicity of offices of a corporation, for an organization that the government does not create (therefore the organization does not have its allegiance to the state), and also allows the organization to function as a perpetual trust in order to protect and convey assets for many generations? Carefully reading and comparing the State Corporation Sole statutes, a good Corporation Sole instrument, and the "Certificate of Existence" [not: "Creation" issued by the Secretary of State], show that the Corporation Sole can be everything that is listed above. Are all Corporation Sole documents equally serviceable? Many documents that do meet a State's requirements are so poorly written that they give away all of the advantages recognized in the first amendment's "free exercise [of religion]" clause. Some Corporation Sole documents even attempt to form a contract with "the ALLEGED state of [State]." Under UCC 1-203, Good Faith is a requirement in all contracts. Because it is not possible, in my opinion, to operate in good faith when one is alleging that the other party may or may not exist, then that kind of Corporation Sole instrument is inherently flawed and the courts will eventually walk right through them and seize all of the assets that the corporation accumulates. I have friends who (in the past) had organized a church under a Corporation Sole and promptly applied for the IRS 501 (c)(3) status. Applying for permission for exemption under 501 (c)(3) voids the natural immunity against regulation found in the First Amendment to the Constitution as well as the Internal Revenue Code, section 508. In spite of some sad examples of poor planning, there are also some very solid Corporation Sole instruments that do hold up in the courts.

Being a "Corporation," the Corporation sole is by nature a form of limiting liability within the assets of the corporation. The State statutes on Corporation Sole stipulate that the property is held "in trust" for the membership of the organization. This makes this kind of corporation function as a trust! In fact, the Oklahoma statutes describing Corporation Sole are found in that state's trust successor provisions, with a waiver of the "rule against perpetuities".

One feature of religious societies is that they can accept vows of poverty by their members [Re; monks, nuns, priests and Overseers]. The IRS recognizes these vows of poverty. For a small part of the IRS information on Vows of Poverty, look at pages 3 and 8 in IRS Publication 517. When one is under a vow of poverty, the physical objects in their possession are not their own, although it may be their job to look after and use those objects. Thus, when you see a Catholic Bishop being moved between a cathedral and a golf course, he may be carried in a stretch limousine, but he is still under a vow of poverty that is recognized by the IRS and he is not questioned or bothered by the IRS. Virtually, all Catholic dioceses are organized as Corporations Sole.

One guaranteed way to fail in an attempt to avoid taxation is to work for W-2 wages and donate 100% of your income to a Corporation Sole of which you are the overseer. In cases like this, there is a contractual obligation not to exceed a certain percentage of one's income in charitable donations. Also, the IRS justifiably claims that the Corporation Sole is an "alter ego" of the W-2 wage earner, and liens, levies, and seizes all of the assets of the Corporation Sole. The best way to avoid this scenario is to never work for W-2 wages, but if you do, stay within the guidelines of the IRS when making donations to the sole. You may use other tax strategies for lowering the tax bite if you wish but please recommend that your clients protect their family assets by staying within the law (your contractual obligations). When the client eventually realizes that there is no way to safely reside within the tax system, they may want to get out of it completely with a Corporation Sole.

The religious society's property that is in the custody of the Overseer cannot be taken by a court for satisfaction of personal claims against the Overseer, because the property is held ONLY in the Overseer's fiduciary capacity. At one point in American History, the Patriarch of every household was legally considered as being the Overseer of a common-law Corporation Sole. In looking at this pattern, it appears that the U.S. Constitution's prohibition against "corruption of blood" is one of the legal foundations and supports for this concept. When no law can restrict the right, by blood relationship, for your children to inherit the fruits of the parent's labor, this is identical in precept to no law being able to take away the right of future members of your congregation or religious order [family religious unit] to use and enjoy the property of previous generations. Quite obviously, the founding fathers of America thought of the family as the basic religious unit of society. We are therefore acting as a fiduciary for our grandchildren and the family property is not ours alone but belongs to the family. Taxation is the only means for governments to work "corruption of blood". Because no law may impair obligation of contracts and when one places their family?s property under contract (mortgage or otherwise), that property is no longer protected by the "corruption of blood" provisions. The primary contract that compromises our right of owning property is the Social Security Number.

