Three South Carolina Residents Convicted for Mail Fraud Related to Domestic Terrorist Group

Three men from South Carolina have been convicted on eight counts of mail fraud in federal court on Thursday, February 6th. The FBI claims the men were part of a domestic terrorist group and used their “sovereign citizens” claims to create bogus paperwork to relieve Myrtle Beach residents of mortgage and credit card debt.

A Columbia, SC jury found James Chappelle Dew, along with co-conspirators Jerry Elmo Hartsoe and Mark Shannon Manuel, guilty of mail fraud. A fourth defendant, Ronald Kevin Hayes, pleaded guilty to failing to report knowledge of a felony to the FBI. Hayes faces three years in prison, while each of the other defendants faces up to 30 years in prison and a $1 million fine per felony charge.

The three defendants ran a business out of Lexington called Eden Gifted Properties, which used a scheme created by an anti-government group called the Republic for the united States of America. The RuSA scheme is called the “redemption theory,” in which sovereign citizens of the RuSA can allegedly tap into secret accounts held by the Treasury Department to pay off their debts, from mortgages to credit card bills. The RuSA believes that the government stopped backing the US dollar with gold in 1933, rather than in 1971, and used its own citizens as collateral. Their beliefs state that the government creates a shell corporation for every citizen with a secret bank account funded for up to $20 million, and the group knows a secret way to “sever” their physical selves from their financial selves and therefore tap into the money.

Sovereign citizens of the RuSA create lots of official-looking paperwork, which is actually fraudulent, and their scams lead to many white collar crimes including money laundering,mail fraud, and tax violations.

The three defendants reportedly created documents that looked official, and promised to pay their clients’ debts by tapping into a $100 billion US Treasury bond. They accepted payment for their promises – which amounted to about 10% of the clients’ debts – but then mailed their bogus paperwork to banks.

The documents Dew and others sent to banks included “complex, legal-sounding language designed to confuse, delay or otherwise obstruct the lawful role of the IRS, the United States Bankruptcy Trustee and the banks,” according to an affidavit by an FBI agent who investigated the case.

The RuSA extremist anti-government group is believed to have around 300,000 followers nationwide.

The owners of Eden Properties used the money funneled into the business through the RuSA’s scheme to fund their own personal accounts, according to court documents.

The three defendants will be sentenced at a later date.

The Strom Law Firm Defends Against Mail Fraud Allegations

As a former U.S. Attorney, Pete Strom handled these types of criminal fraud cases, from RICO violations to mail fraud and bank fraud. If you have been charged with mail fraud contact the Strom Law Firm, LLC today for a free consultation to discuss the most effective defense to your case and how to avoid further personal and professional damage. We handle your case with utmost discretion, exploring every viable strategy to secure a most favorable outlook.