August 2015 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

    Below is a summary of the activity reported for August 2015. The reported stories reflect: 3 guilty pleas or convictions in pending cases; over 39 years of newly imposed sentences for people involved in Ponzi schemes; at least 3 new Ponzi schemes involving over $143 million; and an average age of approximately 59 for the alleged Ponzi schemers. 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.

    Bryan Anderson, 41, was sentenced to 7 years and 3 months in prison in connection with a Ponzi scheme to which he had previously pleaded guilty. Anderson defrauded a dozen investors out of more than $3 million. During most of the scheme, Anderson was a registered financial broker working with MetLife Securities and then Pruco Securities.

    Roland Barrera, a bar owner, was ordered to pay a $150,000 penalty for breaking federal regulations when he helped persuade a businessman to invest $3 million in a Ponzi scheme run by Robert Helms and Janniece Kaelin through their company, Vendetta Royalty Partners, Ltd., claiming to have royalties on 2,000 oil and gas wells. The scheme involved as many as 129 investors who invested at least $18 million. Helms and Kaelin were the subject of a summary judgment against them, stripping them of their ability to work in investment industry.

    John R. Burns III, 56, was sentenced to 7 years in prison in connection with a Ponzi scheme run through USA Retirement Management Services. Burns persuaded investors to invest in bogus Turkish bonds. His scheme was part of a large scheme run with Robert Pribilski, 57, and Mahmt Erhan Durmaz, 45, in which they defrauded 120 investors out of $28 million. Pribilski pleaded guilty last year, and Durmaz fled the U.S. in 2010 and is believed to be residing in Turkey.

    Terina Carney aka Teina Humphrey, 49, pleaded guilty to running a Ponzi scheme in which she stole more than $415,000. Carney ran her scheme through Riverside Lease LLC, and investors were promised returns of 10% to 30%.

    Cristal Clark, 41, was acquitted of charges of running a Ponzi scheme through Cay Clubs, and a mistrial was declared as to her husband, Fred “Dave” Clark. Cay Clubs had sold interests in luxury resorts that were to be developed nationwide, promising returns of 15% to 20%. They had raised more than $300 million from approximately 1,400 investors. An SEC action against the Clarks had previously been dismissed as being untimely. Two others involved with Cay Clubs, Barry Graham and Ricky Lynn Stokes, had previously pleaded guilty and received sentences of 5 years each.

    Carlos Garza and his brother, Josh Garza, were sued by the SEC in connection with GAW Miners. GAW is alleged to have violated securities laws through its sale of Hashlet miners and its cryptocurrency, Paycoin. Last year, GAW moved more toward its “Paybase” system of payments and formed strategic partnerships with Walmart and Amazon.

    Richard M. Higgins, was sentenced to 14 years in prison after pleading guilty to charges that he ran a Ponzi scheme through Higgins Capital Management and Higgins Equity Partners. Higgins defrauded investors out of more than $600,000 by assuring them that he was a registered advisor and reporting returns to them of between 18% and 174%. In fact, he experienced losses of between 80% and 91%.

    Irwin Lipkin, 77, was sentenced to 6 months in prison in connection with the Bernard Madoff Ponzi scheme. Lipkin had pleaded guilty to charges relating to the falsification of documents at a time when he was Controller for Madoff’s company. When he left the company, he instructed his successor on how to falsify the records and he also manipulated his own account to retain significant capital gains. Lipkin’s wife also remained on the payroll for many years, even when she was not performing any services.

    James H. Mason, 67, was sentenced to 8 years in prison and ordered to pay $4.3 million in restitution in connection with a $4.7 million Ponzi scheme that defrauded at least 500 investors. The scheme purported to be a foreign exchange investment program.

    Ron Earl McCullough and David Christopher Mayhew had a default judgment entered against them, which provides that they will have to pay $1,223,388.43 in restitution and 42,486,619.87 in civil monetary penalties for operating a foreign exchange Ponzi scheme. McCullough and Mayhew were accused by the CFTC of violating commodities laws in connection with a fraudulent scheme that solicited about $2.3 million from at least 11 victims.

