Thursday, July 20, 2006

More Updates on the Anthony L. Hargis Case

Disaster be my life
The week so far...

By Phil Osborn
Posted Thursday, March 16, 2006 on Skinny-Dipping the Deep End of the Memes
Discussion: US Domestic
Update: April 23rd... Wow! Has it been that long? No, I didn't break my foot, altho it hurt like it for a while. As to the ongoing ALH&Co. case, I filed my motion in response to the Receiver's motion to make me and a lot of other people "partners" in ALH&Co. after the fact. I realize that the Receiver was simply trying to satisfy the IRS, and the IRS filed their own motion, in fact, in essence assuring the Receiver and the Judge that if we were all declared "partners," then the IRS would hardly have grounds to object, in as much as it was they who suggested the idea.

This is yet another indication of the general moral breakdown of the nation, especially the judicial system. It is no longer a case of "You broke the law. Therefore, you pay the penalty." Just as, for decades, movie cops who slyly break and enter in order to get the goods on the "bad" guy are portrayed as heroes, willing to risk their career, presumably, to protect us when the kid's gloved methods prescribed by our namby-pamby laws would stop them cold, so also the legal system itself has now become essentially a venue for corruption and privilege, in which it is fine for the authorities to break the law wholesale, so long as they carefully preserve a trail of "independent" evidence.

Of course, once they are tapping your phone, peek and sneaking your home, computer, email host and business, coercing your friends with intimidations and arrests, then it becomes a lot simpler to extract out of the mass of illegally obtained information, a set of data which a plausible trail of legally methods might have actually produced. Not that they likely ever did follow the law, but just the fact that they "could have" conceivably been at the right place and time two dozen times in a row makes the actual illegality moot.

Anyway, in spite of having basically given a rubber stamp to the IRS's early claims and actions vs. ALH&Co., despite their not producing any evidence to support their ridiculous claims, and in the face of the claims of the people who could show evidence that they had money on deposit with ALH&Co., this time the Judge decided simply not to rule on the matter. So the hearing never happened, and I haven't heard anything since, although I suspect that's not the end of it.

It leaves the Receiver hanging, without a clear path regarding the various tax liabilities from the liquidation of the properties. Will they proceed under the partnership concept, potentially leaving all the ALH&Co. customers to figure out what to do with tax assessments and penalties that might bankrupt them? Stay tuned....

March 16, 2006: About two hours ago, I may have broken my foot. More likely it's just a major bruise that will keep me hobbling around for the next several weeks. This is up to par for the week.

Sunday evening I finally got to look at some paperwork that I originally thought was junk mail. But no, this was only made to look like junk mail - no envelope, poor Xerox, tiny print, stapled on one corner and folded so that anyone could read it.


The receiver, Robert P. Mosier, was appointed by the court to dispose of the assets representing Anthony's life work and the savings of some alleged 1190 customers, plus God knows how many shareholders and others with credible claims. As I have covered in detail elsewhere, this case represents what the Feds are REALLY doing with the Patriot Act and similar "anti-terrorist" legislation. I don't think that anyone has yet accused ALH&Co. of being a terrorist organization or funding any such thing.

Briefly, so to speak, (an in-joke for the IRS shysters reading this) ALH&Co. was a shareholding trust, which Anthony established in the late '70's for the stated purpose of, on the one hand, offering people a way of preserving capital against inflation, via putting money into accounts with ALH&Co., and, on the other, of using the funds so provided by depositors and/or shareholders to invest in businesses that had something to do with promoting the non-corporate free market and presumably to make profits for the shareholders.

The shareholding trust is a long-established form of business, popular before the litigious lawyers made owning a business of any kind a hazardous undertaking, thus forcing most businesses of any size into the corporate mold. Such a trust typically limits liability to the Trustees, by forbidding any control of the company to the shareholders. The Trustees being solely in charge, they also bear all the liability in case of some huge punitive award against the company.

Here is a small sampling of sites related to the shareholding trust form of organization: the Football Governance and Research Centre
Ross Holmes business consulting firm
the Washington State Legislature Legal Site
Or, just to illustrate the absurdity of trying to say that there is no such recognized legal entity in California as a "shareholding trust," here is a statement from the CalPERS site - the HUGE (perhaps the largest single business entity in the State of California, in fact) public employee retirement trust for the state employees of California:

The CalPERS fund is a trust, administered under the Board's sole authority. Although CalPERS is exempt from the federal oversight of private pension funds, it turns to these standards and the "common law" of trusts for guidance. (emphasis added)

Could it be clearer than that?

Of course, from my own anarchist standpoint, it might be legally useful to have a Federal Court declare that shareholding trusts were not legal, as that would put CalPERS out of business. Then the IRS could have literally tens of $Billions of potentially collectible penalties to asses on them as well. Hmm. Perhaps NOT such a great idea, after all...

In the 19th century, shareholding trusts were a fairly common form of business structure, isolating the shareholders from liability by insulating the Board of Trustees from shareholder control. Note the CalPERS statement above - "the Board's sole authority."

