As the real estate market has sunk to new lows in recent years, so have the real estate scams that plague the legal system.
Scam artists are becoming more brazen as lower values, record evictions and a tough job market open the real estate market to all kinds of fraud.
One particularly vexing problem is the increase in activity of so-called “sovereign citizens,” “adverse possession” holders, squatters, gypsies and other scam artists.
Sovereign citizens are the most egregious. They bedevil mortgage lenders by making absurd claims in state and federal courts to undermine legitimate mortgage foreclosure processes. They invade and occupy vacant foreclosed properties without paying the owners. And they use forgeries and bank fraud to avoid legitimate debts and judgments.
Sovereigns subscribe to bizarre theories that the United States compensated for the loss of the gold standard by pledging citizens at birth as collateral for foreign debt.
They think they can use contracts, Uniform Commercial Code (UCC) documents, corporate entities and strange alterations of their names to remove themselves as collateral and become sovereign nations unto themselves, not subject to U.S. law.
They believe this process frees up a secret unlimited treasury account belonging to them, which they can use to pay debts.
Sovereigns file bogus liens and UCC security statements claiming security interests in real estate. They quit-claim real estate solely to cloud title. They frustrate mortgagees by submitting fraudulent ”administrative judgments“ against lenders to offset legitimate mortgages.
They even retaliate against judges and government officials by filing maritime liens against them, reasoning that human bodies are composed of 90 percent water and therefore are subject to admiralty law.
These activities are commonly known as “paper terrorism.” Here are some telltale signs of sovereign citizen activity:
- Strange naming conventions, such as “John: DOE”
- Affidavits using words like “asseveration” or “without recourse”
- Obviously fraudulent checks drawn on the U.S. Treasury
- References to themselves in such terms as “natural man”
- Trademark or copyright symbols affixed to their names
- UCC forms used in real estate transactions
- References to diplomatic immunity
- Bizarre legal documents referencing to Old English law, the Bible, “the natural man” or “the corporate man” and so on
Most sovereigns are peaceful, but some zealots have taken to violence.
Timothy McVay was one. Another one flew a small plane into a Texas IRS building. A father-son team killed two police officers over a minor traffic stop.
Perhaps this, too, is a symptom of economic depression. Nevertheless, be careful and be on the lookout for sovereign scams.