seth sundberg 1099 oid indictment, complaint, motion to dismiss

Case5:09-cr-00928-JF Document8 Filed09/23/09 Page1 of 7No.-CR-09 00928 JFp\JT

UNITED STATES DISTRICT COVltlD

NORTHERN DISTRICT OF CALIF~~Al3 A II: 25

SAN JOSE DIVISION ',ICHIIRO w. WIEKING , CLERK lJ 5. DiSTRlfT COURl fio. DlSl O~ CA. S..!.

THE UNITED STATES OF AMERICA VS.

SETH SUNDBERGE-tiHn9

INDICTMENT

COUNT ONE: 18 U.S.C. § 1341 - Mail Fraud

COUNT TWO: 26 U.S.C. § 7206(1) - Fraud and False Statement in Tax Return

COUNT THREE: 18 U.S.C. § 287 - False and Fraudulent Claims

A true hill.

Foreperson

Filed in open court this ---""----1'---

A.D. 2009

UNITE TEJUDGE

Case5:09-cr-00928-JF Document8 Filed09/23/09 Page2 of 7

1

2

3

4

5

6

7

8

9

10

JOSEPH P. RUSSONIELLO (CSBN ~'a\jJ)E 0 United States Attorney ,

\ 'lL .. non St.? '2."3 A \' . .) .t";IJ.~

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

ORIGINAL

E-filing

11 UNITED STATES OF AMERICA, ell -69 00928 12 Plaintiff,

13 v.

14 SETH SUNDBERG,

15 Defendant.

) ) )

~ )

------------------------) 16

VIOLATIONS: 18 U.S.C. § 1341-Mail Fraud; 26 U.S.C. § 7206(1) - False Statement on Tax Return; 18 U.S.C. § 287-False Claim Against the United States

SAN JOSE VENUE

C-J 17 INDICTMENT

18 The Grand Jury charges:

19 The Scheme and Artifice to Defraud

20 At all times relevant to this Indictment:

21

22

1.

2

Defendant Seth Sundberg ("Sundberg") resided in San Carlos, California.

On or about April 14, 2009, Sundberg signed under the penalties of perjury and

23 filed a Form 1040 Individual Income Tax Return for the 2008 tax year with the United States

24 Department of Treasury, Internal Revenue Service ("IRS").

25 3. On that 2008 income tax return, Sundberg made the following false statements,

26 among others:

27 a. in Schedule B (Interest and Ordinary Dividends), Sundberg claimed to have

28 received $5,732,580 in taxable "original issue discount" ("OlD") interest income;

F PVT


1 b. also in Schedule B, Sundberg claimed to have paid $5,732,441 in tax as a

2 result of that purported OID income;

3 c. in box 71 of the Form 1040, Sundberg claimed to have made total tax

4 payments to the IRS of $5,087,059;

5 d. in box 73a of the Form 1040, Sundberg claimed that he was owed a refund

6 from the IRS of $5,084,010.

7 4. As a result of the false statements and claims he made in his 2008 tax return, on or

8 about May 29, 2009 the IRS mailed Sundberg a refund check in the amount of $5,083,609.25.

9 COUNT ONE: (18 U.S.C. § 1341 - Mail Fraud)

10 5. Paragraphs 1 through 4 are realleged and incorporated as if fully set forth here.

11 6. On or about May 29, 2009, in the Northern District of California, and elsewhere,

12 the defendant,

13 SETH SUNDBERG,

14 having devised and intended to devise a scheme and artifice (A) to defraud as to a material

15 matter, and (B) to obtain money by means of materially false and fraudulent pretenses,

16 representations, and promises, for the purpose of executing such scheme and artifice and

17 attempting so to do, did knowingly cause to be delivered by United States mail a federal income

18 tax refund check;

19 All in violation of Title 18, United States Code, Section 1341.

20 COUNT TWO: (26 U.S.C. § 7206(1) - Fraud and False Statement in Tax Return)

21 7. Paragraphs 1 through 4 are realleged and incorporated as if fully set forth here.

22 8. On or about April 14, 2009, in the Northern District of California, the defendant,

23 SETH SUNDBERG,

24 did willfully make and subscribe a U.S. Individual Income Tax Return which he verified by a

25 written declaration that it was made under the penalties of perjury, and which he did not believe

26 to be true and correct as to every material matter, in violation of Title 26, United States Code,

27 Section 7206(1).

28 II

2


1 COUNT THREE: (18 U.S.C. § 287 - False or Fraudulent Claims)

2

3

9.

10.

Paragraphs 1 through 4 are realleged and incorporated as if fully set forth here.

On or about April 14, 2009, in the Northern District of California, the defendant,

4 SETH SUNDBERG,

5 did make and present a claim upon and against the United States and a department and agency

6 thereof, knowing at the time he made the claim that it was false, fictitious, and fraudulent, in

7 violation of Title 18, United States Code, Section 287.

8

9

10

FORFEITURE ALLEGATION: (18 U.S.C. § 98I(a)(I)(D)(v) and 28 U.S.c. § 246I(c)Forfeiture of Proceeds of Mail Fraud)

11. The factual allegations contained in Count 1 of this Indictment are re-alleged and

11 by this reference fully incorporated here for the purpose of alleging forfeiture pursuant to the

12 provisions of 18 U.S.C. § 981 (a)(1)(D)(v) and 28 U.S.C. 2461 (c).

13 12. Upon a conviction of the offense alleged in Count 1, the defendant,

14 SETH SUNDBERG,

15 shall forfeit to the United States all property, constituting and derived from proceeds traceable to

16 said offense, including but not limited to the following property:

17 (a) Money Judgment: a sum of money equal to $5,083,609, representing the

18 gross proceeds obtained as a result of the offense.

19

20

21

22

23

24

25

26 13.

27

28

(b) Cash, Currency, and Monetary Instruments:

I.

2.

3.

$322,000 in cashier's checks recovered from Seth Sundberg on

September 9, 2009.

$117,473 in cash recovered from Seth Sundberg on September 9,

2009.

$75,729 in gold and silver coins recovered from Seth Sundberg on

September 9,2009.

If any of said property, as a result of any act or omission of the defendant-

(a)

(b)

cannot be located upon the exercise of due diligence;

has been transferred or sold to or deposited with, a third person;

3


1

2

(c)

(d)

has been placed beyond the jurisdiction of the Court;

has been substantially diminished in value; or

3 ( e) has been commingled with other property which cannot be subdivided without difficulty;

4 any and all interest defendant has in other property shall be vested in the United States and

5 forfeited to the United States pursuant to Title 21, United States Code, Section 853(P), as

6 incorporated by Title 28, United States Code, Section 2461(c) and Rule 32.2 of the Federal Rules

7 of Criminal Procedure.

8 DATED:

9

10

11

12 JOSEPH P. RUSSONIELLO

13 United States Attorney

16

17 (Approved as to form: T*ihIi''<nc.."..,...,..,,-'

18 A

19

20

21

22

23

24

25

26

27

28

~ TRUE BILL

d\Y'I/\--~J-f~ FOREPERSON

4

Case5:09-cr-00928-JF Document8 Filed09/23/09 Page6 of 7AO 257 (R""ev,,-. ",617,,8>1-) ___ _

[ __ DEFE~_~!-NT IN-FO~MATION RELATIVE TO A CRIMINAL ACTION - IN U.S. DISTRICT COURT ~ BY: 0 COMPLA!I:!U\O'ii~MATION IZI INDICTMENT ,'- Name of District Court, and/or Judge/Magi.trate Location --J \ \ 0 S IN ~. QNORTHERN DISTRICT OF CALIFORNIA

,; SUPER ED G : ~' .. --- OFFENSE CHARGElJ.. -\\, 2--, 1...<' z-'---- .------~

18 U.S.c. § J~ 'S~il2F1aud;Z6 U.S.c. § D ~,: f" DEFENDANT· U.S. 7206(1) - FiIl~~Statement on Tax R~twn; 18 Petty U.S.C. § 287 -False R~*g:&\Qt'lli.e United 0 Minor • . ---------------States \1,\Cl-lf' CLl:.l',\\ COIlRI 0 Misde- SETH SUNDBERG Si?ICI S J meanor I ==--------------

Il S. III -r Of Ci\· . . r7I Felony I DISTRICT COURT NUMBER lio- \jIS 1- U!...!

