Thursday, April 1, 2010

Beware the Phony "REDEMPTION " Scheme of the Feds


This phony REDEMPTION scheme is still going on, in Kalispell, Montana for example, and even advertised in their paper as well. I often wonder how many poor people are getting suckered into this FED scam.

I just found an excellent article exposing this REDEMPTION SCHEME, However, where the author of the article has it WRONG is, he lays the blame for the REDEMPTION SCHEME on the Patriot/Militia community. THIS IS FALSE. The federal government is sending in their covert operatives into the militia/patriot communities, to infiltrate and lure them into this, and then to arrest them and imprison them.

I had this fact confirmed by famed and persecuted Patriot and bullet mold maker VERAL SMITH, of Moyie Springs,Idaho. He told me he also was sucked into their doctrines, and then hauled into court. He told me personally overheard one Federal agent laughing and bragging to another how they set him up with this phony Redemption scheme!

And poor Veral and Judy were then put on trial, and Veral sentenced to prison as well. They soon found out it wasn't really over the REDEMPTION issues, but rather the underlying reason of his bullet mold making. The REDEMPTION SCHEME is just one of many ways the Federal government infiltrates into the Patriot communities, to target those they don't like, and then to remove them.

The Federal government hates people who are anti-NWO, and hates even more the people who facilitate NWO bullet-mold makers who help to arm the NWO resistance in America, like Veral Smith.

You can read more about this near the end of this report, but of course it is a sanitized "official government explanation" regarding Veral's encounter with the REDEMPTION SCHEME, and does not tell the WHOLE TRUTH AS VERAL AND JUDY TOLD ME THROUGH TEARS IN THEIR HOME.

Here is the information on the Redemption Scheme from the report:

1. Introduction

...In the spring of 1999 a group of anti-government extremists created an elaborate web of pseudo-legal and pseudo-historical doctrines that brought together longstanding beliefs in the so-called “patriot” or “Constitutionalist” movement into an overarching structure. These theorists suggested, moreover, that people could manipulate this system into allowing them to discharge debts and redress grievances, all to their profit and advantage. The theorists combined longstanding “common law” ideology with tactics for achieving wealth and combating enemies. They held seminars and sold materials designed to teach people the theory and practice of this system.

[FACT-It is a government infiltration tactic, often used heavily by covert infiltrators of the Patriot movement, and designed to get the valid members of the Constitutionalist/patriot community entrapped and imprisoned. The Patriot/Consitutionalist (anti-NWO agenda) community is riddled with covert operatives of the Federal government. While it may be that some unsuspecting members of the Patriot community have bought into this unsuspectingly and are now presenting it to others, it remains a deep covert infiltration black op into the Patriot Community to this day.-Pamela Schuffert]

Report continues-

They called it “Redemption.”[1]

Within just months, this scheme spread across the country. At last count at least 26 states had reported some activity. It is probably accurate to say that almost all states have experienced activity, whether it was recognized as such or not. One problem in defining Redemption’s extent is that it involves many separate actions, involving private entities as well as federal, state, and local government agencies. But each entity sees only a portion of the whole scheme, and may not even recognize that a pattern exists.

This report has several purposes. It seeks to 1) gather such information is currently available on the Redemption scheme (as of mid-October 1999) and explain it as coherently as possible, 2) identify, to the extent possible, the activities conducted and the players involved in the scheme, and 3) to encourage law enforcement officials, prosecutors, and others to look carefully at this tactic.[2]

2. The Pitch

The Redemption scheme, at its heart, consists of the bizarre notion that a bankrupt United States converted the physical bodies of its citizens into assets against which it could sell bonds, and that knowledgeable people can “redeem” these assets and, through manipulating them and various imagined accounts, use them to their advantage. Much of the rhetoric is, as is common with “sovereign citizen”/”common law” theories, nearly incomprehensible and often laced with Biblical references used as points of law.[3] Moreover, also common with such theories, the language is often deliberately obtuse, so that the explanation is difficult to follow. The reason for this is that when people who attempt the strategies run afoul with authorities, proponents can claim that the strategy was simply not applied correctly and that correctly following the steps would certainly result in victory. This rationale was used previously by proponents of the various bogus money order schemes common in the early to mid 1990s, as well as in numerous other scams developed by patriot theorists.

The pitch is generally delivered in one of two ways. The most common way appears to be through holding seminars to teach people the process. To date, seminars are known to have been held in Oregon, Nevada and Texas, although it is a certainty that there have been others elsewhere. The second method of disseminating the scheme is through selling videotapes, audiotapes, and manuals that describe the process. Several extremist publications have been instrumental in this method of dissemination.

The real attraction of the Redemption scheme, despite its outlandish propositions, is that it carefully ties together a number of popular patriot myths and misconceptions into one large structure. Many of the people who attend such seminars already come “knowing” that their name spelled with all capital letters is somehow different from the same name spelled in upper and lower case, and “knowing” that the government went bankrupt when it went off the gold standard, even if they don’t understand exactly how. The Redemption scheme not only reiterates these myths, but cleverly links many of them together into one explanation. As a result, it is very compelling to many of the people who come across it.

