COLUMBIA, S.C. — A federal jury in Columbia Wednesday found five defendants guilty of committing various kinds of tax fraud in conspiring to get millions in IRS refunds and actually getting some $2 million before government agents discovered their scheme.
After five days of testimony and hearing from 27 government witnesses, the jury took just 90 minutes to find all five guilty of 36 out of 37 counts of charges related to various kinds of federal tax fraud. They will be sentenced at a later date.
During the trial, two of the five defendants took the witness stand to describe what even their lawyers admitted was a bizarre scheme whereby the defendants asserted their belief that the U.S. government has large stashes of cash accessible by people with secret knowledge of how to file the correct IRS forms.
Guilty were defendants Jefford Henry and his wife Linda Marie Henry, their son Jeffrey Henry, all of Bishopville; their daughter, Makeshia Lashon Glover, of Sumter; and a friend, Bobby McGuire, of Wilson, N.C.
All five are admitted members or affiliates of the Sovereign Citizens, a loose network of independent groups of anti-government citizens who believe that various state and federal laws do not apply to them and who are known for obstructionist legal maneuvers. A small percentage of Sovereign Citizens are considered violent, and the FBI considers those “a domestic terrorist movement,” according to the FBI’s Internet site.
The lead agents on the case, the FBI’s Bill Moser and the IRS’s Perry Stalvey, spent nearly two days on the witness stand, answering prosecution and defense questions to explain Sovereign Citizen philosophy and the evidence to the jury.
“You believe it’s nonsense?” defense attorney Harrison Saunders, who represented Linda Marie Henry, asked Stalvey at one point in the trial.
Stalvey: “It’s illegal. It’s not found in the Constitution.”
An indictment in the case alleged that from 2009 to the present, all five defendants conspired to get millions in illegal tax refunds, and four of the five defendants got most of $2 million in illegal refunds from the IRS, prosecutors alleged. McGuire, the fifth defendant, got $36,000 and had filed for a $990,000 refund that didn’t go through, according to the government’s case. Most of the money went for houses and cars, the government charged.
It is easy to claim and get large refunds from the IRS if taxpayers send in electronic tax forms claiming a refund, according to testimony. That’s how the Henrys got two $990,000 checks from the IRS in recent years. However, the IRS does vet returns filed by paper more carefully, and that’s how the IRS foiled an attempt by McGuire to claim a refund of about $990,000, according to evidence in the trial.
In a closing argument Wednesday, assistant U.S. attorney Jim May told the jury, “The IRS is arguably the least-liked agency in our government.”
But the IRS is just a collection agency for all Americans, May said. “The victims in this case are everybody who is a taxpayer – the victims are the Marines, who protect our safety, the elderly, who are on Medicare and the poor, who are on Medicaid.”
Defense lawyers told the jury that their Sovereign Citizens clients actually believe the federal government has a huge secret account that citizens can draw cash from by means of filing an IRS tax form. Those beliefs may seem far-fetched, but if the defendants are sincere, they lack the intent needed to show someone has committed a crime, defense lawyers argued.
“As crazy as it seems, he believes these secret accounts exist!” Saunders told the jury, describing Jefford Henry. Undisputed evidence indicated Jefford Henry orchestrated the scheme and persuaded his wife, co-defendant Linda Marie Henry, to join with him in filing false tax returns.
“This misunderstanding of the law was dictated by the Sovereign Citizen ideology, and because of this, we ask you to find her (Linda Marie Henry) not guilty,” said Saunders, who represented Linda Marie Henry.
Another defense attorney, Jason Peavy, who represented Jeffrey Henry, told the jury his client didn’t act like a guilty man and that prosecutors had failed to prove their case.
“It’s not an open and shut case that the government would have us believe,” Peavy said. His client, Jeffrey Henry, had a job driving a bakery truck and “was putting roots down in the community. . It’s not the conduct of a person who thought they did something wrong.”
But May, whose voice at times seethed with indignation, told the jury to forget Sovereign Citizen ideology because the case is only “about lying, cheating and stealing that all five of the defendants did. This is a case of fraud,” May said.
“Each and every one of these defendants took actions out of greed. Each and every one took actions to steal from taxpayers. … We all live with the consequences of our actions.”
McGuire testified he met Jefford and Linda Henry at various Sovereign Citizens seminars along the East Coast, where they were taught how to file tax refund requests to the IRS to access the government’s secret accounts.
Besides McGuire, Jefford Henry was the only defendant to testify. Henry said he and his family filed tax forms requesting millions from the IRS because his house was originally in danger of being foreclosed on.
McGuire, who appeared to be in his 40s, told the jury he didn’t expect to live long and filed for a $990,000 tax refund because he wanted to leave some money to his children.
“I have cancer,” testified McGuire, who was not asked for medical documentation to verify his condition.
The defendants face 10 or more years in prison each.
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