Penalties Of Perjury Catch 22

Register of Deeds O'Brien Rejects Fraudulent Foreclosure Documents

Shahien Nasiripour’s latest on the foreclosure fraud settlement asserts that mortgage servicers expect to pay up to $20 billion to settle legal claims from state and federal regulators. They apparently have gotten the message that the fraud allegations are serious enough to rise to this standard. But the talks have not ironed out how much liability the banks would receive in exchange for this penalty, as well as where that $20 billion will go (loan modifications or simply penalties back to the US Treasury) and what the enforcement mechanism would be in the wake of an agreement.

I’ve lost sight of why we’re still having this conversation. Multiple state Attorneys General have essentially abandoned these negotiations by either denying the existence of a problem (on the right) or undertaking their own mortgage fraud investigations and subpoenas of documents (like the AGs of New York, Illinois, California and several other states). I understand why the banks want a quick solution now: the housing market shows no sign of coming back, and each individual revelation has provided a hit to their bottom line. Stock prices of US banks are particularly low at this point. But I don’t see why the regulators should be in such a hurry to indemnify them, and indeed it doesn’t look like they are.

This is especially true given the evidence obtained by reporter Abigail Field, showing securitization fraud much more widespread that the industry admits. Only now are we beginning to get the investigations showing the extent of the problems, between Field’s findings, the subpoenas and spade work from state AGs, the HUD Inspector General report showing that the banks filed false claims to recoup government-funded insurance on FHA loans, and the recent discoveries from county registers of deeds. One register, Jeff Thigpen of Guilford County, North Carolina, looked through the records in his office and found thousands of instances of fraudulent documents and forged signatures. Another register, John O’Brien of the Southern Essex District in Massachusetts, has decided to reject all robo-signed records coming into his office, forcing the entities wishing to foreclosure under his jurisdiction to file separate forms. Thigpen has backed up O’Brien on this announcement. Here’s the press release .

Saying “the buck stops here” Massachusetts Southern Essex District Register of Deeds, John O’Brien, today rejected 2 robo-signed documents submitted to his Registry for recording and plans to continue doing so. “My Registry will not be a knowing participant in this fraud against homeowners. From today forward, lenders be on notice, the Southern Essex District Registry of Deeds will not record robo-signed documents.

Under Penalties of Perjury - A Catch 22 Situation

Regulations under the IRC accurately describe the system as one of voluntary self-assessment and self-collection. For the moment, forget the term "voluntary." Think about who has the delegated authority to make assessments and collections.

The IRC clearly specifies who may assess and collect taxes under this Title: The Secretary of the Treasury or his delegate . You can find that expressed in the sections addressing assessment authority and collection authority.

In the initial sense, only Congress has the power to lay and collect tax. However, that is a legislative power, which must be executed by executive personnel. Just as Congress has the power to coin money, but the actual activity is carried out in the Mint, by Federal personnel, so too must any tax be physically assessed and collected by Federal personnel.

In that same vein, you'd find it rather laughable if an Official from the Mint were to send you a letter which somehow inferred that you had the power to "self-coin money." You'd balk at that, quickly realizing that any attempt on your part to self-coin money would most assuredly be considered an act of counterfeiting. Why? Because you know that there is no way for Congress, even via an executive officer, to abdicate a Federal power and duty back to the people.

The same logic follows with a tax, any tax. The people may only pay a tax. They have no power, no duty, no authority whatsoever, to assess and collect a tax.

A self-assessed or self-collected tax is still a tax assessed and collected. The person performing those actions, even if only against and from himself, MUST have the delegation of power to perform those actions. To perform those actions, absent a delegation of this Federal power, would be an act of "impersonating a Federal officer or employee." That's a crime, same as it would be the crime of counterfeiting, should you coin money absent that delegation of Federal power.

In order to self-assess and self-collect income tax, you MUST be a Federal officer or employee. Thus, there are two commonalities at every trial under IRC 7203. A prior income tax return (or other form under the IRC) will be introduced into evidence, executed and signed by the defendant.

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