Feds working to put SC ‘Sovereign Citizens’ in prison for getting huge income tax refunds

Assistant U.S. Attorney DeWayne Pearson, his voice tinged with sarcasm and disbelief, stood before a federal jury in Columbia Tuesday and asked alleged tax fraud schemer Jefford Henry how he came to ask for a $990,000 tax refund from the IRS.

“I think that number came out of my head,” replied Henry with a straight face as the jury looked on.

“So you just made it up?” snapped Pearson.

“Yeah,” replied Henry, a man who appeared to be in his 60s. He took the witness stand Tuesday on the trial’s fourth day to testify in his own defense.

Henry, a Lee County mechanic, and four others are charged with conspiring to defraud the government of some $2 million in tax refunds and related charges by filing false tax returns. They spent the money on houses, cars, paying off mortgages and other personal expenses, according to government testimony and evidence in the case.

The case is expected to go to the jury Wednesday. If convicted, Henry and the other four defendants could each get up to 20 years in prison.

According to evidence in the case, Henry and his co-defendants are affiliated with the Sovereign Citizens movement, a loosely knit network of Americans who believe that in many respects, the U.S. government has limited authority over them. Many also believe the federal government has a secret stash of money accessible only by certain citizens who have learned how techniques of how to apply for – and get – sizable tax refunds.

In other testimony Tuesday, Henry co-defendant Bobby McGuire told the jury that he, like Henry, had filed a 1041 tax refund form with the federal government and claimed a refund of $990,000.

The IRS Form 1041 is the form used by estates and trusts. Under the Sovereign Citizens philosophy, people in the United States can use this form to access the supposed secret stash of federal money.

“It (the ability to access the secret government stash) is created through the birth certificate,” McGuire told the jury. He had voluntarily taken the witness stand to explain his beliefs to the jury.

“Do you believe that this account is kept secret?” asked McGuire’s attorney, Jeremy Thompson.

“Yes, sir,” replied McGuire.

McGuire testified he had learned about the special technique by attending Sovereign Nation seminars up and down the East Coast.

Asked by his lawyer how he had requested a $990,000 refund, McGuire said, “It’s totally up to you to determine how much money you want to take out. ... I just wanted to see if the first (request) would go through.”

Unlike with Henry’s, however, McGuire’s didn’t go through. McGuire sent his 1041 refund request to the IRS by paper. It was flagged, and he became part of an FBI-IRS investigation that resulted in the ongoing trial.

According to government witnesses, Henry family members sent in two 1041 refund requests for $990,000 each by electronic filing. Congress has directed the IRS to respond promptly to electronic filings, so the agency sent the money to them without thorough vetting.

McGuire, Henry, his wife Linda Marie Henry, son Jeffrey Henry and Makeshia Lashon Glover are on trial.

This story was originally published December 15, 2015 at 7:04 PM with the headline "Feds working to put SC ‘Sovereign Citizens’ in prison for getting huge income tax refunds."