This article from the FBI about a group of Americans who had claimed to be sovereign citizens and stole dozens of homes and threatened government officials shows just how dangerous these people can be.

The word sovereign means a supreme ruler, especially a monarch which would equate for example to a head of state like the Queen of the United Kingdom or the Pope of the Vatican State. For some odd reason, sovereign citizens falsely believe that they are not subject to U.S. law and therefore can do whatever they want without impunity.

I have personally researched the sovereign citizen movement for many years and have come to the realization that many (not all) of these people are often mentally deranged as I believe is the case with the defendants involved in this story.

According to the FBI, for more than three years, a Pennsylvania group claiming to be sovereign citizens conspired to “steal” approximately 70 foreclosed homes worth millions of dollars and sell them to unsuspecting victims.

The defendants, Steven Hammed, Darnell Young, and Daymond Palmer searched public records to find foreclosed houses in Delaware County that were owned by the government and Wells Fargo that they could steal. They then created what the FBI called “jargon-laden” paperwork claiming ownership of 70 properties worth more than $9 million.

Once they had gained access to the homes through fraudulent claims, they advertised the properties at low prices on Craigslist.

The FBI said that agents could not find the three suspects at first to conduct an initial interview about their claims of sovereign status; they did not live at the addresses listed on their declarations. Agents kept looking, using property records to track them down.

FBI Special Agent Walter Szpak said, “Every time we went to one of these addresses, someone else was living there,” Szpak said. “The tenants told us they had bought or rented the property from the people we were looking for. That’s when we realized what they were doing.”

In the midst of the federal investigation into the fraud, Hameed, Young, and Palmer were charged by local police for offenses such as trespassing. In response, the three played another trick popular within the sovereign movement: “paper terrorism.” They filed more than 250 fraudulent IRS forms against numerous state and local law enforcement officials and judges. The fake 1099-DIV and 1099-INT forms falsely claimed that the victims had been paid hundreds of thousands or even millions of dollars in dividends or interest, according to the FBI.

Because the forms were fake, the victims did not know they had been filed and obviously did not pay any taxes on the income. In some cases, the IRS placed liens against the victims or seized tax refunds they would have otherwise been owed.

“These fraudulent tax forms can have a real impact on victims,” Szpak said. “And, even though they are fake, some of them can remain on victims’ credit reports for years.”

The scheme came to light after local officials in Delaware County, Pennsylvania, received documents declaring sovereign citizen status for three residents. Alarmed, the officials contacted the FBI shortly after receiving the documents in May 2010.

Officials had good reason to be concerned: That same month, two so-called sovereign citizens opened fire on police during a traffic stop in Arkansas, killing two officers. The ambush is just one example of how members of the movement often turn to violence.

Read more from the FBI at the following links:

FBI Press Release

USDOJ Criminal Filing

Moe Bedard
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.