As the courts moved away from the common law, however, which is strictly a law of equity - of returning things to their proper place, and moved more and more into the business of enforcing state "positive" law, including civil punitive damages to enforce social norms or simple jury prejudice against a defendant, even the Trust form of business became risky, compared to having the joint protections of "limited liability" and immunity from suits already covered by bureaucratic oversight which are granted to a corporation by state fiat.

For over 25 years, ALH&Co. operated its gold depository, which was roughly the equivalent of a typical 19th century-era private bank, and various investments and businesses without particular fuss. Occasionally the IRS would come to visit and ask Anthony questions - or so he reported in casual conversation. However, that was typically the end of the matter. When Anthony, who virtually lived in the Orange County Law Library, did have to go into court, he usually exited a winner.

One notable occasion, however, should have given everyone pause. Around 1993, the feds invaded ALH&Co. bigtime, the machine guns, flak jackets, the whole deal. Of course the door was open, and they could simply have walked in, where people were peacefully conducting business transactions and bookkeeping. The cause of action was allegedly that ALH&Co. was engaged in money laundering and must be in some way connected with drug dealing.

The evidence for this was reportedly that a customer of ALH&Co. in Florida (ALH&Co. was in the OC) had been pulled over under suspicious circumstances and discovered by the officer to be in possession of many thousands of dollars, cash. Having a large amount of cash ($400 is the rule-of-thumb limit) on one's person, in case you don't realize it, is automatic proof that you must be a drug dealer. For real. The policy by the feds - and a lot of local authorities cashing in - is to seize the money, claim a prima facie case for drug dealing, and then try to pile-on other charges - on the flimsiest of suspicions or out of thin air if necessary - in order to force the victim to give up on getting the cash back.

In this case, they reportedly found a receipt from ALH&Co. for the amount of the cash, which had apparently been mailed to the woman from ALH&Co. So, ALH&Co. must be a drug dealer! Makes sense. If the woman is a drug dealer, even though no drugs were found and she had no record or any other prior association with drug dealing, then, by that standard of "proof," ALH&Co. must be involved to the hilt.

In reality, as was later proven in court, the woman had just had a huge personal crisis involving a boyfriend and a pregnancy, and so she was fleeing that situation to someplace safe and needed the cash to disappear. And, after a year or so, the feds returned everything to ALH&Co., without any apology. Of course, they had had a year to investigate the personal records of his customers on the computers they seized, many of whom were "Patriot" types who valued their privacy.

Fast forward to 2004, when the feds again went after Anthony, this time on the basis of that new extension of the Patriot Act that had been passed in early '04 (or so is my understanding). This extension allows the feds from various agencies to demand all your customer records from whatever business you have without a warrant or court order or any alleged crime. This is to keep us safe. From terrorists.

So, they put Anthony in prison for 6 months, because he refused to turn over the names, etc., of his customers - to protect us all, of course. Meanwhile, the IRS, based on its own unproven allegations of tax evasion, went around tracking down every bank that ALH&Co. used and either seizing or freezing the accounts, all without a warrant, naturally, as the IRS is basically a law unto itself.

The IRS then told the judge involved in the case that ALH&Co. was actually a "warehouse bank," set up for and pursuing the purpose of hiding people's assets and dealings for the underlying purpose of promoting tax evasion. For all I know, this may have been true for some of Anthony's customers. One of the drawing cards for attracting customers from the Patriots was doubtless Anthony's advocacy of the legal position that both the IRS and the Federal Reserve System were frauds, and illegal to boot.

However, I was one of Anthony's early customers, and I well recall how painstakingly he went out of his way to discourage customers, shareholders, and potential trust creators (Anthony at one time offered for sale a legal package for how to create a shareholding trust) from thinking that they could use any or all of the above to evade taxes. His point to them was that this was a separate issue to be decided politically and in the courts. His business was providing people the option to keep savings denominated in gold, for the purpose of capital preservation, and to possibly have the opportunity to invest in businesses that were consistent with their moral principles.

Too bad. Last I heard, Anthony is now penniless and has a claim against him by the IRS of some $30 million or so. His total assets, at the time that the Feds seized everything, were possibly worth an estimated $7 million. The seizures resulted in the loss of a good portion of those assets, apparently, as various businesses shut down, etc., leaving perhaps $2 million, it appears, from the final liquidation by the Receiver.

I owned no shares in ALH&CO. and never did own any. I did have a nice nest egg of a gold account, which, at the time of the seizure, was worth about $7k, and would be worth today considerably more, based on gold prices. That savings represented years of work on my part, now down the drain.

