The "Straw Man" Sight Drafts (posted September 18, 1999)
(amended July 12, 2008)

There is a "theory" floating around the movement which is absolutely crazy, yet it is promoted as "the hot new solution." This new theory has its origins with a man named Roger Elvick, who has been involved with some con jobs in the past. See Bye v. Mack, 519 N.W.2d 302 (N.D. 1994). Roger Elvick was years ago promoting the idea of sending forms 1099 to the IRS for its agents who stole your constitutional rights. This was a part of his "redemption process" back then, and if you wish to learn about what happened to one party who followed Elvick's advice, read United States v. Wiley, 979 F.2d 365 (5th Cir. 1992). Many others who followed Elvick's advice also went to jail. See United States v. Dykstra, 991 F.2d 450, 453 (8th Cir. 1994)("He voluntarily made the decision to purchase and use Roger Elvick's 'redemption program,' and he admitted that he did not pay any of the purported recipients any of the amounts reflected on the 1099 Forms. Because he knew he never paid the individuals, he could not have believed that the forms, which he signed under penalties of perjury, were in fact true and correct. The evidence also established that appellant acted corruptly in pursuing the retaliation scheme, in violation of 26 U.S.C. Sec. 7212(a)"). Roger was convicted for this activity. See United States v. Lorenzo, 995 F.2d 1448 (9th Cir. 1993); and also United States v. Hildrebrandt, 961 F.2d 116 (8th Cir. 1992); United States v. Rosnow, 977 F.2d 399 (8th Cir. 1992); United States v. Anderson, 353 F.3d 490 (6th Cir. 2003); and United States v. Salman, 531 F.3d 1007 (9th Cir. 2008), for other Elvick victims.  

While there, Roger developed this new argument. In essence, he contended that everyone's birth certificate constitutes ownership in "America, Inc." and we all have stock in this corporation, which stock is represented by these birth certificates (see Lodi v. Lodi, 173 Cal.App.3d 628, 219 Cal.Rptr. 116 (1985), where similar arguments were rejected; and Dose v. United States, 86 U.S.T.C. ¶ 9773 (N.D.Iowa 1986)("Petitioner * * * informs the Court of [his] 'notorious rescission of [his] social security number' and rescission of his birth certificate, which documents had previously made him a 'member of Corporate America (commune)' converting him into 'a slave of the commune subject to the regulation and control of the Federal Government' * * * the fact that Dose has attempted to rescind his social security number and birth certificate by sworn affidavit is irrelevant * * *")). According to Roger, the big banks and other financial institutions regularly trade in these birth certificates, buying and selling them to others. Of course according to this new argument, you can do the same thing.

From here, the argument goes down hill and becomes even more bizarre. I know precisely what the major features of this argument are  because I have read the course material and even viewed a video tape of one meeting where this "program" was discussed; this contention is utterly crazy. However, many people are studying this new argument and even issuing "sight drafts" based on it. But the promoters of this argument like Elvick, Wally Peterson, Ron Knutt and Dave DeReimer are really selling federal indictments. You are free to swallow this scheme, but be ready to face criminal charges, the maximum term of imprisonment of which is 25 years.

Here is late breaking news, an e-mail, regarding the law enforcement activity against the redemption advocates:

January 11, 2000 - @:25 PM, EDT

I was just informed that a Federal swat team, approximately 30, raided a farm house near the town of Evart, Michigan this AM.  The raid started at approximately 6:00 AM and lasted 4 hours until 10:00 AM.

They captured the occupants, made them sit and watch the proceedings. They were told nothing except they were "Not under arrest".

The raid was pursuant to a Grand Jury Subpoena and contained a Warrant for any and all items relating to "Accepted for Value", "sight drafts" and anything to do with "IRS" and United States "Securities".

I was told that there were 22 people on a list that were raided this AM.

At least one of the occupants there was served a Grand Jury subpoena to appear and testify in February.


Be Advised!

So what is going to happen? I bet that those who advocated using "acceptance for value" to refuse criminal process like an indictment or information will be charged with obstruction of justice, and they will be tied into a giant conspiracy of those who told others to send in drafts drawn on the U.S. Treasury. This stupidity will just be another instance where the freedom movement will be held up to the press and the rest of America as a bunch of crackpots, nuts and fruitcakes, and "dangerous" ones at that.