One of the most difficult contracts that one must deal with is the UCC's "holder in due course" issue regarding the Federal Reserve Notes (FRNs). The Corporation Sole Vow of Poverty (? These are two separate options: MM) deals with this issue better than any other method that I have seen. By not owning anything, we can be carrying pockets full of FRNs, be in charge of massive investment accounts, and still have no personal liability for the bankruptcy nature of the Federal Reserve Notes [United States Bankruptcy debt instruments].

During the "transition phase" out of a life that is completely under government regulation and control and into a life of liberty and privacy, it would appear that the Corporation Sole could be a valid and valuable tool for many traditional family units, both as a limit on liability and for protection of family assets.


What is a Church?
IRS Publication 557, Tax-Exempt Status for Your Organization, states: "Because beliefs and practices vary so widely, there is no single definition of the word "church" for tax purposes." The inability of the IRS to define the word church has a large part to do with the First Amendment to the Constitution of the United States of America. Black's Law Dictionary, fourth edition, defines the word "church" as the following: "In its most general sense, the religious society founded and established by Jesus Christ, to receive, preserve, and propagate his doctrines and ordinances." Black's 7th edition does not define the word "church", this is interesting because this edition is the current dictionary used by Lawyers and Judges at the time of this writing.


IRS REGULATIONS REGARDING THE PRESIDING OFFICER
Section 6033 (a): This section exempts religious organizations from the need for filing returns of any kind. 6033 (a)(2)(I) provides for mandatory exceptions to filing requirements for religious organizations and states that filing requirements shall not apply to "churches, their related auxiliaries, and conventions or associations of churches"; 6033 (a)(2)(A)(iii) exempts as well "the exclusively religious activities of any religious order".
Explanation: Under 6033, your church or religious order has complete immunity to disclosure. It is not necessary for you to maintain records of any kind except for your own purposes and reasons.
Section 107: In case of a minister of the gospel, gross income does not include: (1) the rental value of a home furnished to him as part of his compensation; or (2) the rental allowance paid to him as part of his compensation, to the extent used by him to rent or provide a home.
Explanation: In order to qualify for the exclusion, the home or rental allowance is remuneration for services, which are ordinarily the duties of a minister of the gospel. The rental allowance is for, the rent of a home, the purchase of a home, or expenses directly related to providing a home.
Section 3401 (A) (9): provides that the definition of the term "wages" for tax withholding purposes does not include remuneration paid "for services performed by a duly ordained, commissioned or licensed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order; etc."
Explanation: IRS regulations provide guidelines for IRS employees to help them understand the IRC. IRS Regulation 31.3401 (a) (9) (d) states: "Services performed by a member of a religious order in the exercise of duties required by such order includes all duties required of the member by the order. The nature or extent of such services is IMMATERIAL so long as it is a service that the minister is directed or required to perform by ecclesiastical superiors."
For Example: If Father McLaughlin is directed by his order to work for the Federal Government in the Office of the President, then his employer (in this case, the Federal Government) is not under any compulsion whatsoever to withhold either federal income taxes or social security taxes. A religious order may require a member be an Advisor to the President, a pilot, or a bank loan officer. The regulation states that the nature or extent of such service is IMMATERIAL.
Publication 526: states that up to 50% of an individual's adjusted gross income are deductible for contributions to "qualified organizations". Corporation Sole, as a church is a "qualified organization".
Explanation: A person with W-2 earnings with an adjusted gross income of $30,000 may generally contribute up to $15,000 and claim such a deduction.
Section 1402 (c) (4): provides that "the performance of service by a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order", is not considered a "trade or business" when used with reference to self-employment or net earnings from self-employment.
Explanation: An auto mechanic, gardener, or medical doctor may be self-employed. If the religious order of which one is a member directs one to undertake duties in one's field of training or experience, as a self-employed person, then any income received is not taxable as income from a "trade or business".
Publication 15, 1978 Circular E: Employer's Tax Guide is distributed free of charge by the IRS. Page 11, states "Members of religious orders who have taken a vow of poverty performing duties required by the order are exempt from income tax withholding and from social security.
Explanation: Publication 517, p. 2 and 5. When one is under a vow of poverty, the physical objects in their possession are not their own, although it may be their job to look after and use those objects. Taking a Vow of Poverty to the Corporation Sole (or Religious Order, more likely - MM) means owning nothing, but controlling all, as a steward of God's property.
Section 1402 (e): exempts "a member of a religious order who has taken a vow of poverty as a member of such order" from taxes under the Federal Insurance Contributions Act, FICA or social security. There is no requirement that you file for this exemption from social security tax. The exemption is automatic when you are a member of a religious order and have taken a vow of poverty as a member of your order.
Under fundamental law, rights and privileges granted any church or religious order must grant all - everyone - the same rights and privileges. You have cause for prosecution under the U.S. Constitution if discrimination of or denial of rights has occurred to members of your church or religious order. Any person, including any government official, within the jurisdiction of the U.S. Constitution, who acts to prefer one religion to any other in an official capacity, is acting in violation of the Constitution. At the very least, a government employee may be dismissed for violating his oath of office to uphold the Constitution and he or she may be subject to civil and criminal penalties, with fines up to $10,000 or imprisonment up to five years, or both.