. PENALTY:

See Attachment CR .. 09 00928 JF P l_ ------ .. _--- -=:::-:-=--====: (----------.-- PROCEEDING

i Name of Complaintant Agency. or Person (&Title. if any) ! Internal Revenue Service

D person is awaiting trial in another Federal or State Court, give name of court

I this person/proceeding is transferred from another

D district per (circle one) FRCrP 20. 21 or 40. Show I District

this is a reprosecution of

D charges-previously dismissed which were dismissed on SHOW

I motion of: o U.S. Att'y 0 Defense

'1 tljis' prosecution relates to a

I

0 pending case involving this same defendant

} DOCKET NO.

prior proceedings or appearance(s) : IZI before U.S. Magistrate regarding •

this defendant were recorded under I '-----------

Name and Office of Person

MAGISTRATE CASE NO.

09-70796-RS

Furnishing Information on JOSEPH P. RUSSONIELLO THIS FORM

IZI U_S_ Att'y D Other U.S_ Agency

Name of Ass!, U.S. Att'y (if assigned) JEFFREY B. SCHENK

~--------- DEFENDANT -------~

IS NOT IN CUSTODY Has not been arrested, pending outcome this proceeding.

1) D If not detained give date any prior summons'-was served on above charges .,

----I

2) 0 Is a Fugitive

3) 0 Is on Bailor Release from (show District)

----------_._-----_._-

IS IN CUSTODY

4) IZI On this charge

5) 0 On another conviction 6) D Awalllng mal on omer

,.h~rnp.~ } 0 Fed'i 0 State

If answer to (6) is "Yes", show name of institution

Has detainer been filed?

DYes

o No } If "Yes" give date filed

DATE OF ARREST • Month/DayNear

Or ... if Arresting Agency & Warrant were not

DATE TRANSFERRED. TO U.S. CUSTODY

Month/DayNear

----===---=-.. =---=--= ... -o This report amends AD 257 previously submitted

------- ---- .. ------. ----ADDITIONAL INFORMATION OR COMMENTS -------------PROCESS:

o SUMMONS IZI NO PROCESS'

If Summons, complete following: o Arraignment D Initial Appearance

Defendant Address:

D WARRANT Bail Amount:

*Where defendant previously apprehended on complaint, no new summons or warrant needed, since Magistrate has scheduled arraignment

Daterrime: -----------Before Judge: -----------


18 U.S.C. § 1341 - Mail Fraud 10 years imprisonment

United States v. Seth Sundberg Maximum Penalties

3 years Supervised Release $250,000 fine $100 Special Assessment Fee

26 U.S.C. § 7206(1) - False Statement on Tax Return 3 years imprisonment . 1 year Supervised Release $100,000 fine (plus costs of prosecution) $100 Special Assessment Fee

18 U.S.C. § 287 - False Claim Against the United States 5 years imprisonment 3 years Supervised Release $250,000 fine (or twice the value ofthe gross gain or loss) $100 Special Assessment

Case5:09-mj-70796-RS Document1 Filed09/01/09 Page1 of 27

United States of America v.

SETH SUNDBERG, alk/a Franco Metcalf

Defendant

for the

CRIMINAL COMPLAINT

I, the complainant in this case, state that the following is true to the best of my knowledge and belief.

On or about the date of 0411412009 in the county of __ S_an_M-ea",tecco __ in the _-,N.:..0:..crtc..hc..:e.:..rn-,-_ District of

California ,the defendant violated 26 U. S. C. § 7206(1) and 18 U.S.C. 287 , an offense described as follows: Count One: that the defendant did knowingly and willfully make and subscribe a Form 1040 federal income tax return, which was verified by a written declaration stating that it was made under penalty of perjury, knowing full well that the said tax return contained a false statement as to a material matter, to wit, that $5,087,059 in 1099-01D income had been withheld by various payers; Count Two: that the defendant did knowinlgy make a false, fictitious, and fraudulent claim against the United States Internal Revenue Service, to wit: a claim made on a Form 1040 federal income tax return for a refund of $5,084,010.

REQUESTED PROCESS: Arrest warrant

REQUESTED BAIL: No bail (government will request detention)

This criminal complaint is based on these facts:

PENALTIES: 18 U.S.C. 287: 5 years prison, 3 year TSR, $250,000 fine (or twice value of the gross gain or loss), $100 SAF; 26 U.S.C. 7206(1): 3 years imprisonment, 1 year TSR; $100,000 fine (plus costs of prosecution), $100 SAF.

See attached affidavit of SIA Quyen Madrigal for facts underlying this complaint.

16 Continued on the attached sheet.

Printed name and title

Sworn to before me and signed in my presence.

rl Date: 't /1 /O~ City and state: SAN JOSE, CA RICHARD SEEBORG, U.S. Magistrate Judge

Printed name and ti &OCUKriENT NO.

1t eSA's lNlTIA


AFFIDAVIT IN SUPPORT OF

APPLICATION FOR SEARCH WARRANT

I, Quyen Madrigal, Special Agent with the Internal Revenue Service, Criminal

Investigation, being duly sworn, do hereby state the following:

INTRODUCTION

I make this affidavit in support of an application for an arrest and search warrant. The

arrest warrant is for:

SETH SUNDBERG (SUNDBERG), born July 8, 1975 who resides at 26 King Court, San

Mateo, California. The facts set forth in this affidavit establish that there is probable

cause to believe that SUNDBERG is guilty of filing a false tax return and submitting a

false claim to the government.

The search warrant application is for authorization to search the locations set forth below,

each of which is more fully described in Attachments A-I through A-5 to this Affidavit, for

documents, records, materials, and items relating to violations of Title 26, United States Code,

Section 7206(1) (Fraud and False Statement) and Title 18, United States Code, Section 287

(False or Fraudulent Claims). As this Affidavit will show, there is probable cause to believe that

SUNDBERG filed a fraudulent federal income tax return Form 1040 for the tax year 2008, in

which he reported a false 1099-0ID (Original Issue Discount) amount and adjustment that

resulted in a fraudulent refund check being issued to him for over five million dollars

($5,083,609). The locations to be searched are:

a) SUNDBERG'S residence located at 26 King Court, San Mateo, California (more fully

described in Attachment A-I);

b) SUNDBERG's 2003 Lincoln SUV, California license plate # 5CRK074 (more fully

described in Attachment A-2);

c) SUNDBERG's business, Access Mortgage and Financial, located at 1660 S. Amphlett

Blvd. #308, San Mateo, California (more fully described in Attachment A-3);

d) SUNDBERG's mailing address, located at 870 Sunset Dr., San Carlos, California

(more fully described in Attachment A-4); and

e) Homestead Suites, Room 127, located at 3 Circle Star Way, San Carlos, California

(more fully described in Attachment A-5).

Affidavit of Special Agent Quyen Madrigal, IRS-CI In Support of an Arrest and Search Warrant Application

Page I of26


I respectfully submit that evidence, fruits, andlor instrumentalities of the criminal

offenses described above will be found at each of the locations to be searched.

APPLICABLE LAW

The following criminal statutes, among others, are applicable to the conduct described in

this affidavit. A violation of:

a. 26 U.S.c. § 7206(1) makes it a crime to willfully make and subscribe any return,

statement, or other document, which contains or is verified by a written declaration that it

is made under the penalties of perjury, and which he does not believe to be true and

correct as to every material matter;

b. 18 USC § 287 makes it a crime for a person to submit, or cause another to submit, any

claim upon or against the United States, or any department or agency thereof, knowing

such claim to be false, fictitious, or fraudulent.

AFFIANT'S BACKGROUND AND EXPERIENCE

REGARDING ITEMS TO BE SEIZED

I am a Special Agent with the Internal Revenue Service, Criminal Investigation (IRS-CI),

and have been so employed since April 2004. My duties and responsibilities include the

investigation of possible criminal violations of the Internal Revenue laws (Title 26, United States

Code), the Bank Secrecy Act, (Title 31, United States Code), the Money Laundering Control Act

of 1986 (Title 18, United States Code, Sections 1956 and 1957), and related offenses.

I have a Bachelor of Science degree in Business Administration, with an emphasis in

Computer. Information Systems and Telecommunications from California State East Bay

(formerly California State University Hayward). I have also earned a Masters of Business

Administration degree in Telecommunications and Strategic Management from CSUH. I

received six months of intensive training at the Federal Law Enforcement Training Center in

Glynco, Georgia, to become a Special Agent. This training emphasized the investigation of

criminal offenses under Titles 26, 18, and 31 of the United States Code. I have also been trained

in the criminal procedures related to searches and seizures. I have received training in the

planning, preparation and execution of search warrants for financial documents.