The following explanation of the pitch that the Redemption scheme uses is drawn from a number of different sources, including seminar materials, articles about the scheme written in extremist publications, and documents on the World Wide Web. This explanation attempts to synthesize these various sources in order to give the reader a general idea of what the Redemption scheme is supposed to do. It should be noted that the actual materials are much more difficult to understand and in fact often are contradictory, sometimes even self-contradictory.

The heart of the Redemption scheme is one of the oldest and most dearly held of all patriot myths: the Federal Reserve conspiracy. In 1909, according to this myth, the United States could no longer pay its debts and entered into negotiations with international bankers, who gave the U.S. a 20-year moratorium on paying its debt in return for the establishment of a Federal Reserve Bank to be owned by international bankers. Two decades later, suggests the myth, the United States defaulted on this debt and went into bankruptcy, which is what really started the Depression. Four years later, in 1933, Franklin Delano Roosevelt, by creating a “national emergency” and taking the country off the gold standard, ended legitimate constitutional rule.

From that point on, the government operated largely through deception (as to its unconstitutionality), deliberately mixing public, private, and martial laws, rules and practices. Redemption theories in particular reference House Joint Resolution 192 (HJR 192), passed in 1933, which they interpret as a declaration of bankruptcy.

Many patriot theories start similarly. The Redemption scheme takes a dramatic departure in arguing that because there was no longer any legal money (i.e., gold and silver) after 1933, the U.S. government had to find some other way to discharge its debt. It did this by seizing the energy of the country, in the sense of energy produced by individuals. In 1936, suggests Redemption theory, with the advent of Social Security, the U.S. government began to take birth certificates and place them with the Department of Commerce as “registered securities.”

These certificates represented all of the work and labor of each citizen, as well as everything each citizen owned or would ever own. According to one theorist, a pledge was made for each certificate in the amount of $630,000 (another pegs it at $1,000,000). Thus everybody and everything in the United States is simply collateral for the bonds issued by the U.S. government.
When you were born, the state became the recipient of your future energy output, as a “title security document,” which it converted into a bond sold on the open market to finance the government. The holder of that bond is the secured party to receive your future energy output. Does the bondholder own you?

No, not exactly, but he or she does own essentially everything you do. Each person, in fact, has a mirror entity which represents that output. This is called, we are told, the “nom de guerre” or, more commonly, the “straw man.” In essence, it is an appropriation of a somewhat older patriot myth that there is a significant meaning behind the various ways it is possible to spell one’s name.

If a patriot gets a summons addressed to JOHN DOE, he may refuse that summons because his name is not spelled with capital letters. The issue is intricate, but what is important here is that Redemption theorists appropriated this notion and enfolded it neatly into their explanation of government. Of course, JOHN DOE is different from John Doe. JOHN DOE is not you, it is the mirror entity set up to represent your energy output. Every man, woman and child has a straw man. When you sign your name to something, you are putting property into the hands of the United States and its bond owners, not into your own hands. In fact, your hands are not really your own; they are the straw man’s.

Redemption theory gives Redeemers a way to use this alleged situation to their advantage. The thing to do, they say, is to retake control of your straw man. Once you control the straw man, then you control the rights and titles of the property that the straw man acquires, and a whole lot more. Redemption theorists argue that the government has title to your straw man by presumption only, but that if you rebut its presumption, you can gain title to it. Much of the language regarding this issue parallels earlier language suggesting that you could become a “sovereign citizen” and the government would have no hold on you any more. Redemption theorists artfully reuse that language.

They also cleverly act upon the experiences of many patriots in court, where their pseudolegal arguments come to naught when confronted with the real court system. Redemption theorists claim that all of the court’s arguments are being brought to bear against your straw man, which is presumed to be identified with you. Because you did not know it, and did not rebut their claim, it was held as “truth in commerce.” Thus all patriot failures in court are explained away, because they were unfamiliar with the concept of the straw man and did not have control of theirs.

How do you take back your straw man? Well, reply Redemption theorists, one consequence of the events of 1933 is that there is now a private side and a public side to the government (the government is often called the “democracy corporation” in these writings). Currently, your birth certificate is in the public side of the government. But you want to get it over to the private side of the government, because this side is “the highest priority of recognition by the military State.” So the public side would no longer have priority.

The way to do this is through UCC-1 filings of one’s Birth Certificate with the Secretary of State of his or her state. This allows you to “redeem” yourself from the public side of the government, after which “the living soul has the right of property ownership in himself through his straw man who now belongs to the living soul.” Some redemption documents refer to this process as creating a “corporation sole.” One should not dawdle in redeeming one’s straw man, because some sources suggest the last legal date to do so is December 31, 1999.

Is controlling your straw man a good thing? It certainly is. Not only do you now own what the straw man owns, rather than the state, but you can take advantage of the fact that you are the owner of the straw man. This is because, redemption theorists say, “a name is CREDIT.” If any unauthorized person uses your name or the straw man’s name, they have violated the laws of “slander of credit.” This becomes a federal securities violation.