FAQ ( - USA)
Q. What NAME do I use?

A. The name that you use is important, it will describe the organization and the vision that you have for your Corporation Sole. A name should reflect an image of your intent with the use of Fellowship, Brotherhood, Services, Alliance, Ministries, Center, Awareness, Health and/or a name that would be used to describe the following titles; Church, Synagogue, Mosque or a name related to the religion practiced in them. NOTE: Do not use your personal name.

Q. Will I need my Social Security number for the Corporation Sole?

A. You will be provided with a 9 digit Federal Identification Number to open a checking account for the Corporation Sole. However, because you will be the signatory for the Corporation, some banks require your personal Social Security number to verify with the Banking Commissioners office to assure them that you personally have not had any banking fraud or checking fraud within your state throughout the past. You will find that not all banks require your SSN#. You may give it to them or refuse and go to another bank if you wish. It is not mandatory by law for them to require this; it is a policy of the bank that you choose.

Q. How can I be a church?

A. It may take some time to get used to the idea that you, personally, are the embodiment of a church. A church is not bricks and mortar, a church is a specific place to worship. Wherever you are is an appropriate place to worship. I recently saw a book titled, "My Monastery is my Minivan". Your body is your temple and you carry your beliefs and values with you wherever you go. In Black's Law Dictionary, one of the definitions for a church is: the clergy or officialdom of a religious body. Webster's Dictionary states that a religion is: a personal set of beliefs and practices held to with faith and ardor.

Q. What is a simple definition?

A. It is an unusual type of corporation consisting of only one person whose successor becomes the corporation on his death or resignation and therefore, lives on in perpetuity.

Q. What powers does a Corporation Sole have?

A.

Contract in the same manner as a natural person.
Sue and be sued.
Defend and be defended in all courts.
Borrow money and give promissory notes.
Buy, sell, lease, mortgage and in every way deal in real & personal property.
Receive bequests and income for its own use.
Appoint attorneys in fact.
Q. What are modern uses for a Corporation Sole?
A. The Catholic Church, the Mormon Church, the Queen of England, the Governor of Tennessee and YOU. The structure of the Corporation Sole is so flexible it can run a very large or a very small organization. It can run any business that in some way serves God, humans, animals, or the Earth. Even if you have an employer, the Corporation Sole serves you and your family/friends as you determine, maybe as a means of providing charitable endeavors, education for a child, estate planning, protection and privacy.

Q. How is it legal?

A. It is legal by its creation in common law internationally. Our right to religious freedom is protected by the Constitution of the United States of America in the First Amendment: "Congress shall make no law respecting the establishment of religion, or prohibiting the free exercise thereof?"
Corporation Sole is looked upon by the IRS as a "qualified organization". IRC §508(c)(1)(A), a church, among other specific types of "organizations", is not required to file Form 1023 and obtain a 501(c)(3) designation to be tax exempt. (It is listed as a Mandatory Exception to taxation.) IRC Section 6033 is illustrative of the separation of church and state by pointing out that religious organizations are exempt from filing returns of any kind and there are no record keeping requirements. (In fact, it is a Mandatory Exception to the rule for filing returns.)
Exception means "there is no law". IRC § 6043 states that if an office holder in the Corporation Sole finds themselves emotionally, spiritually, financially or personally unable to keep their commitment to the mission and they do not wish to name a successor, they may terminate it without filing a return regarding liquidation, etc. The Corporation Sole does not report to the IRS, it reports to the Creator!