Have people already gotten into trouble already by using the "redemption process" sight drafts? Hyla Clapier is a sweet, little old lady from Idaho. She was convinced last year by the redemptionists to try to buy a car with one of those "redemption process" sight drafts drawn on the U.S. Treasury. Her effort brought her an indictment, trial and conviction. In late April, 2000, I received a call from an Ohio newspaper reporter and was informed that a man in his local community had attempted to buy 8 Cadillacs with those sight drafts. I was also informed that the man was being prosecuted for several felonies. Is the "redemption process" sight draft program anything but another crackpot idea? I think so.

There are certain very fundamental flaws within this argument which are as follows:

     Flaw 1: The birth certificate is not the basis for the creation of credit in this country.

Economic texts and a wide variety of other materials plainly demonstrate the manner by which credit ("money") is created in this country: a bank (or central bank like the Fed) extends credit in exchange for the receipt of some note or other financial obligation executed by either a private party or government. At the federal level, the Federal Reserve extends credit to the U.S. Treasury simply by book-keeping entry made in favor of the United States when the Fed buys obligations of the United States. In contrast, a birth certificate is not a note or other debt instrument, contrary to what Roger Elvick, Ron Knutt, Wally Peterson or idiots like Dave DeReimer may contend. Simply stated, a birth certificate is not a note, bond or other financial obligation, and it is not sold to financial institutions, contrary to the blatant lies of the "liaryer" promoters of this argument. In short, the birth certificate is not the foundation for the credit used as money today.

Why don't you ask the advocates of this argument to produce some reliable documentation that birth certificates are the basis of credit in this country rather than the instruments mentioned above? It is simply foolish to rely on the word of Roger Elvick. It is even more foolish to believe anything that DeReimer declares.

   Flaw 2: The birth certificate cannot be, as a matter of law, a guarantee of debt.

A debt is created by a debtor making a promise to pay a creditor a specified amount of money over a specified period of time. Merchandise purchased on credit involves the buyer delivering a promissory note to the seller wherein he promises to pay a specific periodic amount with interest until the debt is paid. When a borrower obtains a loan, he delivers a promissory note to the lender. A promissory note by definition requires the payment of certain specific amounts of funds to the holder of that note. Is a birth certificate a promissory note? It simply cannot be because the party named therein has no obligation to make any payment of anything to some alleged holder thereof (and traffic tickets, indictments, IRS documents and letters, etc., also are not commercial instruments).

But ignoring for the moment this major fatal flaw, presume for purposes of argument that a birth certificate is indeed a promissory note. The redemption advocates claim that the "straw man" is liable to pay some unspecified amount to some unspecified creditor who holds the financial instrument known as a birth certificate (I have been unable to learn from the advocates the name of the ephemeral creditor). They further argue that the "counterpart" of the "straw man," you, must answer for this debt of the "straw man." This is legally impossible. I view such an argument as evidence of lunacy.

The "statute of frauds" originates from the common law and every state today has a general "statute of frauds." For example, here in Alabama, we have a "statute of frauds" found in Ala. Code §8-9-2, which states that "every special promise to answer for the debt, default or miscarriage of another" must be in writing and signed by the party to be charged. This same type of requirement appears in our version of the UCC, Ala. Code §7-2-201, which requires contracts for the sale of goods of more than 500 bux to be in writing and subscribed by the party liable. Precisely where is your agreement to answer for the debt of the straw man? If such an agreement exists, have you signed that agreement making you legally liable to pay that debt of the straw man? The truth of the matter is that such a signed agreement does not exist. But without your signature to a guarantee making you liable for this debt, you cannot legally be liable.

The advocates of this insanity further contend that the international banks that hold these birth certificates as security for some unknown financial obligation have a claim against you for your whole life, unless of course you "redeem your straw man" by perfecting your claim against him by filing a Form UCC-1 financing statement. Can you really be legally responsible for some debt for the rest of your life? Again, our statute of frauds found at Ala. Code §8-9-2 requires that "every agreement which, by its terms, is not to be performed within one year from the making thereof" must be in writing and signed by the party to be charged. The redemptionists assert that whenever a child is born and his birth certificate is filed in DC and later bought by some big bank, that creditor owns you for the rest of your life. We all know that the average life expectancy of a baby is longer than a single year. Just where is this agreement signed by you (apparently on the day you were born) which cannot by its very terms be performed within a single year? Have you ever signed such an agreement? The truth of the matter is that every aspect of this redemption theory flies in the face of the statute of frauds.