    Steven Palladino, 58, was sentenced to 2 years in prison for violating an asset freeze and other court orders in a civil case brought by the SEC relating to a Ponzi scheme for which he is already serving a 10 to 12 year sentence. Palladino was sentenced last year after pleading guilty to stealing $10 million from investors through his company, Viking Financial Group.

    Wayne Palmer, 60, and his cousin Julieann Palmer Martin, 47, of Utah, were indicted on charges that they ran a Ponzi scheme which defrauded more than 600 investors out of $140 million. They ran the scheme through National Note of Utah, a company that supposedly extended real estate loans, engaged in other real estate activities, operated a mint, and extracted precious metals from mine tailings. The company promised investors consistent returns of 12% per annum.

    Albert Rossini, 67, Babajan Khoshabe, 74, and Anthony Khoshabe, 33, were indicted on allegations that they defrauded at least 15 victims out of $2.9 million. They represented that investors would receive rental income from purchasing purported mortgage notes on apartment buildings in foreclosure, and that they would get title following the foreclosure. Thomas Murray, 61, a licensed Illinois attorney, was also indicted for his alleged role in validating the sale of the mortgage notes through a phone “Guaranty Agreement” that he prepared and gave to Rossini to present to victims. Rossini and Babajan Khoshabe allegedly told prospective investors that Anthony Khoshabe managed the mortgaged properties through his position at Reliant Management, which shared office space with Devon Street Investments Ltd.

    Keith F. Simmons, 50, and Deanna Salazar received one of the largest fines ever handed out by the CFTC. They were fined $76 million for fraudulently soliciting and accepting $40 million from 240 individuals for their off-exchange forex trading program known as Black Diamond. Simmons was sentenced to 40 years in prison and Salazar was sentenced to 4.5 years, and both are currently serving their sentences. The court entered consent orders against Simmons and Salazar and her companies, Life Plus Group LLC and Black Diamond Holdings LLC. Also charged are Bryan Coats and his company, Genesis Wealth Management LLC, and Jonathan Davey, and his companies, Divine Circulation Services LLC, Divine Stewardship LLC, Safe Harbor Ventures Inc., Safe Harbor Wealth Investments Inc., and Safe Harbor Wealth Inc.

    Michael J. Stewart, 68, was convicted in connection with a Ponzi scheme that defrauded 647 investors out of $169 million. Stewart represented to investors that he would acquire distressed apartment buildings that he would flip for a profit. Stewart ran the scheme through Pacific Property Assets with John Packard. Pacific Property had filed for bankruptcy in 2009, listing 647 investors. Packard had pleaded guilty in 2014 and testified against Stewart at trial. Both are scheduled to be sentenced in November.

    Frederick Alan Voight, 58, was the subject of an SEC complaint alleging that Voight raised $114 million through his enterprises, DayStar, FAVA, Rhine, Topside, Intercore, and IRC, to fund a Ponzi scheme. Voight claimed that he was using the money to fund research for public companies and he promised up to 42% annual interest. One investment opportunity supposedly funded a technology called “DADS”, a Driver Alertness Detection System that would warn sleepy drivers.

    William Donnelly Yotty, 69, pleaded guilty to charges in connection with his operation of a $16 million Ponzi scheme through companies he operated under the names Global Capital Associates, Inc., Infostar Systems, Inc., Pacific Financial Solutions, Inc., and The Money People, Inc. The schemes defrauded about 240 investors. Yotty offered investments in corporate debt obligations and in distressed real estate, offering investors annual returns as high as 25%. In a separate scheme that he operated under the name Fortuno, Yotty offered victims the opportunity to purchase foreclosed real estate at below-market prices so that they could supposedly flip the properties at two or three time the purchase price.

INTERNATIONAL PONZI SCHEME NEWS

Canada

    Keith Henry Alexander admitted to engaging in the illegal distribution of securities and unregistered trading in connection with the Ponzi scheme run through The Little Loan Shoppe by Doris Nelson. Alexander raised $14 million from 13 investors.