Q. Is there a difference between legal and lawful?

A. Yes. In the simplest of terms: To say of an act this is "lawful" implies that is authorized, sanctioned, or at any rate not forbidden by law. To say that is it "legal" implies that it is done or performed in accordance with the forms and usages of law, or in a technical manner. Lawful more clearly implies an ethical content than does legal. The word legal is used as a synonym of constructive, which lawful is not. Laws are made in the democracy, so legal is the rules the federal government places on its citizens.

Q. How long does it take to create a Corporation Sole? (This is OUR version of the response - MM)

A. Within two business days of receipt of the application and payment, and subject to the information provided not leading to further queries, you will be sent the Corporation Sole Charter by Express Post (3 business days within the USA). It requires the signatures of the Overseer, Secretary and two witnesses. You will also receive brief Guidelines (the information on the website will continue to be updated and represent your main information base). The longest wait will be in your applying for and getting the EIN from the IRS.

Q. Why doesn't everyone use a corporation sole - if it is as good as you say?

A. Corporation Sole has been around since the year 1215. It is not a "new kid on the block" for asset protection. The reason why it is not widely known about or used is that its use eliminates the need for attorneys, CPAs and other professionals usually associated with more traditional types of legal entities.

Q. Does every state recognize the Corporation Sole from another state?

A. Yes, even in states that have no statutes concerning the CS, they recognize the legal existence of the Corporation Sole from another state on account of the Law of Comity - which says that there is common agreement among all the 50 states to honor and recognize the legal status of each state's documents [i.e.; corporations, marriage licenses, driver licenses].

Q. All of this sounds too good to be true--how come my attorney and my CPA have never even heard of the corporation sole?

A. Most accountants and lawyers will confuse Corporation Sole with a "non-profit" or "not-for-profit" organization formed under IRS 26 U.S.C.S. 501 (c)(3) and fight with or re-characterize your objectives. It must be emphasized that the Corporation Sole is different from a "non-profit" or "not-for-profit" organization in almost every conceivable way. Asking a lawyer or accountant to educate him/herself can become extremely costly, nevertheless, please seek a competent advisor. Professionals in the field of taxation, accounting and asset protection sometimes have a tendency to stick with the familiar, the known, the most lucrative choices - when it comes to what they offer to you, the consumer. However, the consumer is always cautioned to "BE AWARE!" So, our advice to you is: Do your "Due Diligence" - check everything out, get all of your questions answered to your satisfaction - you have a right to know ALL the facts prior to moving on any decision concerning your financial and spiritual decisions.

Q. What should I tell my CPA or attorney?

A. For the most part, these professionals will not understand the Corporation Sole. It is not taught in traditional schools that teach statutory law. Your CPA can simply continue to keep the books for you, if you choose to keep books for your knowledge. They can even prepare year-end statements for you. The statements go only to you. You can take the time to educate your attorney about the Corporation Sole, if you wish.

Q. If I check with the IRS, what will they tell me about corporation sole?

A. Most lower level IRS employees do not know about the Corporation Sole. However, the Internal Revenue Code does address the corporation sole directly in §508 and §6033. Those sections state that churches and their integrated auxiliaries are MANDATORILY EXCEPTED FROM FILING. Further, the Constitution First Amendment says that Congress shall make NO LAW concerning the establishment of religion nor the free exercise thereof. So neither Congress nor the IRS has the power to regulate or control a corporation sole. When the IRS Form SS4 is completed to obtain the EIN for the CS, it is made clear that the Corporation Sole is: a) mandatorily excepted from filing; b) it is applying for an EIN for banking purposes only; and c) application is being made for a NONREPORTING EIN.

Q. How does a Corporation Sole compare with a 501(C)(3)?

A. The IRS grants a tax-exempt status to certain organizations that perform nonprofit functions that support governmental PUBLIC POLICY. Churches, which by definition are IMMUNE from taxation, voluntarily apply for tax exempt status under the Internal Revenue Code, become incorporated under the state where it resides, waives all of its constitutional protections, and becomes a ward of the state by becoming a "religious organization" under Internal Revenue Code §501(c)3. The other option, open to the church is to form a corporation sole, which by definition, is an unincorporated association, given legal status and existence by the state, created by God Himself, subject only to Him, is tax immune, and does not answer to the state since it is not created by the state - in contrast to the 501(c)3 which has voluntarily subjected itself to the godless state and godless IRS. The Corporation Sole still has all the constitutional protections provided by the Constitution. The 501(c)3 is forever dependent upon the good graces of the government for its continued existence as long as it operates within PUBLIC POLICY as defined by the government. The Corporation Sole is never subject to the government for its existence and answers to its Creator for its actions.