   Flaw 3: Our bodies and our labor are not articles of commerce.

The "redemption process" advocates contend that via our birth certificates, we have pledged our bodies and the labor of our lifetimes to those creditors who hold these birth certificates; in essence, our labor is commerce according to this theory. The purchase of these birth certificates is allegedly performed in Washington, DC. However, at this place where federal law clearly applies, federal law declares via 15 USC, §17, that "The labor of a human being is not a commodity or article of commerce." Does this "redemption" argument not plainly conflict with federal law?

     Flaw 4: The 1935 Social Security Act did not create an account for everyone born in this country in the amount of approximately $630,000.

In review of the material I have been provided regarding this argument, it is plainly alleged that whenever anyone is born in this country, a sum of approximately $630,000 is deposited into some account at the US Treasury or the Social Security Administration and that this account was created by the 1935 Social Security Act. This contention is utterly false as may be seen simply by reading the act which is posted to the SSA web site.

   Flaw 5: The above named account is not the "Treasury direct account."

Neither the original Social Security Act nor any amendment to it created an account known as the "Treasury Direct account." However, there is such an account established by Treasury for those who routinely purchase US notes and bonds. A description of this account may be found at 31 C.F.R., part 357 and specifically 31 CFR § 357.20. Those who assert that everyone has such an account know nothing about such accounts. And there is no "public side" and "private side" for these accounts.

   Flaw 6: You cannot write sight drafts on the Treasury of the United States via this non-existent account.

If you send any such sight draft to anyone, you may be prosecuted for violations of 18 USC §514 which provides as follows:

Sec. 514. Fictitious obligations

(a) Whoever, with the intent to defraud –

(1) draws, prints, processes, produces, publishes, or otherwise makes, or attempts or causes the same, within the United States;

(2) passes, utters, presents, offers, brokers, issues, sells, or attempts or causes the same, or with like intent possesses, within the United States; or

(3) utilizes interstate or foreign commerce, including the use of the mails or wire, radio, or other electronic communication, to transmit, transport, ship, move, transfer, or attempts or causes the same, to, from, or through the United States,

any false or fictitious instrument, document, or other item appearing, representing, purporting, or contriving through scheme or artifice, to be an actual security or other financial instrument issued under the authority of the United States, a foreign government, a State or other political subdivision of the United States, or an organization, shall be guilty of a class B felony.

(b) For purposes of this section, any term used in this section that is defined in section 513(c) has the same meaning given such term in section 513(c).

(c) The United States Secret Service, in addition to any other agency having such authority, shall have authority to investigate offenses under this section.

Violations of this statute provide for a maximum period of 25 years imprisonment.

A friend of mine from Kooskia, Idaho attended a meeting where Jack Smith of Wrong Way Law spoke regarding this new "redemption process." During a break at this meeting, my friend asked Smith to provide specific authority and documentation demonstrating that this was a bona fide argument. Smith admitted that this new argument was 100% theory.

The "redemption process" is one of the craziest arguments I have ever seen arise within this movement. Yet, people blindly accept this argument without question or investigation.

Latest News About the Redemption Process (Feb. 23, 2001):

This e-mail was received this date; it concerns one of the unfortunate followers of the process who was recently indicted:

Ballard man doubts U.S. existence

By: BILL ARCHER, Staff February 19, 2001

BALLARD - The small Monroe County farming community of Ballard seems an unlikely place for a story with national implications to emerge, but that's exactly what is taking place. One of the community's residents, Rodney Eugene Smith, is involved in litigation that calls into question the very existence of the U.S. government.  Smith, 63, seems quiet, polite and soft-spoken in his court appearances. Like about anyone would, he expressed a preference to be seated in the audience gallery during hearings. But unlike everyone in the federal courtroom in Beckley on Thursday, he was in the custody of U.S. Marshals, and therefore, had to sit at the defense table.

U.S. District Judge David A. Faber of the Southern District of West Virginia had ordered him to take a mental competency exam at a hearing on Feb. 5 in Bluefield. At that time, Faber questioned the "nonsensical" motions Smith has been filing in the case involving the serious federal criminal charges he faces.