Of the 1190 alleged customers that the Receiver identified, many of them were elderly, retired, and had a sizeable portion of their life savings in those accounts (from what Anthony's employees said in passing). One customer of ALH&Co., Bruce, who was a personal friend, although not really close, ran a small printing business, specializing in high quality prints, that had apparently taken out a loan from ALH&Co. and then paid it back. On that basis, as far as I can tell, Bruce was alleged to be some kind of co-conspirator with Anthony's evil criminal empire, and, I was just told this past weekend, hit in 2004 with a $million in penalties, somehow. The entire assets of the business, which was just barely scraping along like so many small traditional print shops in the digital age, were at most in the low tens of $thousands, I'm sure, and that's probably an overestimate, as most of their equipment is decades old and has been nursed along, relying upon the skill of the aging operators to make up the difference.

Bruce never mentioned his personal problem of the $million dollar assessment against him, in his discussions with me, but it clearly took its toll. Bruce had dedicated his spare time for many years in studying the law and trying to find possible solutions for our dysfunctional legal system - for example using the UCC (Uniform Commercial Code) as a contract-based extension of the common law. I looked forward one day to having discussions with him of those issues, as they appeared to dovetail with my own research on the possibility of a universal social contract. However, Bruce died of heart failure, probably in his late 40's, just recently, as I found out this weekend from a mutual friend. Thus, his study and work and the possible results that he might eventually have produced are now lost to all of us. To demonstrate just how thorough, meticulous, careful, and generally on-the-ball the feds actually are, they reportedly showed up at the print shop, again with their whole SWAT team goon squad, and tried to insist that one of the two remaining workers (I think that there were only three, including Bruce), who was apparently trying to carry on with business until all the legal stuff was settled, was in fact Bruce. They insisted that he was lying like a dog in telling them that Bruce was dead. I suppose that it is nice to think that someone actually cares whether you live or die, but I'd prefer that it not be IRS goons, pedophiles or necrophiliacs, personally, not in any particular order of precedence.

So, here comes this NOTICE OF RECEIVER'S PETITION, looking like a junk mailing, and I finally open it up on Sunday and discover that - Oh my God! - I am being named as a partner in the business of ALH&Co. It seems that there is no legal language that the Receiver or his attorney could find that describes a shareholding trust. This is probably because such a trust is a purely private contract. It has no special legal status, unlike a corporation. There are no permissions involved, no waiving of liability by state fiat, and no penalties of the kind that accrue from the pacts with the devils that corporations have to make.

The Receiver is now apparently asking the Judge - the HON. DAVID O. CARTER, PRESIDING JUDGE OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA - to go along with the IRS's catchall for businesses that do not fit one of their pigeonholes - a partnership. This "partnership" would consist of all the holders of accounts at ALH&Co., thus opening the door potentially of going after all the assets of the 1190 people, some of whom, admitted by the Receiver, had only a few bucks in an account, or had no evidence of doing anything at all with an original deposit from many years prior.

Then I discovered that the Receiver had sent the package to the wrong address, which, in addition to the delay caused by my misidentifying it, had pushed me right up to the deadline for filing an objection or counter-motion, that deadline being Monday.

So, perhaps I could file for an extension of time, under the circumstances. The length of the brief alone - over twenty pages reduced on a poor Xerox machine to about 6 point type - would probably justify more time allowed for a response from the affected parties. However, as I discovered on Monday, calling about frantically during lunch and break and then leaving work early to try to deal with this, first you have to have extensive knowledge of the proper way to produce the documents you are going to file.

This involves such items as "blue-backing," which apparently is where you put a sheet of blue paper on the back side of each page of your motions and attach a label to it for filing purposes. It all has to be done just so, and I could not find any explanation of exactly the dimensions of the oversized blue paper anywhere. Every web site, including the court's - many courts, in fact - all assume that you know what blue-backing is. Nobody that I could locate has an explanation.

I did find what appears to be the proper Motion in one of the Federal Court Motions books, and, after finding out that there was NO WAY to even get my request for extension in on time, I went ahead and generated the form, had it checked by a paralegal friend, and then submitted it by mail.

My intention, then, is complete the process of objecting to being willy-nilly transformed into a "partner" in a business over which I had no control, and no return on investment. I've been told by several people since then, who are in the same boat, that we can all file an appeal, regardless of the Judge's decision. I recall, however, that appeals have to generally be based on something in the original case and the way it was dealt with, and the timely raising of objections. So, I will try to cover that base, even if my extension is turned down. The fact that it was denied, under the circumstances, as well as my attempt to follow through regardless, may tip the scales on appeal.

Or, perhaps my arguments will actually be heard....

Suggestions - of a positive kind???

Oh, and so, I was in a daze by this afternoon, having been up all hours working on this and then going to work where I manage a 1500 page corporate website and also do the desktop publishing, which includes the yearly catalog just now. So, I got blindsided by someone going just a tad too fast up an alley in front of my motorcycle, crossing in my path, slammed on the brakes, and then discovered the gravel on top of the pavement... Not fun. The bike is ok, as it appears to be a piece of junk anyway - which is my theft-deterrent. I have a couple bumps and scrapes, and possibly a broken foot. Something is hurting anyway. However, on the bright side, now I'm wide awake.

Bring it on.


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