Once you have redeemed your straw man, you can then use commercial process to “discharge public funds with private funds and allow the straw man to spend these public funds that have been converted to private funds for goods and services in a tax exempt and levy exempt mode.” If it sounds confusing, it is. In essence, it is way of “establishing” fictitious bank accounts that can then be used to discharge various debts.

Texas Redemption theorists claim that when you become the “holder in due course” of your straw man, the governor becomes responsible for claims on your straw man. Says one theorist: “It’s very much like if the Governor co-signed on a loan for your car for you and you stopped making the payments, the bank then looks to HIM for the payments. I don’t know about you, but personally I LOVE THIS IDEA!!! Now if I get a traffic ticket, I can just let the Governor pay the fine, since he is the surety for the Straw Man and is liable for all debts/fines/judgments incurred by the Straw Man.”

The key to getting this particular goose to lay golden eggs is easy. It can begin with your paycheck. Your employer must pay in public funds (i.e., federal reserve notes, or illegitimate money), because that it all it has. It will deposit these funds into your straw man’s bank account. Redeemers are told to have their straw man “do acceptance for value of the solicitation set forth in the bank statement.” What this essentially means is that you are claiming that the bank owes you that amount in real money, not “public money.” You hold the true legal title to the property (i.e., money) the bank has offered you.

However, the bank cannot turn over true legal title of these public funds to you, because the whole public side is bankrupt and does not own anything by legal title. This is the advantage you can use, say the Redemption theorists. If the bank does not produce title within 72 hours, a “condition of dishonor” occurs and the straw man can do a “Banker’s Acceptance” to the dishonored agreement.

In essence, your straw man becomes a bank, because it is attempting to collect the security underlying the contract with the real bank. A banker has the capacity and authority to create a Bill of Exchange drawn upon the debtor, payable to the straw man. So the straw man creates a Bill of Exchange, then deposits the bill of exchange with the U.S. Secretary of the Treasury “in his private side capacity.”

The Secretary becomes a “correspondent bank” to the banking of the straw man and keeps an account balance. This balance is numbered with the number of the Certified Mailing Label on the first letter of deposit sent to the Secretary. Each account is mirrored with public funds—though why this should be so, exactly, is a little fuzzy—and this public fund mirror account, called the Treasury Direct Account, is numbered with a social security number.

Once the Secretary of the Treasury has generously established this account for you, your straw man can direct the Secretary to release the private side funds from the Treasury Direct Account. You can do this with a money order and a UCC-3 “partial release instrument” registered with the Secretary of State. There is additional paperwork you must do, including filling out an IRS Form 1040ES (instead of a 1040) in order to report the location of the public funds, so that the IRS can collect them from the bank that owes you originally.

So far it seems like a lot of work. What do you get out of it, other than the joy of filling out forms? For one thing, you get the opportunity to pay off your “public liabilities.” These could include items like traffic tickets, mortgages, or even criminal charges (at $4 million per federal criminal charge, though where this number comes from is uncertain). One does this through “sight drafts” offered to these mortgage companies, etc. Such companies would then present the sight drafts to the federal government, which would adjust the appropriate “internal accounts.”

The tactic is called “acceptance for value,” and in fact, sometimes the whole Redemption scheme is referred to by this term. Essentially, what you are told to do is to “accept for value” anything that is given to you—a traffic ticket, a court summons, etc. You can place a value on this document and adjust your internal Treasury accounts accordingly, allowing you to write more sight drafts.

Of course, the rationale allowing you to do all this is quite complicated, but that’s the practical result. Redemption theorists make extravagant claims about discharging debts, even suggesting that the IRS has acknowledged tax bills of up to $400,000 discharged by this process. Many people apparently skip to the chase and begin writing the sight drafts, often without even bothering to fill out all the UCC forms they were supposed to.

Unfortunately for Redemption theorists, not everybody in the government is inclined to agree with their interpretations of law. Often people who engage in Redemption activities find themselves stymied at one point or another.

But Redemption theorists provide methods to redress these wrongs. If one “accepts for value” a traffic ticket, for instance (at, say $1 million, which seems to be the going rate), then one can demand that the police officer fill out an IRS Form 8300, ordinarily required to be filed for currency transactions of over $10,000 (to fight money laundering). If the officer refuses—which one would presume would be the likely result—the Redemption practitioner may simply file it him or herself in the officer’s name. This has the same effect as the fake IRS 1099 forms that extremists have been filling out for years—it causes the IRS to think that the public official has received a large sum of (unreported) money. Similarly, some practitioners file Fiduciary Tax Reports with the IRS.