Smith's life isn't necessarily an open book. At least eight years before appearing in federal court in the Southern District of West Virginia, Smith was convicted in the State of New York for passing fraudulent documents - a felony. A similar set of circumstances led to his Dec. 6, 2000, arrest and initial appearance before U.S. Magistrate Judge Mary S. Feinberg.

The charges that brought Smith into the federal courts in Bluefield and Beckley involved passing four "bills of exchange," totaling under $50,000, to various people and entities. The Internal Revenue Service agent heading the investigation characterized the drafts as being associated to "fictitious obligations." Since his arrest, the government's initial complaint has expanded to include charges of possession of firearms by a convicted felon. A Beckley grand jury issued a "superseding indictment" against Smith in January.

None of that seems to faze him. Based on his statements to the court as well as the voluminous number of documents Smith has filed in this and other cases he is associated with in federal court, the entire process seems to be an exercise in "acceptance for value."

The federal government and several states are aware of the entire "acceptance for value" concept. The U.S. Department of Justice is constantly monitoring any surfacing of what they term the "Redemption Scheme." As of June 2000, 16 states including Arizona, Colorado, Florida, Hawaii, Idaho, Illinois, Missouri, Montana, Ohio, Oregon, South Dakota, Texas, Utah, Washington, Wisconsin and Wyoming have passed at least some laws - in several instances several laws - to protect public officials and private citizens from becoming victims of the scheme.

Much has been written about the evolution of the so-called "redeemers," but the thumb nail version goes like this. Redeemers (who don't refer to themselves by that term) are essentially a composite of several fringe (militia-like) organizations that tend to hold some very strong anti-government beliefs.

During Smith's hearing Thursday in Beckley, Faber made reference to two specific documents that he said helped the court understand some of the phrases Smith has been using in court and in his "pro se" (self-represented) court filings. Faber referenced a paper by Mark Pitcavage, Ph.D., titled "Old Wine, New Bottles: Paper Terrorism, Paper Scams and Paper 'Redemption,'" published Nov., 8, 1999, and "The Radical Common Law Movement and Paper Terrorism, The State Response," dated June 2000, by Denise Griffith and L. Cheryl Runyon.

At the risk of oversimplification, the independent researchers and the state and federal agencies mentioned in the reports, claim that "redeemers" trace their roots to a murky event in 1909, that somehow - in redemption practitioner belief - caused the United States to go bankrupt. Pitcavage states that in the redeemer's scenario, the World Bank gave the U.S. a 20-year moratorium to get its financial act together. However, when that failed to happen, the stock market crashed and America was thrown in the depths of the Great Depression.

Redeemer beliefs, according to Pitcavage and Griffith, are interwoven with significant developments in American history including passage of the U.S. Social Security Act of 1935, and the change from a "gold standard" monetary policy to a money system backed by the Federal Reserve, founded in 1913. The researchers claim a thread of continuity connects present day paper terrorists with high-profile groups such as the Texas Freemen, the Branch Davidians and others.

Griffith wrote that anti-government activity "escalated to unprecedented levels during the 1009s," and referred to the 1992 confrontation between Randy Weaver and federal agents at Ruby Ridge, Idaho, as well the 1993 federal action at the Branch Davidian compound at Waco, Texas, as being some of the more prominent events.

"It was the 1996 standoff at the Freemen compound in Montana, however, that helped shed national light on a quieter, less visible form of protest that is being played out in the nation's judicial system," Griffith wrote. "...the filing of frivolous liens against the property of public officials." She added that clearing the fraudulent liens, "clogs an already overburdened judicial system."

Smith has filed documents indicating that Rodney Eugene Smith will "accept for value" and documents filed on RODNEY EUGENE SMITH, spelled in all capital letters. Smith refers to HJR-192, a House Joint Resolution passed by Congress on June 5, 1933, among the massive federal New Deal package, that redeemers interpret as the nation's declaration of bankruptcy.

Redemption scheme practitioners cite the Uniform Commercial Code as defined in HJR-192 as their vehicle for recovering what they call their "straw men" or "stramineus homo," an entity they claim the government created to serve as a conduit to extract energy from flesh and blood citizens. They claim each person's "straw man" is referenced by the government in all capital letters.

