“SOVEREIGN CITIZENS” – A CONSPIRACY THEORIST GROUP THAT WREAKS HAVOC ON COURT SYSTEMS THROUGHOUT THE COUNTRY
The sovereign citizens movement (the “Movement”) appears to be gaining momentum and wreaking havoc on court systems throughout the country. (see: The Lawless] Ones, etc.) According to the Anti-Defamation League (“ADL”), there is “significant growth” of this “extreme anti-government movement” with “no signs of stopping.” There have been numerous articles written about the Movement, its foundations, ideologies, members, and activities; however, the subject of this article is limited to the Movement’s effect on the mortgage industry through its members’ use and abuse of the court system.
Before delving into the specifics on that topic, a brief description of the Movement’s origins and beliefs is helpful. Although there are varying descriptions of the Movement, most agree it is based on a conspiracy theory that the U.S. government (the “legitimate government”), described as “a utopian minimalist government which never interfered with the citizenry,” was infiltrated and subverted “with an illegitimate, tyrannical government” (the “illegitimate government”). Sovereign citizens believe that the illegitimate government…enslaved all Americans by creating a special class of citizenship, ‘citizens of the United States,’ members of which would have no rights—only whatever privileges the government deigned to grant them. The government tricked Americans into becoming ‘citizens of the United States’ by offering them privileges, such as driver’s licenses and Social Security, which were actually hidden contracts with the government through which Americans unknowingly gave away their sovereignty. Sovereign citizens believe that Americans can tear up these so-called contracts, regain their sovereignty and become immune to the ‘illegitimate’ government, which they claim has no jurisdiction over them.
Based on these beliefs, sovereign citizens “eschew taxes, Social Security, and almost all licenses, registrations and permits.” Due to their refusal to acknowledge the government’s jurisdiction over them they “rationalize disobeying or ignoring virtually any law or regulation.” The Movement is believed to have originated in the 1970s and 1980s in response to economic struggles brought on by “serious recession and [the] simultaneous farm crisis.” The movement received a “burst of energy” during the mid to late 1990s and again in 2008 ostensibly picking up steam and patronage during times of economic hardship and in response to increasing “anti-government sentiment…” (see: ABA Journal article)[RD2] “Generally, sovereign citizens do not operate as a group or have an established leadership hierarchy. Rather, they act independently or in loosely affiliated groups which come together for training, to assist with paperwork, and to socialize based on sovereign ideology.” (see: introduction for law enforcement[RD3] )
In the mortgage context, these beliefs manifest in several different forms such as mortgage and bank fraud and “fictitious obligations” such as liens, lawsuits, and court orders. (see: CitiMortgage, Inc. v. Hubbard [RD4] ) The preparation and filing of these fictitious documents is now referred to as “paper terrorism.” The ADL described this term as follows:
Paper terrorism involves the use of bogus legal documents and filings, or the misuse of legitimate ones, to intimidate, harass, threaten, or retaliate against public officials, law enforcement officers, or private citizens. Acts of paper terrorism can range from simple and straightforward acts, such as frivolous lawsuits, to more complex strategies, such as filing fraudulent IRS forms alleging that the victim has been paid large sums of money, in order to ‘sic’ the IRS on him or her.
In an example provided by the Federal Bureau of Investigation, the FBI explained a scheme where a sovereign citizen purchases “…property using fraudulent financial documents and then has the property appraised at higher than market value.” The citizen then obtains “a mortgage or line of credit…utilizing the inflated property value…[and]…then either absconds with the funds or uses the line of credit to fund further fraudulent activities.” In another example, a sovereign citizen “filed a harassing lien for $350,000 against a local judge and two attorneys who had been involved in a foreclosure case…” in Florida. Sovereign citizens are increasingly filing these types of bogus liens as explained in an article published by the American Bar Association in May 2014:
According to a 2013 report from the National Association of Secretaries of State, bogus UCC filings have risen dramatically in the past few years, driven by a rise in people identified as sovereign citizens…[T]here [is no] requirement to notify the victim of the false lien. ‘Typically, of course, you don’t find out about it until you get a job offer and you go to sell your house and find that you’re facing this gigantic lien,..[w]hich, of course, you don’t really owe— but it takes thousands of dollars in lawyers to sort out the title and get that settled.’
In that same article, the author described how sovereign citizens’ “use the law as weapons” filing “false liens, false tax documents or spurious lawsuits” which “hurt the victim’s credit, stymie attempts to sell or refinance property, and take years and thousands in legal fees to correct.” The author explained that “sovereigns are known for filing legal-sounding gibberish, usually pro se, learned from other sovereigns who sell lessons in ‘law’ online.” The author elaborated that the sovereigns’ voluminous filings “can double the size of a normal docket” and “frustrate and delay courts as they consider the defendant’s competence and otherwise try to minimize disruptions.” Sovereigns use the above described tactics to delay foreclosure proceedings and once involved in a case, even if not filing bogus claims, a sovereign citizen has “trouble cooperating with even the most basic of requirements.” In the same ABA article, a former tax prosecutor explained: “These are people who are very fond of paperwork…these cases drag on. They file non-meritorious motions which can be fought, but it takes time and it’s expensive.”
Although there does not appear to be a clear end in sight, awareness about this Movement is increasing and the government is acting to remedy the situation. The ABA article explained that at least 17 states now permit recording offices to “refuse to accept bogus filings or expunge them from the record after filing.” Some states offer expedited judicial relief for addressing fraudulent liens and others make filing a false lien a crime. Judges are also becoming savvy to the Movement and its schemes and can often stymie meritless claims and tactics intended to delay and harass at the onset of a case. Stay tuned; we anticipate there will be more to come on this topic.
[RD1]Entire quote In blue to reference Lawless-Ones article
[RD2]Cite to access ABA Journal Article