3. The Symptoms and Effects

Even if one cannot quite understand how Redemption is supposed to work—and there should be no blame attached for any such failure—it is possible to see the effects that Redemption has in practice. These are useful in terms of identifying the symptoms of the scheme as well as some of its adverse and criminal results.[4]

Initial UCC Filings

In order for Redemption proponents to redeem their straw man, they must follow certain steps, and the first of these involve UCC filings. These filings are an important first indicator of the extent to which this scheme may exist in an area. Proponents of Redemption tell followers to “register” the straw man using UCC-1 forms both with the Secretary of State’s office (UCC Division) and the county recorder, “or with any Secretary of State which will accept it.” Redemption proponents have discovered that some offices refuse to accept such filings, while others will accept virtually anything. So they are not very particular about who accepts it, just as long as someone does.

The fact that they file with the Secretary of State is a fortuitous happenstance, because it means that there is a centralized repository for much of these filings, whereas in many previous such schemes, filings were only done at the county level, meaning that a state that wanted to track the scheme had to contact every single county. Although it is certain that not every filing is duplicated at the state level in this scheme, the fact that many are is very useful.

The UCC-1 filings so far have varied considerably in form, but they share certain distinguishing characteristics that make them readily identifiable. One key characteristic is that on the form, the debtor and the secured party will seem to be identical, which ought to strike one as unusual, since usually one does not owe money to oneself. In the mind of the Redeemer, of course, this actually represents two people, the flesh-and-blood person and the straw man. Many times the name of the debtor (straw man) will be all capitalized, or will be provided last name first, while the name of the creditor will have upper and lower case letters and will be written last name last.

Under the blank asking for a description of the property covered by the financing statement will usually appear the person’s name and address (they are redeeming themselves). Usually they will also provide a social security number, which they may describe as an Employer Identification Number. Often they will provide a gratuitous reference to HJR 192, or UCC Article 10, Section 104. Sometimes they will sign for both the debtor and the secured party, while other times they may attempt to leave one space blank.

Sometimes the stylings on the form become quite elaborate. Some forms include a Social Security Number for the debtor, but an Employer ID number for the secured party. Frequently the phrase “Debtor is a transmitting utility” will be used, often in several blocks in the form. One property description frequently seen, which gives an idea of the sort of language used, is as follows: “Debtor is a transmitting utility.

The entry of the debtor, Doe, John, in the commercial registry and the following property: 1234 Happy Lane, Smallville, Ohio 54321, copy attached; all the property is accepted for value and is exempt from levy. Adjustment of this filing is from Public Policy HJR-192 and UCC 10-104. All proceeds, products, accounts and fixtures and the orders therefrom are released to Debtor.”[5]

Sometimes a letter is attached to the filing that identifies all the various names for the straw man that apply. For instance, the letter may read: “This filing is not limited to the straw man/dummy entity known AS SMITH, JOHN QUENTIN. This filing also applies to the strawman/dummy entities SMITH, JOHN; SMITH, JOHN Q.; SMITH, JOHNNY; SMITH, JOHN QUENTIN; SMITH, JOHNNY Q.; SMITH, JOHNNY QUENTIN; or any derivative thereof.”

Usually, Redemption proponents include a variety of other documents with the forms they attempt to file. These can include property descriptions, mortgage documents, birth certificates, Social Security cards, and drivers licenses, among others. Taken together, these documents and distinguishing characteristics make Redemption filings relatively easy to recognize.

In addition to UCC-1 filings, proponents will also file UCC-3 documents, usually as an indication of bogus Sight Drafts that they have passed or are about to pass. These documents are similar in most respects to the UCC-1 documents, in terms of debtor and secured party names, etc., but have different text.

One of the most distinguishing characteristics is that the text orders the Secretary of State to perform certain functions. One example from Ohio illustrates their nature: “DEBTOR IS A TRANSMITTING UTLITY. PARTIAL RELEASE FROM UCC-1 AP0169252 on 17 August 1999. COLLATERAL ACCOUNT: Invoice Number: Z 292 745 201, for the amount of $100,000.00 as per Money Order #Z 292 745 201 Payable to NATIONAL AMERICAN INSURANCE COMPANY, BEVENS LAW OFFICE, WM. WRAY BEVENS, 112 N. Market Street, Waverly, OH 45690. SECRETARY OF STATE is to adjust my Account #AP0169252 Dated 17 August 1999. SECRETARY OF STATE is to forward directly to WM. WRAY BEVENS the Acknowledgement Copy hereto attached and to adjust my Account.”

Secretary of the Treasury

The Redemption scheme not only urges people to make county and state filings, but also tells them to send filings to Lawrence H. Summers, the Secretary of the Treasury of the United States. The overworked Mr. Summers presumably will not open all of these himself, but nevertheless his office gets them. This is essential to the scheme, as it helps to magically create the fictitious accounts that are then manipulated with sight drafts. Redeemers are urged to send a cover letter to Summers, along with a copy of the birth certificate filing and the original “Bill of Exchange.”


Once the straw man has been redeemed, a Redeemer will gladly “accept for value” any item such as a ticket, a warrant, court orders, or financial statement. This acceptance may be followed by a notice giving the other party 72 hours to respond. Redeemers are prompted to address these people by their “private name,” as in “John Doe, d.b.a. Judge of the United States District Court,” rather than “District Court Judge John Doe.” The notion is that once one gives them “private notice” of this acceptance, then there are no more “public” charges (as in debts or criminal charges) and any subsequent actions would be to “act under color of law by disguise upon the commercial highway.”

