Three Men Convicted of Defrauding Customers Through Bogus Debt Elimination Scheme
|U.S. Attorney’s Office February 07, 2014|
COLUMBIA, SC—Bill Nettles, United States Attorney for the District of South Carolina, announced today that Jerry Elmo Hartsoe, age 57, of West Columbia; James Chappel Dew, age 59, of North Myrtle Beach; and Mark Shannon Manuel, age 49, of Franklin, Tennessee, were found guilty after a jury trial on eight counts of mail fraud. Jerry Hartsoe was also convicted on one count of providing false information to the FBI. Facts presented at trial proved that the three men defrauded victims through their West Columbia business, Eden Gifted Properties. The men claimed to be able to eliminate their customers’ debt using a series of secret government accounts.
According to the testimony presented in the case, Hartsoe, Manuel, and Dew claimed to have access to a secret government account worth approximately $100 billion. For a fee or “donation” of 10 percent of the value of the debt, the men claimed to be able to satisfy and pay off mortgages, credit cards, and any other types of debt. Using connections within various religious and political groups, the defendants traveled across the United States to host seminars and presentations. After identifying potential victims at these seminars and presentations, the defendants would solicit several thousand dollars from each and begin mailing a series of bogus documents to banks and other lenders. According to testimony, the men defrauded hundreds of thousands of dollars from more than 250 victims. Witnesses testified that the men encouraged customers to seek cash advances from credit cards and to raid retirement accounts in order to pay Eden Gifted Properties’ fees. Many of the customers have been subject to foreclosure and have now lost their homes.
Claims made by the men during the trial are similar to arguments presented by so-called sovereign citizens. Sovereign citizens are U.S. citizens who reject their citizenship status and claim that the government is operating outside its jurisdiction. They generally do not recognize the authority of federal, state, or local governments and renounce their obligation to adhere to the laws, policies, or regulations created by those governments.
Sentencing in the case has been scheduled for May 14, 2014, and all three men face possible sentences of 30 years’ imprisonment and fines of $250,000 per defendant.
The investigation and convictions were pursued in furtherance of the FBI’s national strategy aimed at disrupting the criminal activity of individuals claiming to be sovereign citizens and was prosecuted by Assistant United States Attorney T. DeWayne Pearson and John Potterfield of the Columbia office.