Subscribers to this philosophy appear willing to invest whatever is required of them to liberate or "redeem" their straw man. The passing of fraudulent documents, such as the bogus "bill of exchanges" Smith was arrested for, as well as other bogus documents called "sight drafts" are considered means of liberation, according to Griffith and Pitcavage.

The Treasury Department's Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation issued alerts to banking officials, warning about the fraudulent sight drafts and instructing bank officials to notify the Federal Bureau of Investigation if they receive one.

"Your institution should also prepare a Suspicious Activity Report," according to an OCC advisory. "Under no circumstances should your institution honor one of these instruments or submit it for payment."

Pitcavage and Griffith also described a redemption scheme tactic meant to harass public officials. Both explained that, for example, if a police officer cited a redemption practitioner for a traffic violation, the practitioner would fix a "value" to the document - say $50,000 - accept it for value, then submit an IRS Form 1099 naming the issuing officer as the recipient of a gift. Under normal circumstances, the IRS would see the gift as unreported income when the unsuspecting officer filed his taxes.

Faber has proceded very cautiously in Smith's criminal case. The judge stated openly in court that people have a right to voice opposition to the government, however, he made it clear that Smith "is not entitled to harass and interfere with other people," and added that as a federal judge, he has a responsibility "to protect the public."

Faber ordered Smith to have a mental competency hearing exam locally, and scheduled a hearing on the matter for March 5, in Bluefield.

©Bluefield Daily Telegraph 2001

More news about the redemption process:
December 13, 2001

12 Michigan Residents Are Convicted of Plotting Against Judges


A dozen Michigan residents who tried to instigate audits of 18 judges by filing bogus reports with the Internal Revenue Service were convicted yesterday on 67 counts of fraud, conspiracy and tax evasion.

The case is one of several the Justice Department has pressed against groups that deny the authority of the federal government and advocate the use of financial frauds to disrupt federal and state government activities.

The defendants watched the last half of their 15-day trial on closed-circuit television sets in their jail cells after repeatedly disrupting the proceedings in Grand Rapids, Mich., before Judge Robert Holmes Bell, the chief United States district judge in Western Michigan.

Each day the defendants were in court they shouted four questions that they believe shield them from all government authority on the theory that the Constitution was voided when President Franklin D. Roosevelt ended the gold standard for federal currency in 1933.

Donald A. Davis, the prosecutor, said that the defendants believed that the four questions "created a perfect shield from government authority." Mr. Davis said the questions were: "What is your name? Do you have a claim against me? Does anyone have a claim against me? I demand, or request, that the order of the court be released to me immediately."

Larry Phelan, the lawyer appointed to defend the leader of the group, Joan Anderson, 50, of Evart, Mich., told the jury that the defendants' beliefs were "ridiculous."

Mr. Phelan said Judge Bell "did the right thing" in removing the defendants "because they refused to be civil and act like adults."

But Mr. Phelan and other defense lawyers argued that the defendants should be acquitted because they sincerely believed that the uniform commercial code was the only valid law and thus they could not have formed the criminal intent necessary to defraud the government and evade taxes.

The prosecution introduced audio tapes of some defendants chuckling about using bogus government checks to cheat creditors.

The jury deliberated for just six hours before convicting the 12 of all charges, which could send them to prison for years.

One of those convicted, Rodger Yates, 66, of Jenison, Mich., had been with the Montana Freemen, whose use of bogus documents and refusal to pay taxes preceded the group's 81- day standoff with the Federal Bureau of Investigation in 1996.

As part of the plot, the Michigan group issued $550 million of bogus United States Treasury checks that resembled the real thing so closely that the I.R.S. initially accepted one for $750,000. The group also filed reports with the I.R.S. that the judges had engaged in a total of $490 million in business transactions in hopes that the judges would be audited.

Ms. Anderson, in a letter introduced in court, said the bogus reports were designed to "bring the I.R.S. down on" the judges and she urged others to "strike your enemies where it hurts the most."

Some of the 16 judges who testified said that they were worried that the false reports would never be fully deleted from I.R.S. computers.

Mr. Davis, the prosecutor, said the defendants continued to produce fake documents even as they were in jail during the trial. They even sent the Make-A-Wish Foundation a fraudulent $250,000 pledge in the name of Mr. Davis.

The promoters of this "process" are clearly idiots.

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