Acceptance for value statements usually will take the form of a “contract” laid over the initial “offer” (i.e., ticket, etc.). This document will often include a “Treasury Direct Account Number,” a “Memory of Account Number,” a “Posted Certified Account Number,” the amount of money for which the item was “accepted,” the date, an invoice number, and a signature. In some cases Redeemers will simply write all these items on the document itself.

Here is the text of one such “acceptance for value,” written on a warrant for the Redeemer’s arrest: “’Non-Negotiable’/Charge back/Lawrence Summers, Sec. Of Treasury of the United States/I accept for value all related endorsements front and back in accordance with UCC-3-419 in accord with HJR-192. Please charge my Treasury Direct Account #123-45-6789 for the registration fees and command Memory of Account #123-45-6789 charge the same to the debtor’s order, or your order/Posted Certified Account #: Z240 181 658/Value: $1,000,000,000,000.00/Invoice number: STS7777777778/E.I.N. 123-45-6789/Prepaid Preferred Stock/Property Exempt from Levy/Signature.”

Bills of Exchange

As mentioned above, once something has been accepted for value and (presumably) ignored, the Redeemer can create a Bill of Exchange by filing UCC-3 addendums with the Secretary of State. Redeemers are encouraged to notify the public officials of this fact. One of these bills will generally consist of a description of the collateral (such as, say, all the personal property of a state highway patrol officer, as well as all the property of a county government), an outrageous “value” of the Bill of Exchange, and various mentions of HJR-192, direct accounts, and the like.

Sight Draft

From a law enforcement point of view, one of the most important things about the Redemption scheme is that it generates bogus Sight Drafts which are used to pay for various items or debts. Although some extremists skip the paperwork and cut straight to creating the fictitious financial instruments, proponents of the Redemption scheme have created a process that people are supposed to follow in order to be able to use Sight Drafts. Once one has created a “Bill of Exchange,” one can then go about creating Sight Drafts in order to discharge the “public claims.”

One of the most important such aspects may be that such Sight Drafts are supposed to be registered with the UCC Division of the Secretary of State, along with a UCC-3 “partial release” form. In fact, the registration numbers are supposed to appear in the upper left-hand corner of the Sight Draft. Through monitoring such filings, it may be possible to discover some of the Sight Drafts and their creators. The Sight Drafts are also accompanied by a one or two page “letter of instruction” explaining what the Sight Drafts are and how they are to be handled, as well as a cover letter and a copy of the UCC-3 document which ostensibly justifies the Sight Draft.

In the past, fictitious financial instruments created by anti-government extremists generally came from centralized sources that created and distributed the instruments. The Redemption scheme is different in that people are encouraged to create their own Sight Drafts. Redeemers are given instructions as to what they ought to look like. Sometimes computer programs are sold which can generate the drafts; sometimes people are told to have them made at particular printing establishments.

Some of the sight drafts may be very sophisticated, including watermarks, routing numbers, and other features. However, they will typically share certain attributes. They will commonly reference HJR-192, they will be payable by the U.S. Treasury (sometimes given with an incorrect address), they will often reference Treasury Direct Account numbers or Employer ID numbers, and they may have other odd references to the UCC.


Redemption proponents offer a variety of tactics to use if other people do not see eye to eye with the Redemption process. These include “acceptance for value of the offer in commerce, and process their commercial claim for the damages,” which apparently would mean a frivolous lawsuit. Other suggestions include habeas corpus filings, frivolous appellate court filings, and “resort to superior military action by filing a claim with the military commander in your area, after the civil process has broken down.”

One disturbing tactic used by Redeemers is misuse of IRS Form 8300. This form is the cash transaction report that should be filed for cash transactions of over $100,000; it is designed to help combat money laundering. Redeemers are encouraged to “report any trespassers, upon which you have done ‘acceptances,’ chargebacks and Bills of Exchange, to the IRS by way of 8300 filings and 1040ES reports on them.”

In order to fill out such 8300 filings, Redeemers will try to get the social security numbers of police officers, public officials, etc. This will sometimes result in a rash of W-9 filings, which are a request for taxpayer ID numbers. One extremist in Texas used these methods as a way to get back at a city attorney who filed a lien on his property when he did not mow it. The extremist used the W-9 forms, Bills of Exchange and other documents to suggest the attorney owed him $4.1 million, with all of the attorney’s property to be held as collateral.

4. The Practitioners

The Redemption scheme has spread far and wide in only a few months. The sight drafts alone have been spotted in at least 26 different states. It seems likely that at the very least, UCC filings have appeared in every state. For this report, the Secretary of State offices in eight states were contacted: Ohio, Missouri, North Carolina, Arizona, Pennsylvania, Nebraska, Minnesota and Maine.

