New Multi-Million Dollar Scam Takes off in Antigovernment Circles

The latest multi-million dollar scam in the world of antigovernment zealots is taking off across the nation.

Scam artists and right-wing extremists are hawking a pseudo-legal strategy that promises both financial gain and the opportunity to take revenge against what is seen as a sham government. Called "redemption," the technique has earned its promoters untold profits, buried courts and other agencies under tons of worthless paper, and led to scores of arrests and convictions throughout the United States.

In just one roundup of redemption activists this August, authorities in Cuyahoga County, Ohio, indicted people on charges of racketeering and other violations in a scheme involving nearly million in worthless "sight drafts."

The suspects allegedly tried to use the check-like drafts to buy cars and computer equipment, withdraw cash from banks and pay off debts. Some defendants also used fake legal instruments "to terrorize, attempt to intimidate and harass" government officials and law enforcement officers, according to the indictment.

Last December in Michigan, another 12 redemptionists were convicted on similar allegations in a scam that included a remarkable $550 million in bogus sight drafts, as well as court filings intended to trigger probes of judges.

And that is just the beginning. While there are no figures to prove it, authorities believe fraudulent redemption and related antigovernment financial scams are being run in all states. Treasury Department officials describe a flood of redemption-style sight drafts that began appearing at the astonishing rate of about 1,000 each week in late 1999. And officials blame redemptionists for much of the increase in Suspicious Activity Reports (SARs) — a near quadrupling since 1996 — that they fill out for suspect transactions in amounts of at least $5,000.

Redemption is the latest in a seemingly never-ending series of financial scams to course through the American radical right. Whether or not its promoters believe their own claims, the scam has caught on over the last few years in part because it relies on theories popularized by the antigovernment and racist right. For proponents, it marries up political ideas with good, old-fashioned greed.

Like a whole series of other antigovernment paper schemes, redemption represents "the intersection between the financial interests of con artists and the antigovernment political message of the 'Patriot' movement," says Daniel Levitas, an author who has studied the historical antecedents of this latest ripoff.

Pony Up for Freedom
What redemption promoters sell — through hundreds of pricey books, tapes, CD-ROMs, Web sites and interminably dull seminars saturated with quasi-legalistic mumbo-jumbo — is a cockamamie version of U.S. history in which the federal government has enslaved its citizens by using them as collateral against foreign debt.

The government, they argue, is financially bankrupt, and the Uniform Commercial Code (or UCC, which in real life governs commercial transactions) is actually the supreme law of the land. Importantly, any document to which your name is affixed in all capital letters is not legally binding, the redemptionists say. Corrupt judges and lawyers know all this, but they all have been sworn to secrecy.

Luckily, add the salesmen, there is a way out.

By filing particular government forms in a particular order, and by using precisely the right language (don't worry: the redemptionists will tell you how), you can redeem your stolen assets, reclaiming your God-given freedom and a whole lot of money, too.

Using obscure parts of the UCC, you can "capture" your "strawman," which in redemption-speak is the entity (identifiable as your name written out in all capital letters) that the government created to represent the value of each individual life.

Then you can "accept for value" any problematic government document — a court summons, for instance, or an order to pay child support or back taxes — and "redeem" it by drawing on your strawman account. You can also create sight drafts that draw on this phantom account, and use them to pay electric bills or buy yourself a Cadillac.

And if anyone tries to stop you, you can counterattack with any of a whole toolbox of weapons, ranging from bogus property liens and income reports (sent to the IRS to provoke an audit) to seemingly realistic court orders.

The details can be eye-catching. Some redemptionists say that whenever a person is born in the United States, approximately $630,000 is deposited into a special government account. If only you know the right procedure — and the redemptionists will gladly sell you the details — you will be able to withdraw funds from this account, which was supposedly created by the 1935 Social Security Act.

Redemption is a charade. It is time-consuming, nonsensical, and virtually impossible to understand. That it doesn't work goes without saying — many people now in prison are mute testimony to the scam's many perils. And it costs a small fortune to master. For while redemptionists say they'll make you rich, they almost always want to be paid first, in dollars printed by the government they hate.

And If You Believe That...
No single group or leader unites today's redemption enthusiasts, and their motives vary widely. But first and foremost, redemption is a business.

Probably the leading redemption cheerleader is Robert Kelly, the publisher of a radical antigovernment newspaper called The American's Bulletin, based in Central Point, Ore. Kelly's paper overflows with ads for redemption products, and he offers telephone consultations, among other things, at $50 an hour.

The Aware Group, based in Greenville, S.C., sells a $995 redemption membership package to financial salvation-seekers — and claims 11,000 members. The Group Liberty Redemption Pack goes for $525. And Right Way ("Learn and Win"), located in Akron, Ohio, peddles a lengthy list of cassette tapes, including the $135 "The Whole Story" set, which describes "how government officials became trustees, not only for our property, but also to our bodies."

Then there's Better Books and Cassettes of America (BBCOA), based in the Tarzana neighborhood of Los Angeles, which hawks redemption books, videos, audiocassettes, Internet radio broadcasts, conference calls, CD-ROMs, and blank government forms — everything you will need for personal liberation.

For a mere $95, you can become a affiliate and receive a 10% commission on sales. Cough up $300 and you can attend an all-day redemption seminar. For $800 (or $1,125 per couple), you can have all the necessary paperwork filed for you.

BBCOA's hottest product is a book and CD called Cracking the Code. The group claims it has sold 5,000 copies of this blueprint for redemption.

From the book's preface, we learn that "Big Brother's modus operandi consists of bringing down the full might of the government upon any unlucky 'citizen' that crosses paths with its divine agenda (absolute ownership and control of all property and people). ... Big Brother's operatives wreak holy hell on a daily basis against any they choose, but continually walk away from the carnage unscathed. For those who follow the precepts as presented in this manual, such days are numbered, if not over."