I have conducted and assisted in numerous investigations involving financial crimes. I

have personally conducted search warrants, surveillances and have interviewed many witnesses

Affidavit of Special Agent Quyen Madrigal. IRS-CI In Support of an Arrest and Search Warrant Application

Page 2 of26


and defendants who were involved in, or had knowledge of, violations of the Internal Revenue

Code, the Bank Secrecy Act, and the Money Laundering Control Act.

In the course of my employment with IRS-CI, I have conducted or been involved in

numerous investigations of alleged criminal violations, which have included: filing a false return

(26 U.S.C. 7206(1); tax evasion (26 U.S.C. 7201); aiding or assisting in the preparation offalse

tax returns (26 U.S.C. § 7206(2)); conspiring to defraud the United States with respect to claims

(18 U.S.C. § 286); false or fraudulent claims (18, U.S.c. § 287); money laundering (18 U.S.C. §§

1956, 1957); identity fraud (18 U.S.c. § 1028); structuring cash transactions (31 U.S.c. §

5324(a)); mail fraud (18 U.S.c. § 1341); wire fraud (18 U.S.c. § 1343); and forfeiture (18

U.S.C. §§ 981,982).

I have participated in the execution of Federal search warrants involving the seizure of

contraband and records relating to the concealment of assets and proceeds from fraud, and the

execution of consensual searches of records. These records included, but were not limited to,

telephone bills, personal telephone books, e-mails, photographs and letters that have identified

co-conspirators and others involved in the fraud, records pertaining to the purchase of real and

personal property, bank records, escrow records, credit card records, tax returns, business books

and records, and computer hardware and software.

From my experience, I know that individuals normally maintain records of their financial

activity, such as receipts for expenditures by cash and check, bank records and other financial

documents at their place of business, their residence, as well as, sometimes, in their vehicles.

Furthermore, individuals engaged in an income-producing business keep records of the financial

activities of the business for numerous reasons and often use accountants to complete financial

statements and tax returns for their business and personal returns.

Persons engaged in fraudulent tax schemes frequently retain records of their

correspondence and transactions within their residence, place of business rented storage units,

vehicles or other places under their control. These records may be in the form of written notes

and correspondence, receipts, negotiated instruments, contracts, bank statements, tax returns and

other records. Records of this kind are also often stored on computer media.

Persons engaged in fr,\udulent tax schemes often maintain such records for long periods

of time, particularly when they are involved in ongoing criminal conduct. There are many

reasons why criminal offenders maintain evidence for lengthy periods of time. The evidence


, Page 3 of26


may appear innocuous at first glance (e.g. financial, credit card and banking documents, travel

documents, receipts, documents reflecting purchases of assets, personal calendars, telephone and

address directories, check books, videotapes and photographs, utility records, ownership records,

letters and note, tax returns and financial records, escrow files, telephone and pager bills, keys to

safe deposit boxes, packaging materials, computer hardware and software), but have significance

and relevance when considered together and in light of other evidence. The criminal offender

may no longer realize he or she still possesses the evidence, or may believe that law enforcement

would not be able to obtain a warrant to seize the evidence. The criminal offender may also be

under the mistaken belief that he or she has deleted, hidden, or otherwise destroyed computer

related evidence, but which evidence may yet be retrievable by a trained forensic computer

expert.

Persons engaged in fraudulent tax schemes, and specifically schemes involving the

frivolous preparation of tax returns, have become a significant problem for the IRS. As a result,

the IRS Criminal Investigation Return Preparer Program (RPP) was implemented in 1996, and

established procedures to foster compliance by identifying, investigating, and prosecuting

abusive return preparers. The program was developed to enhance compliance among return

preparers by engaging in enforcement actions and/or asserting appropriate civil penalties against

unscrupulous or incompetent return preparers. The Fraud Detection Center (FDC) is the first

unit in the IRS that identifies fraudulent and frivolous tax return schemes.

The IRS centralized the Frivolous Return Program (FRP) in Ogden, Utah. The IRS

started the process of centralization in August of 2000 and completed it in January of 2001. Part

of the reason for centralizing the program was that frivolous filings require specialized

processing. Once the program was centralized in Ogden, the expertise was available and the

processes improved for consistency and efficiency.

The FRP has the responsibility to identify returns filed with the IRS which qualify as

frivolous returns subject to the penalty imposed by Congress under IRC § 6702. In IRC § 6702,

Congress directed the imposition of a penalty of $500 (which was increased to $5,000 in

December of 2006) when an individual files an income tax return or what purports to be an

income tax return (or as of December, 2006, a specified frivolous submission) which asserts a

frivolous argument or position. The FRP notifies the taxpayer of the need to correct the filing or

have the penalty imposed. Unless the taxpayer files a corrected return, the FRP assesses the


Page 4 of26


penalty under IRC § 6702. The FRP then reviews the returns for audit and, when appropriate,

issues a notice of deficiency.

From my experience, I know that fraudulent return preparers frequently prepare and file

false and fraudulent tax returns for large numbers of taxpayers using a variety of methods to

formulate fraudulent and illegal deductions for reducing taxable income andlor obtaining

fraudulent refunds. These methods include, but are not limited to, inflated personal or business

expenses, false deductions, false withholding, unallowable credits, excessive exemptions, or

fraudulent tax credits.

BACKGROUND ON FILING A FORM 1099 OlD TAX RETURN

There are legitimate financial transactions that involve original issue discounts. Those

transactions are governed by Internal Revenue Code, Section 1275. Publication 550, Investment

Income and Expenses for 2008 tax returns, explains that OID is a form of imputed interest. A

Form 1099-0ID is generally included in a taxpayer's income as it accrues over the term of the

debt instrument, whether or not the taxpayer receives any interest payments from the issuer. A

debt instrument generally has OID when the instrument is issued at a discount, i.e., at a price that

is less than the stated redemption price at maturity. OID is the difference between the stated

redemption price at maturity and the issue price.

For example, if a taxpayer pays $800 for aiD-year bond with a stated redemption price at

maturity of $1,000, the OID is $200 and the taxpayer must include the OID in income as it

accrues over the term of the bond - in this example, the OID would be $20 per year. The

taxpayer is required to pay tax on that imputed interest even though he did not actually receive it.

The issuer of the debt instrument (or the broker, if the instrument was held through a

broker) should give the taxpayer a Form 1099-0ID, or a similar statement, if the total OID for

the calendar year is $10 or more. Form 1099-0ID will show, in box 1, the amount of OID for the

part of the year that the taxpayer held the bond. It also will show, in box 2, the stated interest that

the taxpayer must include in his or her income. A copy of the Form 1099-0ID will be sent to the

IRS. If the taxpayer reports OlD in an amount greater or less than the amount shown on the

Form 1099-0ID, he must include an "adjustment" of the discrepancy. That adjustment is

reported on Schedule B of the tax return.

II


Page 5 of26


Example of a Proper Use of an OlD Adjustment

A helpful explanation of the proper use of an OlD adjustment is found at this website:

http://www.associatedcontent.comlarticleI731809/a basic understanding of the 1099 oid.html

?cat=3 ("A Basic Understanding of the 1099 OID Could Save You Thousands of Dollars in

Taxes," Ed Winslow).

Consider the case of the market-linked CD. These are zero coupon, principal protected instruments that pay interest at maturity based upon the performance of an underlying index such as the S&P500, Dow Jones Eurostoxx 50, commodity indexes/prices or even foreign currency movements relative to the dollar. There is no interest paid until matnrity. Holders of these secnrities receive annual 1099-OlD reporting even though it's unknown whether or not there will be any interest paid at maturity. For example, an eight year S&P 500 linked CD bought in March of 2000 for $20,000 when the index was at 1500 returned $20,000 in March of 2008 with the S&P 500 at 1300. The full amount of the original investment was retnrned despite the

. 13% drop in the index because of the underlying principal guarantee. In this example, eight years of OID was reported to the owner of this CD and has been reported as interest on the tax retum. Using a simplifYing assumption of a 5% rate per year this will amount to over $8,000 of OID interest that was reported but never received.

In this market-linked CD example an $8,000 OID adjustment is required to properly recognize the fact that no profit or loss was recognized on this investment. The adjustment is shown as a negative number on Schedule B of the tax retnrn.