Ohio, a state where it was known there was considerable activity, reported such UCC filings were coming in every single week. In fact, there were one or two individuals who would bring people in and walk them through the process of making the UCC filings. Missouri, a state with considerable extremist activity, reported a moderate amount of such activity. North Carolina, also a state with considerable activity, reported a large number of such filings. Arizona officials reported there had been up to fifty such filings in recent months. Pennsylvania reported about forty such recent filings, most in two large clumps, probably indicating that seminars had just recently been held in that state.

Nebraska, a state with a low level of activity, reported a handful of such filings, while Minnesota reported somewhat more. Maine, another state with a low level of extremist activity, reported one recent filing. In most of these cases, officials had no idea what to make of such filings. About half the states contacted unfortunately accepted the filings, while the other half did not.

The Redemption scheme apparently originated in the early spring of 1999. Seminars were held in various places during the summer, and in the fall of the same year, it seems to have become very widespread. Sometimes people would travel great distances to attend the seminar; there are records, for instance, of someone from North Carolina attending a seminar in Texas.


Exactly who came up with the Redemption scheme is not certain (although see below), but there seem to currently be at least three main groups promoting it. The first group may well be the oldest, and it is based in Oregon. The Oregon nexus seems to be centered on one Samuel Lynn Davis, who has held seminars and written articles on the subject for the extremist publication The American’s Bulletin.

Davis claims to have been the person who thought up the idea, based on an older document he read. Closely linked to Davis is Robert Kelly, publisher of the Bulletin, who allegedly helped Davis with research and certainly helped him with promotion. Another player on the Oregon scene is known only in the pages of the magazine as “Qui Tam.” Davis also acknowledges three people, “Les, Butch, and Terry,” for their research and help. The first of those three individuals is one Les Moffet, known to have helped run Redemption seminars.[6]

In recent issues of the Bulletin, the Oregon crowd started backing away somewhat from the use of sight drafts, saying that “Mr. Davis does not promote, suggest, nor advises in any way for one to use a sight draft.” The magazine suggested that people who did not understand the sight draft used it improperly, either submitting it to a bank for deposit without bothering with the UCC process, and they will likely “end up in jail.” Mr. Davis and the Bulletin, readers were informed, would not accept any responsibility for the mis-use or problems created by the use of Sight Drafts.

The Oregon group also recommends one particular printer who is willing to print the bogus Sight Drafts used in the Redemption scheme. These “custom sight drafts” designed especially for the scheme, can be purchased by The Edge Graphics. They are printed on blue check paper with a VOID pantograph, micro printing, artificial watermarks and a warning band. The price is about $1 per draft.[7]

Davis and Kelly are not the only people in Oregon promoting the Redemption scheme. A former Kelly associate, F. Hayes, who broke with Kelly and went on to publish his own newspaper, The American Voice, has also promoted Redemption materials. In the July 1999 issue, Hayes published an article titled “Commerce Game Exposed: Learn to Play; Accept It for the Value,” in which he outlined the essence of the Redemption scheme and advertised an instruction manual for $15.00. By the September issue, Hayes was enthusiastic about the response to the redemption manual so far. He also complained that there “are those out there who are taking advantage of the great interest people have in this process. They are selling the information, which they got for free (as we did), for exorbitant prices.”[8]

In fact, both Kelly and Hayes apparently did get their information from a single source, as did other promoters of the redemption scheme. Multiple sources from within the patriot movement confirm that the originator of the redemption notion was Roger Elvick (or, according to one source, Elvick and two other, unidentified people).

Roger Elvick is a veteran anti-government activist who has been associated with various right-wing extremist and white supremacist causes over the past several decades. While living in North Dakota in the early 1980s, he was apparently active in the Posse Comitatus—although he denied this at the time—and supported Gordon Kahl, the Posse activist who murdered two federal marshals near Medina, North Dakota, in 1983.

Although connected to various groups, including allegedly Aryan Nations and the Barrister’s Inn School of Common Law (reportedly Elvick later started his own Nitty Gritty School of Common Law), he came to prominence in 1984 as one of the founders and spokesmen for the Committee of the States, an offshoot of the Posse Comitatus created by Californian William Potter Gale, a prominent Posse leader and white supremacist. By then, Elvick was living in California, where he and his son had created an entity called the Common Title Bond and Trust in California.

The main purpose of Common Title was to issue various bogus financial instruments, including sight drafts, bills of exchange, and checks. By June 1987, these instruments had been reported in about thirty states and at least one Canadian province. That month the Federal Bureau of Investigation seized documents belonging to Common Title, as well as an affiliated business in Phoenix, Arizona, Pima and Associates, apparently run by John Godfrey. Elvick, Godfrey, and various associates took advantage of the serious farm crisis of the 1980s, selling the sight drafts to farmers who would ostensibly use them to pay off their farm debts, making payments to Common Title instead.

