Robert Shrout, 68, of Hillsdale, OR, is facing 13 federal counts of making, presenting and dispensing “fictitious financial instruments” in an operation known as “Solutions In Commerce.” He is also facing six count of willfully failing to file income tax returns. These fugazi financial instruments were allegedly sold over the Internet and at seminars in as part of a large-scale tax-avoidance scheme. He faces a maximum of 25 years in prison on each of the fictitious financial instruments charges and one year for each count of willfully failing to file income taxes.
Shrout is accused by the Department of Justice of selling recordings of his seminars, templates for fictitious financial instruments and more through his website. Financial instruments are defined by Business Dictionary as documents, “such as a check, draft, bond, share, bill of exchange, futures or options contract, that has a monetary value or represents a legally enforceable (binding) agreement between two or more parties regarding a right to payment of money.” Shrout slung fake ones in efforts to convince folks that they could use them to pay off debts, including federal income taxes.
The federal indictment alleges that from February 2008 and continuing through at least June 2015, Shrout “devised and participated in a scheme to defraud financial institutions and the United States out of monies by making, presenting and transmitting fictitious financial instruments, which he variously called, among other things, ‘International Bills of Exchange’ and ‘Non-Negotiable Bills of Exchange.’
“Shrout claimed that these fictitious financial instruments had monetary value when he knew they were in fact worthless,” the indictment says.
During the course of his scheme, Shrout produced and issued more than 300 fictitious financial instruments, purported to be worth more than $100 trillion, on his own behalf and for credit to third parties, said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
The SPLC has identified Shrout as one of the 12 most prominent leaders in the Sovereign Citizens Movement. The organization elaborates:
The strange subculture of the sovereign citizens movement, whose adherents hold truly bizarre, complex antigovernment beliefs, has been growing at a fast pace since the late 2000s. Sovereigns believe that they — not judges, juries, law enforcement or elected officials — get to decide which laws to obey and which to ignore, and they don’t think they should have to pay taxes…
The movement is rooted in racism and anti-Semitism, though most sovereigns, many of whom are African American, are unaware of their beliefs’ origins. In the early 1980s, the sovereign citizens movement mostly attracted white supremacists and anti-Semites, mainly because sovereign theories originated in groups that saw Jews as working behind the scenes to manipulate financial institutions and control the government.
More on the Sovereign Citizens Movement can be read here.