Fraudulent Use of "Adjustment" to Form 1099-0ID

There are numerous kinds of 1099-0ID fraud that vary in their degree of complexity. , One version is simply to invent amounts to treat as 1099-0ID interest, then "adjust" those

amounts by another invented figure, all for the fraudulent purpose of generating a tax refund

when no such refund is due.

That is what SUNDBERG did. In his 2008 tax return, as described in more detail below,

he submitted schedules showing huge amounts of interest income that there is no evidence he in

fact received. He offset that fictitious income with an equally (or almost equally) large "OlD


Page 6 of26


adjustment." SUNDBERG then carried that fraudulent adjustment from his Schedule B to page

two, line 62 ("Federal income tax withheld from Forms W-2 and 1099") of his Form 1040,

resulting in a huge, and entirely undeserved, tax refund.

Background Regarding Tax Challengers Who Commit OlD Fraud

According to the IRS Frivolous Return Program,Sr. Technical Advisor Shauna Henline,

OlD fraud is one of the latest schemes to be addressed by the "tax challenger" community. The

scheme is based on the perceived notion that the government has created a "straw man" for each

United States citizen and that there is a "secret" account at the Treasury for each "straw man."

This fantasy is compounded by the equally false notion that a taxpayer can "issue" a Form 1099

OlD to a creditor, drawing upon the Treasury funds in the "secret" account corresponding to the

taxpayer's "straw man," and thereby paying the creditor with the Treasury's funds instead of the

taxpayer's own money. An IRS publication, "The Truth About Frivolous Tax Arguments,"

explains the "theory":

Advocates of this contention encourage individuals to use a Form 1099-0ID, Original Issue Discount, or a bogus financial instrument such as a bonded promissory note as what purports to be a debt payment method for credit cards or mortgage debt. This scheme has evolved somewhat from an earlier frivolous position under which a secret bank account (sometimes referred to as a "straw man" account) was supposedly created at the Treasury Department for each U.S. citizen that individuals could use to pay tax and non-tax debts and claim withholding credits. Those who put forth this theory often argue that the proper way to redeem or draw on the account is to use some form of made-up financial instrument. This has frequently involved what looks like a check drawn on the United States Treasury or other similar paper instruments, e.g., bonded promissory notes.

More recently, this redemption theory asserts that persons can draw on the secret or "straw man" Treasury account by sending a Form 1099-0ID to a creditor and the creditor can present the form to the Treasury Department and receive full payment of the debt. In addition, the proponents appear to assert that the Form 1099-0ID permits them to access their secret Treasury Account for an amount equal to the face amount of the Form 1099-0ID in the form of a tax refund.


Page 7 of26


http://www.irs.gov/pub/irs-utllfriv tax.pdf

Some promoters, incl~ding, as will be discussed below, certain individuals with whom

SUNDBERG is associated, market a package, kit, or other materials that claim to show taxpayers

how they can avoid paying income taxes based on the "straw man" and other meritless

arguments.

FACTS SUPPORTING PROBABLE CAUSE

On or about July 30, 2009 IRS-CI received information from a Senior Analyst in IRS-CI

headquarters regarding a 1099 OID refund scheme. The referral was initiated by Chris Greiner,

Intelligence Analyst, Bureau of Prisons to Jeff Gordon, Treasury Inspector General for Tax

Administration (TIGTA). In a report dated July 21, 2009 Greiner reported to TIGTA that ajail

conversation had occurred on Jnne 16, 2009, from inmate Kurt Johnson to his father Fred

Johnson, during which Fred Johnson stated that SUNDBERG had received money for the 1099

OID in the amonnt of over six figures. Fred Johnson went on to state that SUNDBERG needed

to move the money out of his name right away.

Mr. Greiner's memo also reported that during telephone calls made by Kurt Johnson to

Marc Anderson on July 7 & 8, 2009, Johnson discussed bonds and securities and told Marc to

contact SUNDBERG for instructions on what to do next since SUNDBERG had had success.

Mr. Greiner's memo' also reflects that one Robert Knupp (Knupp) was not used to E-file

SUNDBERG's Return. Knupp is a current target of a federal criminal investigation by IRS-CI.

It is anticipated that Knupp will be charged with eight connts of violating 18 U.S.C. § 287. Five

of the connts are based on Knupp's personal returns and two are electronic returns he prepared

for others. In addition to his own returns, Knupp prepared or filed 49 electronic returns fitting

the OID scheme. According to Special Agent Joel Ernst, who is investigating Knupp, it appears

that Knupp has filed OID returns for Kurt Johnson while Johnson has been incarcerated.

SUNDBERG is a 34 year old male who resides at 26 King Ct., San Mateo, CA. The

California Department of Motor Vehicles provided two CDLs nnder the CDL #A8112722. One

was nnder the name Seth C. Sundberg, 870 Snnset Dr., San Carlos, CA (date of issue

05/17/2008), and the other was nnder the name Franco Metcalf, 439 Manor Dr., Pacifica, CA

(date of issue 1111712008). Both photos are of the same person. SUNDBERG has two weapons

registered to him: a 9 mm Berretta and a 9 mm Springfield.


Page 8 of26


SUNDBERG currently works for Access Mortgage and Financial located at 1660 S.

Amphlett Blvd. #308, San Mateo, CA. Internet research shows that SUNDBERG is the branch

manager and that the business is a mortgage and financial business. In addition, Internet

research on Access Mortgage and Financial indicates that SUNDBERG was one of the founders

of the company, which offers residential and commercial lending.

SUNDBERG is also the Principal for Sound Mountain Investments, LLC (SMI) located

at 870 Sunset Dr., San Carlos, CA 94070. Internet research shows that SMI is an Investments

and Property Management corporation which specializes in consulting, private placement

investments, marketing and real estate property management. The Sound Mountain Investments

website states, "The only real wealth hedge against inflation is to acquire gold and silver."

IRS records show that SUNDBERG filed a U.S. Individual Income Tax Return for the

tax year 2008 with the IRS. The return reported that SUNDBERG claimed a $5,732,580 interest

income amount on Line 1 of his Schedule B (Interest and Ordinary Dividends), Part I - Interest.

In addition, he reported an "OlD Adjustment" of (-$5,732,441). Below is a summary of

SUNDBERG'S 2008 tax return information:

Summary of Tax Return

Income

AGI

Wages

Taxable Interest

Business Income (or Loss)

Capital Gain

IRA Distribution

Pensions and Annuities

Rental Real Estate, Partnerships, sCarps

Total Income

One half SE Tax

Total AGI

Tax and Credits

Itemized Deductions

AGI Less Itemized Deductions

Exemption' $3,500

'No Taxable Income'Reported on Line 43

'No Tax Amount Reported on Line 44


$ 3,539.00

$ 139.00

$ 21,285.00

$ 5,968.00

$ 10,950.00

$ 406.00

$ (177,968.00)

$ (135,681.00)

$ 1,504.00

$ (137,185.00)

$ 5,450.00

$ (142,635,00)

$ 3,500,00

$

$

Page 9 of26


'No Alternative Minimum Tax on Line 45

'No Credits Reported (Lines 47-54)

Credits Less Taxes (Line 55 - Line 46)

Other Taxes

Self Employment Tax

Additional Tax on IRA

Total Tax

Payments

Federal Income Tax Witheld from Form W-2 and 1099

'Refer to 3-2 for further details

Total Payments

Refund

Total Payments Less Total Tax

Refund Amount

$

$

$

$

$

$

3,008.00

41.00

3,049.00

$ 5,087,059.00

$ 5,087,059.00

$ 5,084,0 I 0.00

$ 5,084,010.00

Attached to the return was an Interest Income Summary which itemized the OlD amounts. See

below:

Summary of Schedule B-Interest Income Summary

Name of Broker or Other Payer Gross Interest Taxable Interest Adj Type OIDAdj Amt