Of course, banks would not accept the sight drafts. According to Godfrey, Pima and Associates alone wrote between $50 and $70 million of those sight drafts in the summer of 1987. Similarly, in Kansas, James E. Patterson sold sight drafts for $757,000 to pay off the debts of a tire company in Wichita. He received $14,000 and a promised payment program for the drafts, which came from Common Title. Federal and state indictments were handed down in Kansas, North Dakota, Ohio, and South Dakota, while other states filed consumer fraud suits or issued cease-and-desist orders. Convictions and judgments against individuals using such sight drafts continued through 1989.

In April 1990 a federal grand jury in North Dakota indicted Roger Elvick, and three associates. The four were charged with nineteen counts, mainly related to mailing false tax returns, as well as false IRS 1099 forms filed to harass people. They were also indicted for using sight drafts. Two months later the defendants were convicted on all 19 counts. Elvick, however, was already in jail. He had been convicted in Texas on federal charges of passing more than $1 million in bogus sight drafts. These drafts purported to be certified IRS sight drafts. The false 1099 form scheme—which was eventually used by about 400 different people issuing nearly 4,000 such forms for amounts of more than $21 billion—was basically Elvick’s idea, which he compiled into a booklet interestingly titled, “The Redemption Package.” Elvick received a sentence of nearly four years for his role in the scheme.

Thus the essential criminal elements of the Redemption scheme, including bogus sight drafts and bogus IRS forms, all had their origins over a decade earlier. The judge who sentenced Elvick aptly characterized his behavior accurately when he complained to Elvick that “I want to be courteous if I can to you, but I can’t understand the way you so easily and glibly throw around constitutional terms with no apparent logic.” The judge told Elvick and the other defendants that he had no hope that prison would rehabilitate them or deter them. Instead, he hoped the sentence would send a message to deter others from getting involved in such schemes. Judging by the subsequent success of the Redemption scheme, it would seem that the judge’s hopes were to be dashed within a few years.


Oregonians were not the only people who picked up Elvick’s message. Especially energetic in promoting the Redemption scheme were certain Texans, members of an extremist group known as the Republic of Texas. This group formed in late 1995, though within two years it had split into several competing factions, one of which was involved with an aggravated kidnapping and subsequent armed standoff in the spring of 1997.

The faction of the Republic of Texas which chanced upon the Redemption scheme was that headed by “President” Jesse Enloe, and based in the Dallas-Ft. Worth area. Based on the minutes of their meetings during the summer of 1999, the two members of the group most involved with formulating and promoting the Redemption scheme were Enloe and Rice McLeod. Enloe and McLeod regularly spoke on Redemption issues throughout the summer.

At the July 23 meeting, Enloe told the audience that in Idaho an automobile had been purchased using the “Acceptance for Value process.” In the ensuing case, the judge dismissed the case and an FBI agent told the defendant that there was no money in the U.S. treasury and asked the man not to do it again.

The dealer kept the car, but the man was not charged. At another meeting, the secretary recorded the words of McLeod urging people to “attend the seminars. Read the books. Study and understand the Frankenstein system that has been foisted upon us in place of the system our ancestors fought to create.” Enloe and McLeod arranged Redemption seminars that brought attendees not only from Texas but also from far away states. Other members speaking on Redemption issues included John Hunter, Lewis Daniel, and Darrell Franks. It is clear from the minutes that Redemption was indeed the single hottest topic of the summer for this group.

The Republic of Texas may not, however, be the only group in Texas promoting the Redemption scheme. One extremist publication recently had an advertisement for The Timeline Group, selling a one-hour UCC Redemption video featuring Rhett Webster Pease for $18.00. This reportedly took place at a Freedom Seminar in Austin Texas on 9/18/99.[9]


The Buckeye state is another state where Redemption promoters are very active. This seems to be primarily due to the activity of an extremist group based in Uniontown, Ohio, known as Right Way L.A.W.[10]

This common law group is extremely active, holding seminars and meetings, not only in various towns in Ohio, but also in states across the nation. It encourages the formation of Right Way L.A.W. study groups in different areas, and such groups are known to exist as far away from Ohio as New Jersey, New Mexico, Oregon and Washington.

Even as far away as Kasilof, Alaska, a tax protester received a two-year prison sentence because, on the advice of Right Way L.A.W., he had decided not to file his tax returns. Significantly, prospective members of the group must sign an application form in which they must state that they are not an agent of government and will not use or cause to be used the information shared as a basis for government action against the group or its members.

Right Way L.A.W. is led primarily by four individuals: Rick Schramm, Jack Smith, Jeanne Collins, and Mary Keane. The group very actively sells its common law materials at survivalist expositions, on the Internet, and elsewhere, so it is not surprising that it would pick up on the Redemption scheme and begin holding seminars. The only seminars known for sure to have been held by Right Way L.A.W. have been in the Pacific Northwest, but the printed material handed out at such seminars always used Ohio addresses and place names as examples, so it seems reasonable to suspect that they originated in Ohio. No names appear on the materials themselves.

However, the Redemption scheme seems to have attracted the attention not only of Right Way L.A.W., but other prominent anti-government activists in the state. Chief among these are Larry Russell and Bill Elwood, two of the leaders of the common law court movement in the state. Russell, from Canal Winchester, Ohio, a suburb of Columbus, is fresh from his 18-month sentence on escape charges.