    Milowe Brost, 61, filed an appeal following his conviction for running a $400 million Ponzi scheme along with Gary Sorenson, 71. The scheme defrauded more than 3,000 investors and was run through their company, Syndicated Gold Depository S.A. They formed an agreement to lend money to Merendon Mining, promising a high rate of return. Victims invested in offshore shell companies marketed by Brost's firms, Capital Alternatives Inc. and Institute for Financial Learning Group of Companies Inc. Both men were sentenced to 12 years in prison.

    Christopher Steeves and his brother, Jeremy Steeves, lost an arbitration in which they were ordered to pay about $658,000 for their role in a Ponzi scheme. The brothers received unlawful referral commissions for recruiting investors into Golden Oaks Enterprises, a company owned by J.C. Lacasse. The brothers also received more than 60% annually on their own investments and secured second mortgages on 18 properties owned by Lacasse’s Rent 2 Own Canada.

Cayman

    Brighton SPC Fund was taken over by the Cayman Islands Monetary Authority. The fund, believed to be worth $130 million, belonged to Belvedere Group.

China

    Lu Kuan-wei and Chen Yun-fei were arrested in Taiwan in connection with the alleged Ponzi scheme targeting bitcoin users through a company called MyCoin. Investors were convinced to invest 90 bitcoins ($49,600), and they were to receive a return of .63 BTC per day. They were to receive back their principal after 4 1/2 months, which would be an annual return of 255%.

India

    Manoj Kumar Sahu, Pintu Saha, and Adhis Haldar were arrested for alleged involvement in Ponzi scheme activities of MPA Agro Animal Projects.

South Africa

    The Financial Services Board provisionally withdrew the license of Ntinga Health and Financial Services following allegations that Ntinga was running a Ponzi scheme. The company promised guaranteed returns of 98% per year. The FSB identified Armstrong Luthando Mazizi as the individual running Ntinga, as well as Geinisiko Mantashe as a signatory on the company’s bank accounts.

    The Financial Services Board provisionally withdrew the license of a foreign exchange brokerage firm called ACM Gold and Trading for its links to a Ponzi scheme. ACM held short-term investment accounts for Platinum Forex, whose assets were frozen last month. Platinum Forex was run by pastor Colin Davids, who promised returns of up to 84% by trading funds on the forex market.

    Sergey Mavrodi, previously convicted of fraud in Russia, has launched a new online allegedly fraudulent scheme in South Africa. The scheme, called MMM like his predecessor scheme, offers returns of 30% per month. The website contains the following message: “This is the first sprout of something new in the modern soulless and ruthless world of greed and hard cash. The goal here is not the money. The goal is to destroy the world's unjust financial system.” The website also describes the system as a “technical basic program, which helps millions of participants worldwide to find those who need help, and those who are ready to provide help for free.”

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

    The motion of Associated Bank to dismiss the complaint of the receiver of Trevor Cook was denied. The lawsuit alleges that the Bank is liable in connection with Cook’s $194 million scheme. The bank had tried, unsuccessfully, to dismiss the receiver’s suit on in pari delicto and res judicata grounds. Cook had promised risk-free returns to over 700 investors in commodities and futures trading, raising more than $200 million.

    Federal prosecutors have challenged a court order directing them to turnover the tax returns of wealthy investors who were defrauded in the alleged $190 million Ponzi scheme of Ramon DeSage, 64, that he ran through his company, Cadeau Express. DeSage contends that the investors failed to report to the IRS the cash that he paid back to investors. He wants to use the tax returns to attack their credibility. Prosecutors say that the court order “order authorizes a rank fishing expedition that puts the victims' sensitive financial data in the hands of the defendant, effectively victimizing them a second time.”

    Henry J. Haff and Diane M. Lis Haff were not permitted to take an additional $731,000 tax deduction relating to funds they claimed were owing to them from a Ponzi scheme called GSH Development LLC. They argued that the funds were never included in income.

    A settlement was documented in connection with the Bernard Madoff Ponzi scheme in which Citco Group Ltd. agreed to pay $125 million to settle claims brought by Fairfield Greenwich Ltd., one of the Madoff feeder funds. Fairfield alleged that Citco had failed to properly administer funds that ended up being invested in the Madoff scheme. About 3,000 investors claim an interest through Fairfield.