Citibank $ 102.00 $ 102.00 $

Bank United $ 37.00 $ 37.00 $

Aegis Wholesale Corp $ 127,200.00 $ 127,200.00 OID $ 127,200.00

Aegis $ 31,800.00 $ 31,800.00 OID $ 31,800.00

Central Mortgage Company $ 127,200.00 $ 127,200.00 OID $ 127,200.00

GMAC Mortgage Co $ 31,800.00 $ 31,800.00 OID $ 31,800.00

San Mateo Credit Union $ 28,857.00 $ 28,857.00 OID $ 28,857.00

Bank United $ 562,000.00 $ 562,000.00 OID $ 562,000.00

Paul Financial LLC $ 798,400.00 $ 798,400.00 OID $ 798,400.00

GMAC Mortgage Corp $ 798,400.00 $ 798,400.00 OID $ 798,400.00



America1s Servicing Co $ 147,720.00 $ 147,720.00 010 $ 147,720.00

Indymac $ 33,600.00 $ 33,600.00 OID $ 33,600.00

Washington Mutual $ 450,000.00 $ 450,000.00 OID $ 450,000.00

CMGlnc $ 130,500.00 $ 130,500.00 OID $ 130,500.00


Page 10 of26


Aurora Loan Servicing $ 130,500.00 $ 130,500.00 OlD $ 130,500.00

First NatL Bank Arizona $ 176,000.00 $ 176,000.00 OlD $ 176,000.00

Ocala Nat! Bank $ 196,000.00 $ 196,000.00 OlD $ 196,000.00

GMACMortCo $ 36,930.00 $ 36,930.00 OlD $ 36,930.00

Aegis Wholesale Corp $ 36,930.00 $ 36,930.00 OlD $ 36,930.00



Central Mortgage Company $ 127,200.00 $ 127,200.00 OlD $ 127,200.00

GMAC $ 31,800.00 $ 31,800.00 OlD $ 31,800.00


America's Servicing Co $ 134,400.00 $ 134,400.00 OlD $ 134,400.00



Countrywide $ 176,000.00 $ 176,000.00 OID $ 176,000.00

First Florida Bank $ 165,695.00 $ 165,695.00 . OID $ 165,695.00

Borel Private Bank Trust $ 226,379.00 $ 226,379.00 OID $ 226,379.00

Bank of America $ 18,702.00 $ 18,702.00 OID $ 18,702.00

Wells Fargo $ 128,208.00 $ 128,208.00 OID $ 128,208.00

Chase $ 23,000.00 $ 23,000.00 OlD $ 23,000.00

Chase $ 20,500.00 $ 20,500.00 OID $ 20,500.00

Wells Fargo $ 23,000.00 $ 23,000.00 OlD $ 23,000.00

Wells Fargo $ 7,500.00 $ 7,500.00 OID $ 7,500.00

Discover $ 12,000.00 $ 12,000.00 OID $ 12,000.00

Citibank $ 21,000.00 $ 21,000.00 OID $ 21,000.00

Total $ 5,732,580.00 $ 5,732,580.00 $ 5,732,441.00

Based on the entries listed above, the IRS issued a refund check to SUNDBERG on May 29,

2009, for $5,083,609.25. The check was deposited into a Borel Private Bank & Trust Account

under SUNDBERG'S name (account # 175645-01). The account was opened on June 3, 2009

along with account # 175645-21. SUNDBERG is the sole signature authority for both accounts.

The following table shows the disposition of the refund after it was deposited by SUNDBERG at

Borel Private Bank & Trust.

Account # 117645-01

Date Deposit Wire Amollllt

06/03/2009 $ 5,083,609.25


Check Amount

Page II of26

Beneficiary/Payee

Seth Sundberg


06/03/2009 $ (2,585,609.25) Seth Sundberg

06/04/2009 $ (100,000.00) Seth Sundberg

06/04/2009 $ (801,000.00) Red Havana Holdings

06/0412009 $ (1,000,000,00) Seth Sundberg

06/0512009 $ (150,000.00) 130859 Acts Revival Center

06/05/2009 $ (150,000,00) 130860 Acts Revival Center

06/05/2009 $ (129,000.00) 130861 Acts Revival Center

06/0512009 $ (9,112.00) Cash 06/1512009 $ (20,000.00) Cash

06/04/2009 $ (100,000.00) Internet banking

TOTAL $ 5,083,609,25 $ (4,586,609.25) $ (458,112.00)

Account # 117645MOl Deposit $ 5,083,609.25

Summary of Activity Wires $ (4,586,609.25)

Checks $ (458,112.00)

BALANCE $ 38,888.00

Accouut # 117645-21

Date Deposit Wire Amount Check Amount Check # Bencficiarl:/Payee

06/03/2009 $ 2,585,609.25

06/05/2009 $ (100,000.00) 130872 Seth Sundberg

06/0512009 $ (50,000.00) 130874 Seth Sundberg

06/0512009 $ (50,000.00) 130877 Seth Sundberg

06/05/2009 $ (100,000.00) 130867 Seth Sundberg

06/05/2009 $ (100,000.00) 130868 Seth Sundberg

06/0512009 $ (100,000.00) 130869 Seth Sundberg

06/05/2009 $ (100,000.00) 130870 Seth Sundberg

06/05/2009 $ (100,000.00) 130871 Seth Sundberg

06/05/2009 $ (100,000.00) 130862 Seth Sundberg

06/05/2009 $ (100,000.00) 130863 Seth Sundberg

06/05/2009 $ (100,000.00) 130864 Seth Sundberg

06/05/2009 $ (100,000.00) 130865 Seth Sundberg 06105/2009 $ (100,000.00) 130866 Seth Sundberg

06/0812009 $ (100,000.00) 130893 Seth Sundberg 06/08/2009 $ (100,000.00) 130891 Seth Sundberg

06/08/2009 $ (100,000.00) 130892 Seth Sundberg

06/15/2009 $ (80,000.00)

06/25/2009 $ (900,000.00)

TOTAL $ 2,585,609.25 $ (900,000.00) $ (1,580,000.00)

Account # 117645-21 Deposit $ 2,585,609.25

Summary of Activity Wires $ (900,000.00)

Checks $ (1,580,000,00)

BALANCE $ 105,609.25


Page 12 of26


On July 30, 2009 Revenue Officer Paul Enjalran (RO Enjalran) placed levies on

SUNDBERG'S bank accounts at Borel Private Bank & Trust, Bank of America, and on August ,

4,2009, a levy was placed on SUNDBERG'S Citibank account. Information provided by Borel

Private Bank on August 18,2009 showed that $1,300,000 in cashier's checks made payable to

SUNDBERG have not yet been endorsed.

Portion of the Fraudulent Funds Issued to an Entity in San Jose

Three cashier's checks were issued to Acts Revival Center on June 5, 2009 from account

number 117564-01 and were "cleared" between the period of June 17,2009 and July 20,2009.

Acts Revival Center corresponds to tax identification number 77-0559437, Michael-John Toste,

whose address is listed as 1124 Crescent Drive, San Jose, CA 95125.

SUNDBERG's Involvement With Fraudulent Promoters

In addition to the 2008 federal income tax return that SUNDBERG filed, the IRS

Frivolous Return Program received letters signed by SUNDBERG and dated February 24, 2009.

The first was received by the IRS on February 24, 2009 and was reviewed by the Frivolous

Return Unit on March 30, 2009. That letter was a "request for accountability and verification of

appropriation of funds" addressed to Aegis Wholesale Corporation. The letter states that

SUNDBERG, Mortgager is no longer responsible for any future payments to the lender and that

based on the SEC registration of Aegis, the" ... note we tendered to you has been sold numerous

times for the aggregate amount. Therefore, Aegis Wholesale Corporation owes the surplus of

funds that the trust created as stipulated by the Mortage or Deed of Trust." Two additional

letters from SUNDBERG to GMAC and America's Servicing Company dated February 24,2009

were also submitted to the IRS regarding "Constant Harassment and Unwanted Phone Calls."

This type of correspondence is common among those who file frivolous returns. The IRS sent

SUNDBERG a 3175c letter -- Frivolous Correspondence Response -- on 5120/2009. The IRS

Frivolous Return Unit also received letters from SUNDBERG on April 8, 2009, April 14, 2009,

and May 13,2009.

Nicole Bermudez: Information from the Memphis Fraud Detection Center (FDC) shows

that SUNDBERG'S 1099 OID information was submitted electronically to the IRS by Nicole D.

Bermudez, 1940 Marina Way, Buford, GA. Ms. Bermudez has been identified as a preparer of

fraudulent or frivolous returns by the FDC. Further, the FDC has provided a list of at least 9

additional fraudulent/frivolous Form 1099-0ID Information Returns (IRP) submitted by Ms.


Page 13 of26


Bermudez, all with OID interest income and OID withholding amounts that were in large

amounts and almost equal in value and which caused large refunds to be generated.