In February 1996 a Columbus police sergeant unwisely tried to serve an arrest warrant for driving without a license to Russell while Russell was at a common law court meeting. Members got in the officer’s way while Russell fled all the way to Alaska, where he was arrested while trying to cross the border into Canada.

Brought back in 1997, he represented himself in court and—not surprisingly—lost, but escaped again in 1988. Apprehended three weeks later, he was finally put in jail. Bill Ellwood was the “chief justice” of the most active common law court in Ohio. According to officials at the Ohio Secretary of State’s office, Russell is a repeat visitor to the office, showing new redeemers how to make the UCC filings (presumably for a fee).

Ohio has the distinction of having one of the first arrests stemming from the Redemption process. During the summer of 1999, Cleveland-area residents Joan Susan Bowman and Richard A. Lewis attempted to use sight drafts to pay for eight Cadillacs.

They were arrested, charged with forgery. Police searching their apartments following the arrest found nearly twenty guns, unarmed grenades, and more than 6,700 rounds of ammunition, as well as various examples of extremist literature. According to court records, Lewis was linked to the Cuyahoga County Unorganized Militia.

Interestingly, they tried to title the cars under eight different names, one of which was one Sam Davis, which could very well be both the Sam Davis active in promoting the Redemption scheme as well as the person Jesse Enloe talked about in Texas.

However, Idaho prosecutors could not identify any laws that had clearly been broken, according to the Cleveland Plain Dealer, and Davis was not charged after returning the truck. Following the arrest of Bowman and Lewis, the car dealership received a packet of demands for the social security numbers and tax returns of dealership employees—presumably a preliminary step to filing a Form 8300 or other harassing maneuver. As it turns out, other car dealerships in Ohio have also been given the bogus sight drafts.


The Bowman/Lewis incident in Ohio was not, however, the first arrest stemming from the Redemption scheme. That honor appears to go to Veral R. Smith of Moyie Springs, Idaho. Smith and his wife, Judy Ann Smith, were indicted in March 1999 on tax counts, but a superceding indictment issued in August 1999 included counterfeiting, resisting arrest and assault charges (against the U.S. Marshals who came to arrest him). Smith allegedly tried to use two bogus sight drafts to pay back taxes and to purchase two vehicles. Smith was convicted in October; his wife earlier pleaded guilty.

Promoters from other states are clearly active. One such is Greg Williams, a Washington resident.[11] Greg Williams has given seminars in Montana and Texas, with a cost of $125 per person, spouses free, and the entry fee generously including an edition of his book.

5. What to Do

Unless something is done to stop the spread of this scheme, it is clear that other extremists groups will jump on the bandwagon and become involved. One only has to remember how fast and far the bogus check/money order scheme of groups like Family Farm Preservation, the Montana Freemen and the Republic of Texas spread during the mid-1990s to see that schemes such as Redemption can become wildly popular among the anti-government fringe in no time at all. That result would mean more counterfeit financial instruments, more harassing paper against officials, and perhaps even the possibility of future incidents like the Montana Freeman and Republic of Texas standoffs. Clearly action needs to be taken quickly to determine the extent of this scheme, identify its leaders, and take effective legal action.

A wide variety of potential crimes are linked to this scheme. The state of Texas, whose Attorney General’s office has been very alert to extremist crimes[12] issued a preliminary report on the scheme that noted possible federal violations could include mail fraud, bank fraud, counterfeiting, attempting to interfere with the administration of Internal Revenue Laws, and making false statements to federal agencies. State violations will vary by state, of course, but could include obstruction, fabricating physical evidence, and theft, among others. People interested in the experience of Texas should contact the Office of the Texas Attorney General, P.O. Box 12548, Austin, TX 78711-2548 (512) 936-1407; fax (512) 494-8283.

On the federal level, several agencies have already issued warnings, although these warnings are limited to the sight drafts and do not explain the entire scheme. The Federal Deposit Insurance Corporation warned banks about the drafts in an alert that can be found on the Internet at It suggests that people who find such instruments alert the FBI. The source for this warning was the Office of the Comptroller of the Currency, which earlier issued its own, available at It also advises informing the FBI, as well as the Office of the Comptroller of the Currency, Enforcement & Compliance Division, 250 E Street SW, Washington, DC 20219 (202) 874-4800, fax (202) 874-5301.

Also interested in the issue is the Criminal Enforcement Section of the Tax Division of the U.S. Department of Justice; contact (202) 514-5171, fax (202) 514-0961. Other federal agencies to contact would include the IRS and the U.S. Postal Inspector’s Office.

Special efforts need to be made not only to prosecute civil and criminal violations, but also in terms of educating Secretary of State offices, county recorder offices, banks and lending institutions, car dealership, and all other entities and individuals who may come into contact with this far-reaching scheme. One of the reasons the scheme is popular is because to date the “establishment” has not really recognized or understood it, and certainly has presented no concerted action against it.


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