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Police warn of bogus sight draft schemes 12-27-04
HAWAII COUNTY POLICE DEPARTMENT
WEST HAWAII CRIMINAL INVESTIGATION SECTION
DETECTIVE NANCY HAITSUKA
PHONE: 326-4646, EXT. 281
DECEMBER 27, 2004
Big Island police are warning residents, particularly businesses and financial institutions, to be on the lookout for bogus sight drafts or bills of exchange drawn on the U.S. Treasury Department.
The phony documents have been appearing in most states and have been used in an attempt to pay for everything from cars to child support, police said.
On the Big Island, a 43-year-old Waimea woman was arrested and charged with theft this month after she allegedly purchased two vehicles from a Kailua-Kona automobile dealership with a fraudulent pre-authorized transfer order (bill of exchange) and other financial documents.
According to the U.S. Treasury Department’s Bureau of the Public Debt, the scheme works on a bizarre theory like this: “When the United States went off the gold standard in 1933, the federal government somehow went bankrupt. Then with the assistance (somehow) of the Federal Reserve Bank, the government converted the bodies of its citizens into capital value, supposedly by trading the birth certificates of U.S. citizens on the open market.
“After following a complicated process of filing UCC documents with either the Secretary of State of the person’s residence or another state that will accept the filings, each citizen is entitled to redeem his or her “value” by filling out a sight draft drawn on their (non-existent) Treasury Direct account.”
Treasury Direct is a system maintained by the Bureau of the Public Debt for holding book-entry Treasury bills, notes and bonds.
“The theorists assert that their social security number is also the number of the Treasury Direct account,” the bureau said.
It also said: “Drawing such sight drafts on the U.S. Treasury is fraudulent and a violation of federal law. The theory behind their use is bogus and incomprehensible. The Justice Department is vigorously prosecuting these crimes. Federal criminal convictions have occurred in several cases….”
With early and vigorous prosecution on bogus sight draft cases, the bureau said it is beginning to see bills of exchange taking their place.
Nevertheless, it said, “All of these bills of exchange drawn on the Treasury or some Treasury account are worthless. All of the same issues and background materials applicable to sight drafts also apply to bills of exchange. This is just the same fraud under another name.”
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