The IRS utilizes Information Returns Processing (IRP) data reported to them by financial

institutions to cross-reference against income reported on tax returns by the taxpayer. If interest

or dividend income reported by a taxpayer is inconsistent with information reported by a

financial institution, this discrepancy would come to the attention of the IRS. Submitting

fraudulent IRP data is, therefore, a more sophisticated method of committing tax fraud: the

taxpayer reports a fraudulent amount of income received, and arranges to have IRP data

submitted to the IRS to correspond to the amount fraudulently reported.

Bermudez input frivolous 1099 information on behalf of SUNDBERG to the IRS using

two different types of Forms 1099 which should have been reported by the financial information

from which SUNDBERG earned income. Bermudez made 76 entries to the IRS for 1099 OlD

information on behalf of SUNDBERG, totaling $ 67,171,204 from March 31, 2009 through

April 29, 2009. In addition, she made 38 entries to input 1099-A (Acquisition or Abandonment

of Secured Property) totaling $5,732,942 from April 2, 2009 through April 8, 2009.

Bank records obtained from Borel Private Bank show that SUNDBERG paid Bermudez

$801,000 on June 4, 2009. This payment is presumably for filing SUNDBERG'S 1099 OID

information. A payment from SUNDBERG'S Borel account was sent to Red Havana Holdings,

1940 Marina Way, Buford, GA 30518. According to Revenue Officer Paul Enjalran, IRS

records show that a tax identification number of 26-6283790 belongs to the Bermudez Family

Trust, Red Havana Holdings Trustee, 1940 Marina Way, Buford, GA 30518. In addition, an

outgoing wire for $25,000 was conducted from an account maintained by Sound Mountain

Investments LLC to a Bank of America account in the name CNM Revolutions LLC. IRS

records show that CNM Revolutions LLC maintains a TIN of 32-0079965, Carlos Bermudez of

1940 Marina Way, Buford, GA 30518.

Karen Liane Miller: Information from Special Agent Suzanne Poshedly from the IRS

CI Nashville Field Office indicates that her subject, Karen Miller is a promoter of frivolous tax

schemes. During her investigation, it was discovered that Miller filed a 2008 joint federal

income tax return for Nicole and Carlos Bermudez which reflected amounts owed to creditors as

income on their Schedule B. Information from the IRS-FDC in Memphis shows that a refund of

$473,975 was issued due to the false withholding amount of$688,303.


Page 14 of26


In February 2009, the FRP identified Karen Liane Miller and Knupp (previously

mentioned in the jail conversation by Kurt Johnson) as likely co-conspirators, preparing

fraudulent tax returns utilizing the 1099-0ID scheme characteristics.

On or about February 23, 2009, the IRS-CI Nashville Field Office initiated an

investigation concerning Karen Liane Miller, who prepared 37 electronically filed 2008 Forms

1040, U.S. Individual Income Tax Returns. These returns were identified as potentially

fraudulent due to claims of large interest income with nearly-matching amounts of federal

withholding, resulting in exorbitant claims for refund.

On or about March 4, 2009, Special Agent Joel Ernst, IRS-CI Atlanta Field Office was

contacted by the Nashville Field Office to interview Dylette Knupp, residing at 231 Lindsey

Place, Marietta, Georgia 30067 and whose 2008 return was one of the 37 potentially fraudulent

returns prepared by Miller. The filing of Dylette Knupp's 2008 tax return resulted in a released

refund of $73,228. Dylette Knupp's husband, Knupp, who resides at the same address, was also

identified as having his 2008 Form 1040 prepared by Miller.

Robert Knupp: The FRP investigation discovered that Knupp was also preparing tax

returns believed to be fraudulent in a manner consistent with those filed by Miller. On or about

March 17, 2009, the FRP notified Atlanta IRS-CI of Robert Knupp's actions and a criminal

investigation was immediately initiated. Thus far, the investigation has uncovered at least 33

potentially fraudulent 2008 Forms 1040, U.S. Individual Income Tax Returns, which were

electronically filed with the IRS between February 21, 2009 and March 26, 2009. These 33

returns were filed using the Electronic Filing Identification Number (EFIN) 674938, assigned to

Robert Knupp, and each tax return identifies "ROBERT KNUPP" as the return preparer and

RLK Inc. as his firm name.

Furthermore, the FRP and the Nashville IRS-CI offices established a connection between

Robert Knupp and Miller by identifying Robert Knupp's role as a third party designee for at least

10 of37 tax returns that were prepared and filed by Miller. Robert Knupp's role as a third party

designee allows him to discuss the filed tax return with the IRS.

All 33 returns designating Robert Knupp as the preparer contain substantial interest

income and nearly-matching federal withholding amounts, generating refund claims between

$6,102 and $994,747.


Page 15 of26


Knupp prepared 33 returns that have characteristics consistent with the Form 1099-0ID

scheme: disproportionately large amounts of federal income tax withheld compared to total

income reported. In the returns Knupp prepared, "Interest Income" claimed on the returns

constitutes the majority of the total income claimed. Additionally, the claimed federal income

tax withheld is very similar in amount to the "Interest Income" listed. Such similarities in

income and withholding amounts have been identified by the IRS as an indicator of fraud.

Kurt Johnson: Johnson and his co-defendant Dale Scott Heineman were convicted and

sentenced on March 18, 2008 for orchestrating a nationwide debt elimination scheme through

their company, the Dorean Group. The mortgage elimination scheme entailed fraudulent

documents recorded as part of their clients' titles to make it appear as though mortgage lenders'

secured interests in the properties were canceled when, in fact, the corresponding mortgage and •

home equity loans had not been fully repaid. At the direction of the Dorean Group, some of its

clients used these fraudulently-generated "free and clear" titles to obtain hundreds of thousands

of dollars in new home equity loans from lenders who were led to believe that the properties

were unencumbered by loans.

Johnson and the Dorean Group are also related to Robert Knupp. According to Special

Agent Joel Ernst, Knupp's personal residence is owned by Glenn Crocker, who put the home in

the name ofthe Crocker Family Trust. The trustee of the trust is Kurt Jo~son.

Concept Marketing International: SUNDBERG reported on his 2008 tax return,

Schedule C-EZ (Net Profit From Business) that he is involved in a marketing business, Concept

Marketing International (CMI) located in Lee's Summit, Missouri. Internet research on

SUNDBERG shows that he was a "CSA" of Concept Marketing International from 2006-2008.

CMI was a retail and direct sales company that sold American Silver Eagle Coins. CMI

representatives advised their customers that purchasing American Silver Eagle coins would

constitute a legitimate home-based business. They told their customers that they could claim to

have home-based businesses in order to deduct personal living expenses from their income.

Research on CMI resulted in the following findings. On January 23, 2004, CMI was ordered by

the State of Missouri to cease and desist offering or selling notes or evidence of indebtedness in

CMI. On June 27, 2006 the founder of CMI, James Aldridge was indicted for filing false income

tax returns and aiding and abetting others to file false tax returns.

Affidavit of Special Agent Quyen'Madrigal, IRS-CI In Support of an Arrest and Search Warrant Application

Page 16 of26


Raymond A. Renfrow: On March 22, 2007 a Complaint for Permanent Injunction and

Other Equitable Relief was filed against Raymond A. Renfrow. Renfrow is the Regional Sales

Director and a trustee of CMI trust. Renfrow provides tax preparation and training courses for

CMI customers. He also conducts monthly "Income Tax Boot Camps" throughout the country in

2006 and 2007 to promote tax fraud schemes. Renfrow is a self-proclaimed as a tax challenger

and knows or has reason to know that the CMI tax-fraud scheme is illegal. Renfrow devised and

promoted to CMI customers that they could falsely claim to have home-based businesses in order

to fraudulently deduct personal living expenses from their taxable income, including deductions

for non-deductible items (i.e. groceries, furniture, housekeeping, etc.).

PROBABLE CAUSE TO SEARCH SPECIFIC LOCATIONS

2008 Tax Return: SUNDBERG listed 870 Sunset Drive, San Carlos, California, as

his home address on the 2008 federal income tax return he filed with the IRS. The refund check

for $5,083,609.25 was mailed to SUNDBERG at 870 Sunset Drive, in San Carlos.

Financial Information: The signature card provided by Borel Private Bank and Trust

lists 870 Sunset Drive, San Carlos, as SUNDBERG's address. A Currency Transaction Report

was also filed by Borel Private Bank and Trust on SUNDBERG dated June 11, 2009 for

$100,000 cash out. The address listed on the CTR is 870 Sunset Drive, in San Carlos.

