A Grand Strand man is among three people who were found guilty in federal court Thursday of eight counts of mail fraud in a scheme that used false documents and bizarre theories about the legitimacy of the U.S. government to swindle hundreds of people hoping to avoid foreclosures by erasing their mortgage debts.
A jury in Columbia found James Chappell Dew Jr. of North Myrtle Beach guilty of the charges along with co-conspirators Jerry Elmo Hartsoe and Mark Shannon Manuel. A fourth man, Ronald Kevin Hayes, previously pleaded guilty to failing to report knowledge of a felony to federal officials. Hayes faces up to three years in prison. The other three men face sentences of up to 30 years in prison plus a $1 million fine for each felony charge. They will be sentenced at a later date.
The defendants had ties to an anti-government group called the Republic for the united States of America. Their Lexington-based business, Eden Gifted Properties, used a RuSA scheme that promised to pay clients’ debts through a series of documents that appeared legitimate but were worthless. For example, Dew promised some clients he could pay their debts with a $100 billion U.S. Treasury bond he could access, according to court documents.
RuSA members belong to a subculture called “sovereign citizens,” who believe they are not bound by existing laws. The FBI classifies the sovereign citizens movement, estimated to have as many as 300,000 members nationwide, as an extremist, domestic terrorism group.
Sovereign citizens believe that when the government stopped backing the American dollar with gold in 1933, it created a new set of laws that now pledges its citizens – and their future earnings capabilities – as collateral for all debts. The government does this, according to the movement’s theories, by forming a shell person for everyone at birth, creating a secret bank account in that shell person’s name funded with up to $20 million. Sovereign citizens believe they know how to sever their real, flesh-and-blood persona from the shell person the government created in their name, thereby giving them access to their secret bank accounts that they can use to pay their own or others’ debts.
RuSA and similar groups have promoted this theory to people who are facing foreclosures and other debt problems. RuSA members offer to pay off a clients’ debt – for a fee – by accessing a member’s secret bank account.
Court documents show Eden Gifted Properties promised “a significant number of victims in multiple states” the same type of bogus financial help since at least early 2011.
Once a client paid Eden Gifted Properties a fee equal to 10 percent of the debt amount, the company would flood banks and financial institutions with paperwork that was meant to look like official government documents, court records state. Those documents, which often included nonsensical legal-sounding language, were worthless and did nothing to relieve anyone of their debts, according to court records.
The owners of Eden Gifted Properties transferred the fees their customers paid to their own bank accounts and used the money for personal expenses, according to court documents.
Contact DAVID WREN at 626-0281.