Member of Anti-Government Movement Pleads Guilty to Laundering Money for FBI Undercover Agents

LAS VEGAS—A man who is a member of an anti-government movement known as the “Sovereign Movement” pleaded guilty today to conspiracy and money laundering charges for laundering approximately $1.3 million, which he had been told were proceeds of a bank fraud scheme, announced Daniel G. Bogden, United States Attorney for the District of Nevada.

Samuel Davis, 56, of Council, Idaho, pleaded guilty as originally charged, to one count of conspiracy to commit money laundering and 30 counts of money laundering. Trial was scheduled to begin in his case on Monday. Davis is now scheduled to be sentenced by U.S. District Judge James C. Mahan on June 24, 2011, at 10:00 a.m. Davis faces up to 20 years in prison and a fine of $250,000 on each count.

According to a guilty plea memorandum filed today, from about March 2008 to March 2009, Davis and co-defendant, Shawn Rice, 48, of Seligman, Arizona, allegedly laundered approximately $1.3 million of monies for FBI undercover agents. Davis and Rice were told by the undercover agents that the monies were proceeds of a bank fraud scheme, specifically from the theft and forgery of stolen official bank checks. Davis and Rice laundered the monies through a nominee trust account controlled by Davis and through an account of a purported religious organization controlled by Rice. Davis and Rice took approximately $74,000 and $22,000, respectively, in fees for their money laundering services. Co-defendant Rice is currently a fugitive.

Unsealed search warrant affidavits filed at the beginning of the case stated that Davis and Rice are heavily involved in the Sovereign Movement, an extreme anti-government organization whose members attempt to disrupt and overthrow government and other forms of authority by using “paper terrorism” tactics, intimidation and harassment, and violence. Members believe they do not have to pay taxes and believe the federal government deceived Americans into obtaining Social Security cards, driver’s licenses, car registrations, and wedding licenses, etc., and that if these contracts are revoked; persons are “sovereign citizens.” Members of the Sovereign Movement also believe that U.S. currency is invalid. They widely use fictitious financial instruments such as fraudulent money orders, personal checks, and sight drafts, and participate in “redemption” schemes where the fictitious financial instruments are used to pay creditors. The affidavits state that Davis is a national leader of the movement, traveling nationwide to teach different theories and ideologies of the movement. Rice allegedly claims that he is a lawyer and Rabbi, and uses his law school education and businesses to promote his sovereign ideas and to gain credibility in the community.

The cases are being investigated by the FBI-led Nevada Joint Terrorism Task Force, which also includes ATF, Henderson Police Department, IRS Criminal Investigation, Las Vegas Metropolitan Police Department, Nevada Department of Public Safety, North Las Vegas Police Department, and other federal, state and local law enforcement agencies in Nevada; Council, Idaho; and Flagstaff and Seligman, Arizona.

The cases are being prosecuted by Assistant U.S. Attorneys J. Gregory Damm and Nicholas D. Dickinson.