Information from Citibank and Bank of America also indicates that SUNDBERG listed 870

Sunset Dr., San Carlos, CA as his address with those banks. This shows that SUNDBERG

receIves financial information, such as bank statements and other correspondence, at that

address.

SUNDBERG also filed seven documents with the United States Bankruptcy Court,

Northern District of California from January 5, 2009 through June 16, 2009. Five of those

documents listed his address as 870 Sunset Dr., San Carlos, CA, and one listed 870 Sunset Dr.,

San Mateo, CA. (One document did not require an address to be listed.) 1

1 One of the bankruptcy documents provides some insight into SUNDBERG's unusual worldview. He writes: "Now, by special appearance, comes Seth C. Sundberg, the flesh and blood man, unschooled in law, to make the following REQUEST, as per II u.s.c. 52IIi)(3), with clean hands, full disclosure and no intent to defraud, to request additional time, 30 more days to file the prescribed documents. ~l My yea is my yea and my nay is my nay." Affidavit of Special Agent Quyen Madrigal, IRS·CI In Support of an Arrest and Search Warrant Application

Page 17 of26


"Trash Runs." Law enforcement agents conducted three trash pickups of

SUNDBERG's garbage. The first occurred on August 4, 2009 at 870 Sunset Drive, San Carlos,

CA. The second occurred on August 13, 2009 at 26 King Ct., San Mateo, CA and the third

occurred on August 20, 2009, also at 26 King Ct., San Mateo, CA. Evidence gathered from the

garbage pickups indicates that SUNDBERG uses 870 Sunset Drive, San Carlos, CA as his

mailing address, but that he uses 26 King Ct., San Mateo, CA as his resiQence and "ship to"

address. Mail addressed to SUNDBERG at 870 Sunset Drive was found in the garbage collected

at 26 King Ct., San Mateo, CA. The collections show that SUNDBERG receives financial and

tax documents through the mail, maintains financial and tax related documents (both personal

and business) at his residence, and uses or has access to a computer. In addition, records relative

to CM! were found in the trash, which shows that additional tax fraud materials or

correspondence may be located at SUNDBERG's residence.

In particular, on August 20, 2009, a trash run at 26 King Court, in San Mateo, revealed

the following items addressed to SUNDBERG at 870 Sunset Dr., San Carlos, CA:

An envelope from Kurt Johnson #13177-081, Federal Detention Center. The envelope

contained a letter dated September 24, 2007 addressed to Sundberg. The following are excerpts

from Johnson's letter:

• "It was quite a surprise hearing from you. My father had been keeping me

informed of your dealings in his bragging upon you. I am glad things are

going wei! for you."

• "Once I've finished my battle I look forward to meeting with you again."

• "Soon you'll discover that I will be one of the prominent figures in the

financial markets. The government assured me this role when they decided to

prosecute me. I told them on television this was the dumbest thing they could

do but being populated with a gaggle of dolts is not the milieu of wisdom."

• "My father said you have a proclivity to finance so I'm sure you'll find what

I'm accomplishing very interesting."

In addition, documents found during the trash run at 26 King Court included records

related to the business at 1660 S. Arnphlett Blvd. #308, San Mateo, CA; a receipt reflecting the

billing address of [email protected], 870 Sunset Dr., San Carlos, CA and billing

address of 1660 S. Arnphlett Blvd., suite 308, San Mateo, CA 94402; four rental applications for


Page 18 of26


910 Sunset Dr., San Carlos, CA; a cover letter from Access Mortgage and Financial signed by

Sundberg related to the rental property at 910 Sunset Dr., San Carlos, CA; and an engagement

Letter from the Law Offices of Hoang-Chi Truong to Seth Sundberg, Access Mortgage and

Financial Inc. dated July 2005. Also found was a Personal Information Sheet in which

SUNDBERG states that he maintains a safe deposit box at Bank of America, 955 El Camino

Real, South San Francisco, Box #P1306.

In addition, I found the following records reflecting SUNDBERG's connection to CMI

and Renfrow: CMI Invitation System Introduction for conference calls for use by any CMI

Master Syndication member. A flyer for Concept Marketing International, Top 10, the Ultimate

Financial Information (with a quote from R. Renfrow "After attending this seminar, financial

security is no longer my Goal, it's my Destiny."). A CMI Flyer titled the Ultimate Benefit Plan

which includes the company history. Part of the history states, "Due to unique financial

opportunities and information opened to its Founder Executive Trustee and National Trust

Counselor, Mr. James E. Aldridge, Jr., CM! has since evolved into a financial education firm,

teaching families how to live, work and playas the privileged few have for generations."

I also located tax related documents during the search of 26 King Court, including two

envelopes from Chiorini, Hunt and Jacobs Business cOllSultants/CP As. Each envelope contained

an invoice; the first was dated 10-31-08 for Sound Mountain Investments, LLC at 870 Sunset Dr.

San Carlos, CA. and the second was dated 10-31-08 for Seth Sundberg 870 Sunset Dr., San

Carlos, CA. I found two additional invoices dated 11-21-08 from Chiorini, Hunt and Jacobs to

Sound Mountain Investments LLC and to Seth Sundberg at 870 Sunset Dr., San Carlos, CA, as

well as a flyer for Tax Forms Helper 2008 (tax-preparation software); correspondence from the

Department of Treasury to Sundberg Family Foundation, clo Seth Sundberg TTEE 870 Sunset

Dr., San Carlos, CA; blank forms 1099-MISC for 2008; and a past due notice from the IRS for

tax period July 31, 2006 dated October 29,2007.

I also found records reflecting a "bill to" address of 870 Sunset Drive, San Carlos, CA

and a "ship to" address of 26 King Ct., San Mateo, CA for Seth Sundberg. This shows that

SUNDBERG receives mail at both addresses, and transfers mail from one location to another.

Interview Determines that 870 Sunset is the residence of SUNDBERG's mother. RO

Enjalran visited the residence at 870 Sunset Drive on July 30, 2009, where he spoke to Leslie

Affidavit of Special Agent Quyen Madrigal, lRS-Cl In Support of an Arrest and Search Warrant Application

Page 19 of26


Maynard, SUNDBERG'S mother. Mrs. Maynard told RO Enjalran that she accepts mail at her

residence for SUNDBERG.

Surveillance Further Establishes SUNDBERG's Use of Search Locations

Three surveillances were conducted on SUNDBERG from his residence address at 26

King Ct., San Mateo, CA to various locations including his business, 1660 S. Amphlett Blvd.

#308, San Mateo, CA. The surveillances showed that SUNDBERG carries a laptop bag and

other documents from his residence, into his vehicle, and to his business. The pattern observed

during the surveillance indicates that SUNDBERG maintains documents at his residence, in his

vehicle, and at his business. Surveillance on August 18, 2009 also showed that SUNDBERG

posted a notice on the front door of his residence warning trespassers that "Public/Corporate

Officials and their Agents, Employees or franchises thereof abide by the provisions of the

Supreme Law of the Land: ... " and that the owner of the property under U.S.C. Title 18,33109

may "use force to remove those who trespass." In addition, the note states "violators may be

fined not more than $10,000.00 imprisoned not more than ten years or both, and life if death

results. U.S.C. Title 18, Section 241 & 242."

August 18, 2009: Surveillance on SUNDBERG showed he left his residence at

approximately 8:01 AM with what appeared to be a black laptop bag and other items. He

entered his Lincoln SUV #5CRK074 and proceeded to a local Starbucks and then to his business

located at 1660 S. Amphlett Blvd. where he parked. He exited the vehicle with the same laptop

bag and went into Suite 308. Inside the office #308, IRS CI Special Agent Mike Hammond

observed piles offolders inside the office. SUNDBERG flagged down a Shred-It company male

employee at 8:25 AM who went to #308 with SUNDBERG and assisted him with bringing

several blue bags down to the Shred-It truck where the documents in the bags were shredded. At

8:50 AM, all the blue bags were empty and SUNDBERG paid the Shred-It employee. He

received a receipt and went to his vehicle and retrieved items from the car. At 11 :33 AM

SUNDBERG had gone to a nearby cafe and proceeded to move his vehicle onto a back street.

He exited the vehicle with a binder and documents and went back into 1660 S. Amphlett #308.