    California Polytechnic State University has agreed to pay $480,000 to have the name of Al Moriarty removed from a 53-foot advertisement on the scoreboard in the school’s football stadium. Moriarty was previously convicted or running a $22 million Ponzi scheme. Moriarty used his company, Moriarty Enterprises, to solicit investor into his scheme promising 10% returns from a program that provided home loans to educators. Moriarty was known for his philanthropy and had donated $625,000 to Cal Poly in exchange for the advertisement in Cal Poly’s football stadium.

    A court dismissed a lawsuit against GE Capital Corp. that arose from the Tom Petters Ponzi scheme. The trustee of Ark Discovery, a lender to Petters, had sued GE Capital alleging that it had aided and abetted Petters’ fraud.

    FSC Securities Corp. was found liable for $1.28 million in an arbitration brought by investors who were defrauded in the Ponzi scheme run by Aubrey Lee Price. FSC was one of the broker dealers involved in the scheme, and investors had alleged that FSC failed to supervise brokers who sold the investors “unspecified fraudulent securities as part of a Ponzi scheme.”

    About 14,000 victims in the TelexFree Ponzi scheme received a distribution from a $3.5 million fund that was set up as a result of a settlement between the Massachusetts Securities Division and Fidelity Co-Operative Bank.

    The ZeekRewards receiver made a third distribution to victims of the scheme for 489.2 million. The raises the total amount distributed to $24605 million. The scheme is believed to have raised money from at least 2.2 million customers.

UNITED STATES declared bankruptcy, pledged all Americans as collateral against the national debt,

UNITED STATES declared bankruptcy, pledged all Americans as collateral against the national debt,

