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Tag: bonded promissory notes

  • LASD: Purported ‘Sovereign Citizen’ Charged With Forging Macy’s Gift Cards In Alleged $218,000 Scheme

    recommendedreading1Macy’s, the American department-store chain famous in real life and in fiction, was the victim of a $218,000 theft at the hands of purported “sovereign citizen” Richard Reyes Duenas and four others, the Los Angeles County Sheriff’s Department said.

    Duenas, 30, recently was arrested in Las Vegas and taken back to Los Angeles to face trial on charges of grand theft, conspiracy to commit fraud, acquiring access card account information to commit grand theft and access card forgery. He is jailed. Bail was set at $218,000, the amount of the alleged theft.

    Also charged (and already successfully prosecuted) for their roles in the scheme were Brent Justin Delgadillo, Noemi Fuentefria, Geovani Vegaion and Daniel Alvarez, LASD said.

    As often is the case with “sovereigns,” deputies encountered Duenas during a 2010 traffic stop, LASD said.

    Duenas “became resistive and was subsequently arrested,” LASD said. A search of his vehicle led to the discovery of “16 fraudulent Macy’s Department Store gift cards,” LASD said.

    From a June 21 statement by the sheriff’s department (italics added):

    A subsequent investigation determined that Richard Reyes Duenas was obtaining Macy’s Department Store gift card account numbers and associated PIN codes, which he utilized to prepare forged Macy’s gift cards, via inactive Macy’s gift cards stolen from Macy’s Department Stores. The forged Macy’s Department Store gift cards were sold at street level to consumers by Richard Reyes Duenas’ associates. The fraudulent gift cards were also utilized by Richard Reyes Duenas, and his associates, to make Macy’s Department Store purchases of Apple electronics. Richard Reyes Duenas had been connected to the theft of approximately $218,000 in Macy’s Department Store gift card dollars.

    Duenas, though, left Los Angeles before he could be prosecuted on the charges. But deputies discovered he was in Las Vegas, and asked police there to arrest him, LASD said.

    A total of 41 Macy’s Department Stores were targeted in the scam, LASD said, “ranging from the Oakland area to San Diego.” Because Oakland is in Northern California and San Diego is in Southern California, the circumstances suggest a criminal network targeting Macy’s was operating virtually throughout the entire state.

    Here is a list of the cities in the scammers’ wakes, according to LASD. Los Angeles, Burbank, Chula Vista, Torrance, El Cajon, San Diego, Culver City, Glendale, Santa Barbara, Laguna Hills, Lakewood, North Hollywood, Cerritos, Manhattan Beach, Mission Viejo, Montclair, Montebello, Newport Beach, Escondido, Northridge, National City, Pleasanton, City of Industry, San Bernardino, Daly City, Redondo Beach, Costa Mesa, Hayward, Sunnyvale, Thousand Oaks, Canoga Park, La Jolla, Ventura, Rancho Cucamonga, and Woodland Hills.

    Macy’s sponsors the annual Macy’s Thanksgiving Day Parade in New York City. It also is immortalized in the 1947 movie “Miracle on 34th Street,” a Christmas classic that suggests a man hired by Macy’s to play Santa Claus is the real Santa.

    “Sovereign citizens” have been implicated in all sorts of commercial crimes. In 2011, for instance, Christopher H. Cannon was found guilty in federal court in the Northern District of Indiana of using counterfeit currency to pay for big-screen TVs from Sears.

    In November 2012, four purported “sovereigns” were arrested in Florida on charges they were passing counterfeit checks.

    Purported “sovereigns” also have been known to participate in tax scams, bids to scam banks and extort money from public officials, Ponzi schemes, securities-fraud schemes and scams involving purported “bonded promissory notes.”

  • The Bizzare Saga Of Denny Ray Hardin: 10-Year Prison Sentence Of Purported ‘Sovereign Citizen’ Whom Prosecutors Said Tried To ‘Extinguish Over $100 Million Worth Of Debt’ Upheld By Appeals Court

    EDITOR’S NOTE: In August 2011, the FBI warned of debt-elimination schemes advanced by purported “sovereign citizens.” The story below outlines a “bonded promissory notes” scheme advanced in Missouri by Denny Ray Hardin. It is worth noting that AdSurfDaily figure Kenneth Wayne Leaming is jailed near Seattle awaiting trial in a case that alleges he issued a “bonded promissory note” and filed false liens against public officials.

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    The 10-year prison sentence of a purported “sovereign citizen” who hatched a scheme in which bogus financial products were sold to customers in a bid to eliminate their debts has been upheld by the U.S. Court of Appeals for the 8th Circuit.

    Denny Ray Hardin, 53, of Kansas City, Mo., was convicted in September 2011 of 11 counts of creating fictitious obligations and 10 counts of mail fraud.

    The circumstances that led to Hardin’s arrest and trial were just plain bizarre. Hardin, according to prosecutors, divined a a construction by which he was a private banker authorized to issue “bonded promissory notes” (BPNs) backed by the government.

    Customers were told they could use Hardin’s manufactured notes to wipe out their debts, and Hardin charged $100 or more for the notes, prosecutors said.

