UPDATE: Charles Daniel Koss, Purported Missouri ‘Sovereign Citizen,’ Convicted In ‘Redemption’ Swindle Against Social Security

Charles Daniel Koss, a 63-year-old purported “sovereign citizen” from Independence, Mo., faces up to 61 years in federal prison after being convicted in a “redemption” scam targeted at Social Security.

Koss was convicted of two counts of theft of government money, one count of Social Security disability fraud, one count of mail fraud and one count of transmitting a false negotiable instrument with the intent to defraud the government, prosecutors said. The false negotiable instrument was a purported “Registered Private Money Order” mailed to the Social Security Administration purportedly to repay $212,768 Koss owed the agency after it was determined he’d defrauded Social Security and had received disability payments to which he was not entitled between September 1994 and January 2010.

From the office of U.S. Attorney Tammy Dickinson of the Western District of Missouri (italics added):

Koss told federal agents in interviews during the investigation that he has studied redemption theory. Redemption theory involves bogus claims that when the United States government abandoned the gold standard in 1933, it pledged its citizens as collateral so it could borrow money. The movement also asserts that common citizens can gain access to funds in secret accounts using obscure procedures and regulations. According to the theory, the government created a fictitious person (or “straw man”) corresponding to each newborn citizen and each citizen has an alleged secret trust account with the United States Treasury. The theory also claims that through obscure procedures under the Uniform Commercial Code, a citizen can “reclaim” the “straw man” and write negotiable instruments against its accounts. Its adherents sometimes call themselves “sovereign citizens.” The “sovereign citizen” movement is a loosely organized collection of groups and individuals who have adopted anarchist ideology. Its adherents believe that virtually all existing government in the United States is illegitimate and they seek to “restore” an idealized, minimalist government that never actually existed.

And, Dickinson’s office added, “Redemption theory and sovereign citizen beliefs are totally without merit and they have no basis in law or fact. Individuals often use these ideas to further various fraudulent schemes.”

Even as he was receiving disability payments, prosecutors said, Koss worked full time at a business known as Embassy Mortgage. He also led an active life-style, including “bowling, golfing, horseshoes, boating, activities at his lake house and frequent visits to Ameristar Casino, where he gambled a total of $260,000 during this time.”

Koss “failed to report any change in his health condition or any income from Embassy Mortgage to the Social Security Administration,” prosecutors said.