and confiscated all gold, eliminating the means by which you could pay, it also assumed legal responsibility for providing a new way for you to pay, and it did that by providing what is known as the Exemption, an exemption from having to pay for anything.  In practical terms, though, this meant giving each American something to pay with, and that \"something\" is your credit.
Your value to society was then and still is calculated using actuarial tables and at birth, bonds equal to this \"average value\" are created.  I understand that this is currently between one and two million dollars.  These bonds are collateralized by your birth certificate which becomes a negotiable instrument.  The bonds are hypothecated, traded until their value is unlimited for all intents and purposes, and all that credit created is technically and rightfully yours.  In point of fact, you should be able to go into any store in America and buy anything and everything in sight, telling the clerk to charge it to your Exemption account, which is identified by a nine-digit number that you will recognize as your Social Security number without the dashes.  It is your EIN, which stands for Exemption Identification Number.
However, the clever rascals have done everything in their power to block your access to your own credit by creating the corporate fiction which is a trust identified by your name in all capital letters.  It is commonly referred to as your strawman.  It is a Debtor, like all corporate entities under the bankruptcy because it is a subset of the bankrupt debtor government. It is not you, but you unknowingly serve as the Trustee for this fiction, manage it for a lifetime, and are legally liable for any and all debts it incurs unless by adminstrative means you lay claim to any and all value it might contain by creating a security agreement between you and it.   Once you have done this no other fiction can have any dealings with your fiction without your express permission as a Creditor to and creator of its value.  It cannot even be sued without your permission.  In fact, no court, government agency, law enforcement agency, attorney, or other corporate entity can transact business of any kind with the strawman without your permission. It is the one thing that every judge has drilled into his head, that the court must have your consent before it can prosecute your strawman, rule, put you in jail (you, the unwitting surety for the strawman which as a fiction cannot be put in jail), because it is not you that they are prosecuting, it is the strawman, and because it is your property, they need your consent for their fiction court or attorney to transact business (under admiralty/commercial UCC law) with your strawman.  The person in the black robe sitting in front of a court is a man on the land operating a corporate fiction called a court, which can only do business with another fiction, your strawman.  If you have ever looked at a Summons and Complaint, which typically starts a legal proceeding/suit, you will see the identities of the parties involved as Plaintiff and Defendant, are always spelled in ALL CAPITAL LETTERS, because they are fictions.
Cleverer still, the UNITED STATES contracted with the Federal Reserve to use its private, copyrited scrip, the Federal Reserve note, for all debts both private and public, and that private scrip can only be brought into the PUBLIC, the corporate domain that is the system we currently live in, through a chartered banking institution or a pass-through account, and that pass-through account is your limited liability social security account.  Anyone bringing money into the PUBLIC in any other way can be charged with money laundering.
 With that groundwork laid, we come to the greatest scam of all, the use of your credit without your permission or knowledge.  In a debt-based system such as the one we use under the national bankruptcy of 1933, all value is created through lending, and what you lend is credit because there is no longer any money.  The government took it all away. As previously stated, every living soul in the system has the right and, albeit cleverly hidden, the ability to create credit.  Only a living soul whose value to society has been denominated in bonds collateralized by evidence of his physical birth, has access to credit except for fictions such as banks which are chartered by the government, given the franchise to create credit.  However, when you sit down with a banker to \"take out a loan\", you sign a promissory note, and on the strength of your signature, the loan, which is really a draw on your own credit, originally created to satisfy a legal requirement to provide you with a means to pay, is created, but you are led to believe that the bank is lending you its assets so that it is entitled to repayment of principle plus interest.  Wrong.  The bank is using your credit to create the loan and then demanding that you pay back something that belongs to you.    This means that all loans are fraudulent because under the terms of the contract, whether it is a mortgage, a line of credit, a credit card account, a car loan. or any other loan, the truth of the matter was not fully divulged, and no contract can stand as legitimate and lawful unless all the terms of the agreement were shared with the \"borrower\".  In fact, the bank deposits the promissory note that you sign just as it would a check that you wrote.  It flips it over and endorses it, creates a special demand-type account, deposits it, then carries the loan on its books first as an asset and secondly as a liability owed to YOU.  Of course, they never tell you this, but it is true.  If you are willing to risk having your accounts at the bank shut down, try asking a branch manager exactly what happens to a promissory note.
But I digress.  The fact is, you have unlimited credit, and there is a burgeoning community of Americans who are learning to lawfully access and utilize this credit to settle their commercial affairs.  It\'s quite a tussle, because the Powers do not want to cooperate.  The government was legally required to provide you with a means to pay anything anytime, but it did not see that it was obligated to show you how to access it, so it has taken many years of patriots working very hard to uncover and develop the means to do just that - use their credit to better their lives and those of their loved ones.  It is the ultimate gift in this system, and one that you should be grateful that people are devoting their lives to.
In summary, in our debt-based system, all value is created by lending in order to discharge, not pay, another debt/obligation.  The value behind this lending is credit.  For you, this credit was based on your personal worth and was created by bonds collateralized by your birth certiificated and valued according to actuarial tables.  This credit, your Exemption, is all yours, authorized under the terms of the bankruptcy and HJR192 to replace the gold confiscated by the government.  The government and all its subsets have tried very hard for many decades to keep the fact of this value from you, and structured your interface with the rest of the corporate world so that you have acted as the surety for a Debtor fiction, your strawman.  The predictable effect of this has been your personal amnesia, forgetting who you really are, a Creditor, while the government has pillaged your credit for its own uses, leaving you enslaved without even knowit it, this the ultimate deception and fraud.

IS THERE REALLY A REAL REMEDY?

Is there really a real remedy to what has been done? Quite simply, yes! There is one way and one way only you can protect yourself, your family, and property from this public obligation. Only through an underlying Security Agreement and filing a UCC-1 Financing Statement can you gain this standing. Accepting For Value your Birth Certificate and executing a lien upon the governmentally created ALL-CAPITAL-LETTERS-NAME by you in your proper Birth given Name as the Secured Party, and listing anything and everything you own, will own, or possibly ever could own, as collateral in the Security Agreement, can you effectively and permanently remove yourself from the status of a DEBTOR to that of a CREDITOR, and actually own property, have access to enforceable Constitutional Rights.