    Hardin called his purported bank “The Private Bank of Denny Ray Hardin,” and he operated it from his residence, prosecutors said. The scheme in part operated online, but also through the mails.

    “Hardin defrauded customers by selling them BPNs with the false promise that these fictitious instruments can discharge debts,” prosecutors said. “Hardin defrauded creditors by presenting them with worthless BPNs.”

    U.S. District Judge Gary A. Fenner sentenced Hardin to 10 years. An appeal followed.

    In upholding the sentence, a three-judge appeals panel from the 8th Circuit noted that Fenner could have sentenced Hardin to nearly 34 years in prison but used his discretion under the circumstances of the case to depart downward, ordering a 10-year-sentence and three years’ supervised probation after Hardin’s release.

    Records in the case show that Hardin, in October 2010, was ordered “committed to the custody of the United States Attorney General for hospitalization and treatment” after he raised issues of his own competency to stand trial.

    In May 2011, Hardin was ruled competent to stand trial.

    At a pretrial conference in August 2011, prosecutors announced they had at least 30 witnesses and 487 trial exhibits.

    Hardin, who had decided to represent himself and had been appointed stand-by counsel, “refused to participate in the proceeding and objected to the Court’s jurisdiction, according to a memo by the presiding magistrate judge. (Read memo at Leagle.com).

    The conviction followed on Sept. 14, 2011, and the appeals panel last week upheld the 10- year sentence.

    Among other things, the panel rejected as “meritless” Hardin’s claims that the district court had no jurisdiction over him.

    These are among the findings of the appeals panel (italics/bolding added):

    Witness testimony and documentary evidence established that (1) Hardin produced
    fictitious financial instruments that he called “bonded promissory notes” and (2) Hardin claimed that these notes had monetary value to discharge debt and were authorized by the United States Department of Treasury. Hardin typically sold the bogus notes for a fee and then mailed them to financial institutions on behalf of the purchaser with the stated purpose of extinguishing that purchaser’s debt, including mortgage debt. Hardin continued this course of action even after he was advised about the illegality of his conduct. See 18 U.S.C. § 514(a) (producing fictitious obligations with intent to defraud), § 1341 (using mail in a scheme to defraud).

    At sentencing, the panel recounted, “additional evidence was introduced to show that Hardin sold the fictitious instruments to over 50 customers and attempted to extinguish over $100 million worth of debt . . .”

  • Washington State Man Sentenced To 25 Years In ‘Foreclosure Relief’ Scam; Judge Calls Jeff McGrue ‘Heartless’; FBI Says He Issued Nonexistent ‘Bonded Promissory Notes’ Purportedly Drawn On U.S. Treasury To Fleece Lenders And People ‘At The End Of Their Rope’

    Photo source: FBI

    A Washington state man who ran a foreclosure-rescue scam by telling victims he could save their homes gathered more than $1 million from people “at the end of their rope” and tried to bilk lenders out of at least $55 million, federal prosecutors and the FBI said.

    Jeff McGrue, 51, of Tacoma, targeted California borrowers. He has been sentenced to 25 years in federal prison.

    U.S. District Judge Otis D. Wright III called McGrue “heartless” when ordering the sentence, prosecutors said.

    Documents in the case suggest McGrue fashioned a purported remedy for distressed homeowners that mixed redemption fraud with standard hucksterism. As is typical in foreclosure-rescue schemes, McGrue got paid up front, and his customers lost everything.

    Redemption fraud normally is associated with tax fraud and efforts to gain illegal tax refunds, often for spectacular sums. Under the crackpot redemption theory, the U.S. government maintains secret accounts for individual citizens that can be tapped to retire tax debt and other forms of debt.

    In his scam, McGrue appears to have borrowed from the redemption theory and applied its bizarre conjecture to mortgage debt relief.

    Through a company known as Gateway International, McGrue and “others falsely told homeowners that, if they paid an enrollment fee and monthly rent and signed over title of their homes to Gateway, McGrue would use ‘bonded promissory notes purportedly drawn on a U.S. Treasury Department account to pay off their mortgages, thereby stopping foreclosure proceedings,” the FBI said.

    “The homeowners were falsely told that lenders were legally required to accept the notes, that they would be able to buy their homes back from Gateway International at a discount, and that they would receive up to $25,000, even if they chose not to re-purchase their houses,” the agency said.

    But McGrue “did not own any bonds and did not have a U.S. Treasury Department account,” the FBI said. “Nor could he have the type of account described to homeowners because the Treasury Department does not maintain accounts that can be used to make payments to third parties.”

    More than 250 customers enrolled in the McGrue plan, but he “did not save a single home,” prosecutors in the Central District of California said.

    Real-estate agents who did not do their homework but nevertheless were eager to earn commissions helped popularize the foreclosure-relief scheme, according to the government.

    Strange, foreclosure-related events are occurring across the United States. In the Atlanta area, for example, so-called “sovereign citizens” have been moving into foreclosed homes and issuing fake quit-claim deeds designed in theory to undermine lenders’ interests in properties.