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.

Roots of Redemption
How can people swallow this tripe? It may be that they're accustomed to the taste.

For the extreme right, which has long been animated by conspiracy theories, redemption "ties together a number of things they have already 'known,'" says Mark Pitcavage, the national director of fact-finding for the Anti-Defamation League, which has studied redemption.

"They 'knew' something was fishy when we went off the gold standard. They 'know' paper money is no good and that any form of money you create yourself is just as valid. They 'know' that if your name appears in all capital letters, it's not really your name. They've already been taught all these things over the years and in different formats, and redemption ties all of them together in one complete explanation. It makes all the pieces of the puzzle fit."

The redemption scam is the last variation on "sovereign citizen" and "common-law" beliefs that spun largely out of the ideology of the Posse Comitatus, a violent, anti-Semitic group active in the 1970s and 1980s.

Closely related to the tax-protest movement, the Posse incorporated an array of pseudo-legal "common-law" beliefs as well as the notion of "sovereignty" — which for many included the theory that whites can declare themselves exempt from laws and regulations.

According to The Terrorist Next Door, a new book by Levitas, the Posse was founded in 1971 by William Potter Gale (see Hate and Hypocrisy). (Gale was an adherent of Christian Identity, a theology that describes Jews as the descendants of Satan and whites as the true Israelites of the Bible.)

A decade later, Gale started a group called the Committee of the States along with antigovernment extremist Roger Elvick. Operating as Common Title Bond and Trust, Levitas' book says, Elvick sold sight drafts to desperate farmers and peddled how-to lessons on using forms to harass enemies. Some of these tactics were outlined in a booklet that Elvick entitled The Redemption Package — apparently the first mention of redemption.

Eventually, Elvick went to federal prison for passing more than $1 million in bogus sight drafts, and was later convicted of counts of tax fraud. But that did not deter others from following in his footsteps.

The tactics he used spread like wildfire in the 1990s, becoming the core of the redemption scam. Not coincidentally, the use of common-law tactics like filing bogus property liens and other kinds of harassing legal papers spread throughout the radical right during the same time period.

Pitcavage says there have been four basic waves of fictitious financial instruments created by extremists:

  • the "public office money certificates" popularized in the early 1980s by tax protester Tupper Saussy;
  • the "bills of exchange" or "sight drafts" devised later that same decade by Elvick and others;
  • the "money orders" and "comptroller's warrants" that were plugged in the early to mid-1990s by Family Farm Preservation, the Montana Freemen, Elizabeth ("The Lien Queen") Broderick, the Republic of Texas and others; and,
  • "redemption sight drafts."

Attacking the New World Order
Apart from making money for its promoters — and offering the false promise of financial liberation for those who manage to follow its arcane rules without going to prison — redemption offers extremists a chance to attack their enemies.

"It gums up the work of government and puts people in the position of directly challenging federal authorities," Levitas explains. "They feel like they are confronting what previously was the abstraction of the nameless, faceless, international conspiracy. They are now engaging it on their own terms and on their own turf."

Many of those who do so are hardened extreme-right ideologues. Among those convicted last December in Michigan, for instance, was long-time common-law activist Rodger Yates, who went to jail in for passing bogus checks fabricated by the Montana Freeman.

Other redemptionists-cum-Patriots include Howard Freeman, a veteran tax protester whose far-right resumé includes a stint with the Northern Michigan Regional Militia. Freeman also peddles a redemption book of his own entitled Money, Debt, Taxes, and the UCC Connection.

Robert Kelly, publisher of The American's Bulletin, covers an array of antigovernment themes even as he pushes redemption in his newspaper's pages. In the last year, Kelly's paper also has been rife with attacks on the IRS (the "Illegal Regiment of Satan"), the Bureau of Alcohol, Tobacco and Firearms, and the federal judiciary.

Alongside ubiquitous ads for redemption materials were articles asserting that the "9/11 Attack was an Inside Job" and pointing to the USA Patriot Act as further proof that the American government is at war against its own citizens.

Enthusiasm for the scam can be hard to quench.

Consider the case of "Bill Jones," an Oregon man accused of a building code violation. Writing in an article headlined "Redemption Win" in the April 2002 issue of The American's Bulletin, Jones says he defended himself in court by invoking the redemption rationale that treats all legal proceedings as commercial transactions.

When your name is called in court, Jones explained, "they are calling it in all capital letters ... which sound the same."

Jones recounted how he "answered with the question, 'Are you calling the debtor, or the secured party?' The judge would not answer my question as he obviously knew what I was up to and could not fall into my trap with a full house of other customers (defendants) in the room. So what he did was after calling my name several times and getting the question over and over, he threatened me with a charge of contempt and armed police to remove me from the court room, which they did as I would not succumb to his threats."

That was simply confirmation for Jones that he was on the right track. In the periodical's next issue, he offered readers still more advice on court strategy.

"They all end up losing," Levitas said of the redemptionists who pursue such court battles. "But a certain percentage become highly radicalized as part of the process, and that creates a new pool of more militant people. It's a great sifting mechanism for determining who is willing to take it to the next level. ... The Patriot movement has a track record of recruiting people based on paper activism and transforming them into those who would use bullets instead."

Levitas may have a point. Large stockpiles of weapons and ammunition, along with antigovernment literature, were found during recent raids on redemptionists in Ohio.

And redemption propaganda also was found in the home of Donald Matthews, a "constitutionalist" who shot and killed a Massilon, Ohio, police officer in August. Matthews was shot to death moments later while being chased by police.