By filing a UCC-1 Financing Statement, you become an actual CREDITOR with standing in law and acquire the ability to stake a claim upon which relief can be granted, and not have the fruits of your labor taxed simply following up the UCC-1 Financing Statement with a Public Notice and Declaration/Depositum Declaration, can you, as a CREDITOR, acquire and access actual Original Jurisdiction Constitutional rights, that can be enforced. Without a UCC-1 Financing Statement, and the underlying Security Agreement, everything you have is pledged and owned by the State. You merely are the user of the property and must use that property in strict compliance with all the rules and regulations established by the State. If acquiring actual Original Jurisdiction Constitutional Rights and having the ability to own property free from government controls, and the ability to earn a living without taxation interests you, you have nothing to lose and everything to gain by executing this document. Only through filing a UCC-1 Financing Statement and Security Agreement is it possible for anyone to legally access Constitutional Rights.

To try and break this down even further. Few people truly understand the words "slave and slavery." The biggest benefit in filing a UCC-I Financing Statement is that you will no longer be a slave. The fact is, most dictionaries fail to provide an accurate definition of the words "slave and slavery." Even Webster's 1828 edition of the English language dictionary fails in its attempt to define the true meaning of the word "slavery": "Slave: a person who is wholly subject to the will of another." Slavery is not a matter of being totally 100% subject to the will of another. Any person, who is to any degree involuntarily subject to the will of another, is still a slave. There are no degrees of slavery.

The second part of the 2nd definition of slave provided by Webster's 1828 Edition is: "One who surrenders himself to any power whatsoever," which is closer to the real point. The Uniform Commercial Code [UCC] governs ALL commercial transactions in the United States. Any "person" including government corporations, agencies, etc., involved in the "sales of goods, commercial paper, bank deposits and collections, letters of credit, bulk transfer, warehouse receipts, bills of lading, investment securities, and secured transactions" is governed by the UCC. The "A" form of Uniform Commercial Code is adopted by all States. To comply with the Uniform Commercial Code in your state, a UCC-1 Financing Statement must be filed with the Secretary of State [or by a private provider], by any "person" who makes a claim against any other "person" in the area of commerce. All government agencies, (city, county, state and federal), operate in commerce and all of them, including the Internal Revenue Service, are private corporations. All Courts operate in commerce. All Banks operate in commerce. All corporations operate in commerce and all of these "entities" exist financially because WE are their collateral. They borrow on our "credit."

At one time, our currency was backed by or given substance by gold or silver. It has been thought by many, since the United States took the substance of gold and silver away, that Federal Reserve Notes were simply worthless paper, backed by nothing at all. That is not correct! Today, real people, citizens of the several states, you, me, your children, etc., back Federal Reserve Notes, much the same way that gold and silver did in the past. In other words, the living, breathing people guarantee or provide the substance for ALL money that is created. The Federal Reserve Bank clearly states: "Federal Reserve Notes are backed by the Full faith and credit of the American People." Blind Faith sets forth that YOU trust THEM. Who? None other than the Federal Reserve!