Q. What if I already have a 501(c)(3) organization?

A. There are procedures in the regulations of non-profit organizations that you can follow to terminate this designation. At the same time you can change the name slightly and continue your mission as a Corporation Sole. The relief from the reports and scrutiny are worth it. Is your covenant with God or the government? Which will be the most beneficial to the mission?

Q. Can a 501(c)(3) become a Corporation Sole?

A. Yes, but not in those terms. A presently organized 501 non-profit tax-exempt corporation can be closed or phased out once your Corporation Sole is established. You simply begin to operate under your Corporation Sole and begin to factor out the 501. You may need to speak to the attorney who maintains the corporate books and seal to explain this action and direct him to eliminate your accountant, but, it will be necessary for you to maintain the records of the Corporation Sole should you ever be challenged in court. Although, you do not have to show records of the CS, it is important that you can answer the court under oath that you have maintained records for the Sole.

Q. Can a Corporation Sole accept charitable donations?

A. Yes. IRS Publication 526 indicates that "qualified organizations" can accept charitable donations simply by virtue of being a church. Churches do not need to apply to be a "qualified organization." The Corporation Sole can take tax-deductible donations for its mission. It qualifies as a 50% organization, meaning that the deduction for a taxable person's charitable contributions can be 50% of their adjusted gross income for the year. If you work for W-2 wages and are the office holder in a CS, you could donate 50% of your adjusted gross income to the Corporation Sole for its mission. If you work for 1099 wages, the 1099 can be made out to the Corporation Sole and will be tax-free.

The Corporation Sole can make charitable donations to other organizations, too, with NO reporting requirement. When accepting a tax-deductible donation for the CS, it is important to write a formal letter of acceptance to the contributor. It must have the name of the CS, the business address of the CS, the amount of the donation and a general statement accepting the donation of goods or monies on behalf of the Corporation Sole to be used to further the mission.

Q. Can the Corporation Sole run a business?

A. Yes, a corporation sole can do everything a flesh and blood person can do except give blood! However, when a Corporation Sole owns and runs a business, it must do so through an EIN issued by the IRS and must not have employees. At least two options are open to the Corporation Sole to avoid employer-employee relationship: a) have everyone do business with the Corporation Sole via a private contract; or b) have a third party leasing company provide employees leased to the CS.

Option 1: The Corporation Sole can enter into a contract with an existing business to be the fiduciary or administrative/managerial head of the business so all profits go to the Corporation Sole tax-free. If the business is set up as an LLC, S or C Corp. (we would recommend a Nevada Corporation, there are reporting requirements for those entities even though there is no tax liability. You would be exposing the Corporation Sole as the head of the business. Not a problem, but you give away some privacy. The Corporation Sole could "buy" the existing business, the former business would close on paper, following the IRS guidelines for closing or ending this entity. There are many strategies to accomplish the goal in privacy.
The Corporation Sole owned business could continue with a slightly different name. Example: Holistic Care Center, LLC is sold to Holistic Care Ministry/Mission/Foundation/Affiliation/Group/Assembly/Community Center or HC Group, etc. The Holistic Care Center, LLC is closed according to the guidelines for your state. Avoid standard commerce terms for the Corporation Sole such as services, company, corporation, etc. Think of the Apostle Paul who was a tent-maker. The Corporation Sole can run a business to provide a means to follow its mission. It can be a grocery, contractor, carpenter, department store, school, medical office - just about anything you can think of that is legal and lawful.

Option 2: It is better to have independent contractors working for the Corporation Sole and give 1099s if the person wants one. The Corporation Sole is not obligated to give 1099s. It is better not to have the type of employees that require/desire withholding of taxes, etc., so that you cut down on paperwork and eliminate reporting exposure.

Q. Can a Corporation Sole get a business licence, or should it?

A. If the license is for a business which must have a license in order to do business, it would be appropriate. Examples would be contractors and medical offices. If you are speaking of a broker's license, the Corporation Sole cannot, because those are issued to individuals and not businesses. Local laws will establish if a Church HAS to get a license. Check with your city or county laws in the area in which you live/operate.

Q. Can a W-2 employee utilize a CS?

A. Yes, a W-2 employee can contribute up to 50% of his/her income to the Corporation Sole - and claim that 50% as a tax deduction pursuant to 26 USC, § 170. Further, that W-2 employee can choose to take a Vow of Poverty, and thereby stop all social security and Medicare deductions.