Credit means something is due you! The Federal Reserve uses our credit to create ALL money. All of the money created belongs to the American People and the deceit of the Public and private corporations is so complete, they create it, charge it to us as a debt and then tack interest to it on top of that. How did the American People become collateral for the debt instruments known as Federal Reserve Notes? It was given to the Federal Reserve by a corporation called the United States, the very same corporation that created the Federal Reserve. As discussed previously, in 1933, when President Roosevelt declared a national emergency because the United States could no longer pay its debts. At least that was the spin given to the American People. All of the subsidiary States agreed to support the declared bankruptcy by "pledging" the energy of their "citizens." Their assets consisted only of State Citizens. The States in turn used the Birth Certificates to pledge the State Citizen as collateral to keep Government afloat. That is how the American People became collateral for the Federal Reserve Notes and so-called debts. The American People became warehouse receipts, like a warehouse full of any type of valuable goods. All of this, however, was a major fraud. Neither the Internal Revenue Service nor any other entity like Government files a UCC-1 Financing Statement into the Commercial Registry with the Secretary of State. If they did, they would instantly become subject to all the regulations of the Uniform Commercial Code. The Internal Revenue Service has done very nicely by bluffing and intimidation, as all others mentioned, by operating under "Public Policy" where there is in, reality "No Law" at all! The State Citizen is drawn "into commerce" when their Birth Certificate is registered and sent to the Commerce Department in Washington, D.C. This is where the American People became warehouse receipts upon which all of the money printed and circulated is created and guaranteed. In short, the American People became the collateral for all debts. They, "The People," allegedly are "Government" property! Government is a "fiction" and an artificial person and deals with us as a fiction or artificial persons only as stated before. To take this still to another level, let's use an example to explain and use the name of John Henry: Smith. When John Henry: Smith was born, his parents gave him the Christian name of John Henry and he shared the name of Smith with all the other members of his family. He was born a living, breathing being. When his Birth Certificate was sent to the Department of Commerce, it was registered and the Government, because it was bankrupt, turned his "real name" into a fiction. His new fictional name became JOHN H. SMITH or John H. Smith. His ALL-CAPITAL-LETTERS NAME was registered as a corporation at the Puerto Rico Department of State Corporations (Departamento de Estado - Division de Corporaciones) P.O. BOX 3271, SAN JUAN, PUERTO RICO, 00904-3271, making him liable for taxes. He is now a fiction or artificial person; a non-living, non-breathing "person." It is a "strawman" (Lat. stramineus homo) or "fiction" which government brings all its so-called charges against and NEVER against the real person. Just like "yours," his driver's license now reads JOHN H. SMITH or John H. Smith. When he signs a 1040 Tax Form, he dutifully fills out the form as John H. Smith and then signs his name "under penalty of perjury, " thereby admitting he will be responsible for all the taxes of JOHN H. SMITH, a fiction in law, corporation. Look at your driver's license and see whom it is issued to. How can government use a form of our name and turn it into a fiction (corporation) without our permission? They can't, we sign our name to all of their forms, which is purely voluntary "permission-in-ignorance." In short, we do it to ourselves!

However, for those who wish to control and own this fiction and prohibit government corporations, including the Internal Revenue Service from making so- called charges against it, a remedy is available: to do this by executing a UCC-1 Financing Statement! John Henry, Smith would simply do what Government and the Internal Revenue Service does not do: File your UCC-1 Financing Statement into the Commercial Registry with the Secretary of State [or private provider] and claim EVERYTHING related to JOHN H. SMITH or any derivative name, corporate fiction; i.e.: the Birth Certificate and Social Security Card and Number. The living, breathing, real person then owns and controls the fictitious entity, including all contracts related to the Birth Certificate and Social Security Number.

Thusly, the real John H. Smith secures all rights, interest and title in the fictitious entity. Now, government and the Internal Revenue Service has to deal with John Henry: Smith but they cannot!, because he is no longer subject to government control. Every living breathing person has both a Social Security Card and an Employer Identification Number (yes, there are exceptions). The Internal Revenue Service calls the Social Security Number our Taxpayer Identification Number (TIN). Never do they mention our Employer Identification Number (EIN). What, you are not an employer, so you do not have an EIN? But wait. Yes you do! We are all employers and every one of us has an EIN. If you apply for a new Social Security Card (not a new number), on the backside of the card written In Red is your Employer Identification Number. Government workers are all employees. EVERY SINGLE ONE OF THEM! Government employees work for us!, we are their employer! That is why, when you read the Tax Code to find the definition of "employee," under Title 26 United States Code, at Section 3401(c), the term "employee" specifically includes officers and employees, whether elected or appointed, of the United States, a State (Federal State), Territory, or any other political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. EVERY ONE OF THEM ARE EMPLOYEES - THE AMERICAN PEOPLE ARE THE EMPLOYER. Write to the Bureau of Vital Statistics in the Capital of the State where you were born and request a copy of your Birth Certificate. Request a Certified copy. Never mind that you have a copy right now. More likely than not it came from the County in which you were born. The number assigned to your Birth Certificate by the Vital Statistics Office is of primary importance when executing your UCC-I Financing Statement.