Q. What about my retirement accounts?

A. In some instances, retirement accounts can be transferred or assigned to the Corporation Sole. You will have to check with your IRA trustee. Some will allow a trustee-to-trustee transfer. Some IRAs will only allow the beneficiary to be the CS, but not the change of the account holder. That would mean that if you are not "untaxed", you would be responsible for the tax on the 50% that could not be donated to the Corporation Sole. You could withdraw the entire amount now, pay the early withdrawal penalty, and put the money in the Corporation Sole. You would only be able to claim a 50% charitable donation on your taxes. Take your time and look at the pros and cons of this financially.

Q. Can I put all of my assets into the Corporation Sole?

A. Anything that you own - money, real estate, personal property - can be donated to the Corporation Sole. If there is one or more particular items that would create liability exposure for the Corporation Sole, it would be better to put that/those items into a separate Corporation Sole.

Example: The Eye Center has a van that picks up patients from their home and transports them to the Center for surgery. After surgery, the van again transports them home. This van would need to be a Corporation Sole of its own, because it presents a significant risk, it is a high liability item. By isolating it in its own CS, should there ever be an accident and litigation, none of the other assets of the umbrella Corporation Sole could be discovered or touched. For that very same reason, large estates or businesses should consider more than one Corporation Sole and divide assets into them appropriately. Example: A large physician group would have one umbrella Corporation Sole for the practice and each individual physician would have one or more of his own Corporation Soles. [did you know that each commercial airliner is a corporation, therefore if the plane crashes, all the assets are gone, and nothing will be paid out in liability as there is no asset to liquidate! The airline itself is not liable - sounds similar: MM]

Q. Can the corporation sole be an effective means to provide asset protection?

A. Yes, once both real and personal property is placed in the Corporation Sole: a) it is not subject to lien or levy; b) is not subject to inheritance tax or gift taxes; c) is not subject to probate; d) is not subject to estate taxes.

Q. How are assets transferred into the Corporation Sole?

A. Cars, boats, trailers, campers, etc., are transferred in by title. This can be done with a simple "bill of sale" or "sale of motor vehicle" document that can be purchased from an office supply store. The cost is listed as "gift", no money exchanged. You can also use the forms offered at this site. These forms can be modified to meet your needs and can be typed up on your own computer. Always follow the requirements of your local city, county and state; sometimes they require you to use their forms. Most title companies will accept any document agreed to by both parties. Since both parties are you, the individual and you, the office holder, agreement should be easy to reach! Real estate is transferred by deed. If there is a pre-existing mortgage, you will want to transfer the "equity interest" into the Corporation Sole using a standard Quitclaim Deed which can be purchased at an office supply store.

Q. How do I transfer personal property into the Corporation Sole?

A. Personal property, without encumbrances, can be transferred into the Corporation Sole with a letter stating that all personal property, household goods, furnishings, etc., previously owned by Mary Jones and located at (add physical address of property) is tithed to the Corporation Sole as a gift of love and appreciation. You may want to itemize very valuable items such as coin collections, art, jewelry, etc. This letter can be notarized or witnessed by two people who have no interest in the property. The letter is then kept with the Corporation Sole Charter. It is not necessary to list everything as long as it is clear what is YOUR personal property. If you are married or living with someone, the lines may not be clear as to who owns what as personal property. Under these circumstances, a list would be prudent.

Q. Once I put something in the CS, can I get it out?

A. Yes. As the Overseer of the CS, you can buy, sell, trade or donate any property, real or personal. Transferring property out of the Corporation Sole may create a tax liability for the person or entity receiving it.

Q. How can a Corporation Sole establish credit to buy a house or car?

A. One way to do it is to pay mortgage and car payments from the Corporation Sole bank account. The creditor doesn't care who makes the payments as long as they get paid. After 6-9 months of making payments from the Corporation Sole account, you can approach a creditor with the payment history. Often you can get a low-limit or secured credit card in the name of the Corporation Sole very soon after establishing a checking account with a bank.

Q. Can creditors attach my assets for the Corporation Sole and vice versa?

A. When you form a CS, you must picture yourself as two distinct people and so must your creditors. The assets in the Corporation Sole belong to the church and you are the caretaker of these assets, not the owner. The Corporation Sole assets are not attachable for anything you do as an individual. You, as an individual, are not attachable for anything that is in the Corporation Sole. What belongs to one does not belong to the other. They are separate and distinct. The Corporation Sole can pay your personal debts, if you, the office holder, deem it appropriate to do so. Is it in the best interest of the Corporation Sole for it to pay the mortgage on your home and the loan on your car and provide you with necessities and even luxuries of life? The Creator God wants you to be prosperous and joyous that you may add light to the world. Your personal assets donated to the Corporation Sole are sacred and cannot be touched by anyone other than you.

Q. Does the property owned by the corporation sole pay property and sales taxes?

A. Property owned by the Corporation Sole is not subject to property taxes. However, one must go through the proper channels to make application to the county taxing authorities to exempt the property from taxation. Depending on your zoning ordinances and county assessor, the property can be rezoned or taken off the tax roles (can you have a commercial property in your residential area?). Consider whether the amount of the property tax is great enough for you to want to petition for exemption. Sales tax is much the same and can depend on city, county and state ordinances.

Q. If the Corporation Sole owns real estate property and sells that property, does it owe capital gains taxes?

A. No, it does not since it is not subject to taxation by the government.

Q. Can the Corporation Sole sue and be sued?

A. Yes, just as a natural person, a corporation sole can sue or be sued. However, in most cases, because the Corporation Sole is not directly involved in commerce, it is much less likely to be sued unless property owned by the Corporation Sole damages a person or that person's property. In that case, the Corporation Sole has a legal and moral obligation to restore that person and his/her property to wholeness whenever and wherever possible.

Q. Can I still get insurance on things in the CS?

A. Yes. The Corporation Sole in the banking world is considered a business entity and so all insurance of items qualifies as being owned by the business and standard insurance is available as such. Some State Farm Bureau Insurance agencies have been helpful, but I would check with your own insurance company first.

Q. What other kinds of things can go into the CS?

A. You will want to change the beneficiaries on insurance and accident policies to the Corporation Sole. Also you will want to change ownership of stocks, bonds and all types of investments.

Q. Can more than one person be the Overseer and/or have access to the Corporation Sole bank account?

A. No, by definition, a Corporation Sole is a ONE man corporation and only ONE person [male or female] can be the Overseer at one time. Usually, if the husband is the Overseer, it is recommended that the wife be the Secretary; if the wife is the Overseer, then the husband would be the Secretary.

Q. What if I am married? Can we do the Corporation Sole together?

A. No. The Corporation Sole is a one-person organization and only one person has control of what is in the Corporation Sole. One spouse could have a Corporation Sole that runs his or her personal business and owns their personal property. Property now held in both names cannot be put into the Corporation Sole unless both agree and it would then be under the control of the officer of the CS, one person. When a spouse does not want to form a CS, the house could remain in both names and a Quitclaim Deed transferring 50% of the equity interest to the Corporation Sole could be done. Each individual may also form their own Corporation Sole and a division of assets could be determined for the purpose of transferring titles or deeds.

Q. What happens if the Overseer dies unexpectedly - who is the Overseer then? (Amended - MM)

A. In consultation and prayer, the Secretary (or Registered Agent in some States) and close associates of the religious organisation where he holds office (perhaps relatives and friends of the deceased Overseer) will appoint a new Overseer according to the terms of the Charter.

Q. What happens if I have 4 children - how do I as Overseer, pass on to my children any inheritance?

A. Legally, any assets placed in the corporation sole no longer belong to the donor. However, these same assets are available for the use of anyone the Overseer sees fit to bless. At least two options are open to bless the 4 children: a) establish 4 corporations sole - one for each of your children, and transfer any assets from one Corporation Sole to another; or b) one of your children would be appointed Overseer and, by contract with the other three, would provide for their access to use the assets held by the corporation sole.

Q. I looked on the internet and some sites call the corporation sole a scam and "tax protestor" tax avoidance scheme - and that the IRS is shutting them down and putting people in jail. Is this true?

A. For some strange reason, people tend to think that if something is on the Internet, it must be true. Nothing could be further from the truth! On the Internet, as well as every other marketplace, it is "Buyer Beware!" - which simply means check things out, take your time to get all your questions answered to your satisfaction, get all sides of the issue exposed to the daylight. If one does that, where the Corporation Sole is legally and morally presented in the context of its true nature as the church, it will emerge as the "Best of the Best" for asset protection.