At 11 :49 AM, he went back to his vehicle and retrieved manila folders with papers and placed

those documents into his laptop bag and went back into the building. At 11 :57 he went back to

his vehicle with the laptop bag and paperwork. SUNDBERG later ran various errands in his


Page 20 of26


vehicle taking documents with him. At 1 :05 PM he returned to 26 King Ct. and at 2:00 PM he

went into the residence with documents and a binder.

August 19, 2009: SUNDBERG was seen leaving his residence, 26 King Ct., San Mateo,

CA with a laptop bag and dark colored portfolio with documents visible he entered into his

vehicle. He left the house at 10:22 AM and went to 1660 S. Amphlett Blvd., #308 in San Mateo,

CA. He entered #308 with his bag. At 10:40 AM, SUNDBERG returned to his vehicle with the

laptop bag and proceeded to a Kinko's store in San Mateo where he was observed with a binder

and documents. He used the computer to browse public storage facilities and craigslist

apartments on the Internet.

August 26, 2009: SUNDBERG left his residence with his laptop bag and four bankers'

boxes that he put into his vehicle. He made various stops before he arrived at Homestead Suites

in Foster City. He entered the hotel room with two bankers' boxes for approximately five

'minutes. He then left with the. two boxes and re-entered his vehicle. He later went to Homestead

Suites in San Carlos with two banker's boxes and left the boxes in room 127. SUNDBERG later

went to Staples in Foster City and purchased a Road Atlas. After this purchase, he proceeded to

his business, 1660 S. Amphlett Rd. #308, San Mateo, CA with his laptop bag and black portfolio.

The two other bankers boxes remained in his vehicle.

Internet Research Confirms SUNDBERG's Connection to Locations to be Searched

Internet research reveals that SUNDBERG uses his business address for marketing

himself as an associate of CMI and therefore records related to tax fraud schemes may be stored

at his business. It also indicates that he uses the computer to conduct business and therefore

electronic evidence related to tax fraud schemes may be stored on his computer or laptop.

• A Google link -CivilOrder to Show Cause ... Seth Sundberg name change to Franco

Metcalf.

• An Internet page: http://www.plaxo.comldirectory/profile... For SUNDBERG. The

page shows SUNDBERG'S photograph as a representative for Concept Marketing

InternationaL The contact information is as follows:

Email: sethsundberg@sbcglobaLnet for work and home

Phone numbers: 650-670-7861 and 650-655-4655

Address: 1660 S. Amphlett Blvd. #308, San Mateo, CA


Page 21 of26


• A "linkedin" profile which lists that he was a "CSA" at Concept Marketing International

and a Branch Manager at Access Mortgage and Financial

• The Access Mortgage and Financial Website states that SUNDBERG is the branch

manager and one of the original founders of Access Mortgage and Financial. The contact

information is: 1660 South Amphlett Blvd., Suite 308 San Mateo, CA and lists the phone

number as 650-655-4653.

SEARCH OF DIGITAL MEDIA IN GENERAL

Based on my experience in investigating fraudulent online/electronic refund schemes, I

know that computers are used extensively. In particular, they are commonly used to 1) produce

electronic versions of Income Tax Returns; 2) transmit those returns to third parties for

submission to the IRS; and 3) maintain copies or records of both the returns and the

transmission/submission thereof.

Knowing the above, the affiant consulted with IRS Criminal Investigation Special Agent

and SSA-Computer Investigative Specialist (CIS) Jeff Jack regarding the seizure of computers

and aspects of properly retrieving and analyzing electronically stored computer data. Special

Agent Jack has been employed with IRS Cl for seventeen years. In addition to attending training

in financial investigation techniques and accounting, he has also attended the IRS CI Seized

Computer Evidence Recovery School (BCERT) at the Federal Law Enforcement Training Center

in Glynco, Georgia, where he learned about the operation of computer systems and the correct

procedures for seizure and analysis of computer systems. During the past seventeen years,

Special Agent Jack has participated in over one hundred search warrants and consent searches

during which he has participated in the seizure or imaging of over one hundred computers.

Special Agent Jack has been responsible for analyzing seized electronic data and records from

over one hundred computers including those seized pursuant to the search warrants/consent

searches.

Based on his knowledge, training, and experience, Special Agent Jack has advised me

that properly retrieving and analyzing all electronic stored (computer) data, document and

authenticating such data, and preventing the loss of data either from accidental or deliberate

programmed destruction, requires on site and laboratory analysis by a qualified computer

specialist. To effect such accuracy and completeness may require the seizure of all computer

equipment and peripherals which may be interdependent, the software to operate the computer


Page 22 of26


system, data security devices (including passwords and decryption keys), and related instruction,

manuals which contain directions concerning the operation of the computer system and software

programs. This is because the peripheral devices, which allow users to enter or retrieve data from

storage devices, vary widely in their compatibility with other hardware and software. Many

system storage devices require particular input/output devices in order to read the data on the

system. It may be important that the computer system be re configurable to accurately retrieve

the evidence on crime.

Searching computer systems is a highly technical process, which reqUires specific

expertise and specialized equipment. There are so many types of computer hardware and

software in use today that it is impossible to bring to the search site all of the necessary technical

manuals and specialized equipment necessary to conduct a thorough search. In addition, it may

also be necessary to consult with computer personnel who have specific expertise in the type of

computer, software application, or operating system that is being searched.

Searching computer systems requires the use of precise, scientific procedures which are

designed to maintain the integrity of the evidence and to recover "hidden", erased, compressed,

encrypted, or password protected data. Computer hardware and storage devices may contain

"booby traps" that destroy or alter data if certain procedures are not scrupulously followed.

Since computer data is particularly vulnerable to inadvertent or intentional modification or

destruction, a controlled environment, such as a law enforcement laboratory, is essential to

conducting a complete and accurate analysis of the equipment and storage devices from which

the data will be extracted.

The volume of data stored on many computer systems and storage devices will typically

be so large that it will be highly impractical to search for data during the execution of the

physical search of the premises. A single megabyte of storage space is the equivalent of 500

double spaced pages of text. A single gigabyte of storage space, or 1,000 megabytes, is the

equivalent of 500,000 double spaced pages of text. Storage devices capable of storing fifteen

gigabytes of data are now commonplace in desktop computers. Consequently, each non

networked, desktop computer found during a search can easily contain the equivalent of 7.5

million pages of data, which, printed out, would completely fill a 10' x 12' x 10' room to the

ceiling.

Affidavit of Special Agent Quyen Madrigal, IRS-Cl In Support of an Arrest and Search Warrant Application

Page 23 of26


Computer users can attempt to conceal data within computer equipment and storage

devices through a number of methods, including the use of innocuous or misleading file names

and extensions. For example, files with the extension 'Jpg" often are image files; however, a

user can easily change the extension to ".txt" to conceal the image and make it appear that the

file contains text. Computer users can also attempt to conceal data by using encryption, which

means that a password or device, such as a "dongle" or "keycard", is necessary to decrypt the

data into readable form. In addition, computer users can conceal data within another seemingly

unrelated and innocuous file in a process called "steganography." For example, by using

steganography a computer user can conceal text in an image file, which cannot be viewed when

the image file is opened. Therefore, a substantial amount of time is necessary to extract and sort

through data that is concealed or encrypted to determine whether it is evidence, contraband, or

instrumentalities of a crime.

SEARCH OF DIGITAL MEDIA IN LIGHT OF LAST WEEK'S

NINTH CIRCUIT RULING IN CDT

On August 26, 2009, the Ninth Circuit Court of Appeals issued an en banc opinion in

United States v. Comprehensive Drug Testing Inc. ("CDT''). That decision has called into

question the established computer search protocols in this circuit and replaced them with

guidance that is still being digested. CIS Jack has advised me that he "has no idea" how the

CDT opinion is ultimately going to affect the computer searches he conducts, and David

Callaway, the Assistant United States Attorney assisting me with the preparation of this affidavit,

has advised me that his office is still reviewing the opinion and determining how to respond.

As the investigating case agent, I can only state my view that there is probable cause to

believe that evidence of the federal criminal violations described in this affidavit are located on

SUNDBERG's computers: both the laptop computer I have personally seen him carrying around,

as well as on any desktop computers that may be located at his business or residence at 26 King

Court, in San Mateo.

In view of the current uncertainty regarding computer searches and seizures, I therefore

seek this Court's authority, for the moment, to do only the following: to permit IRS forensic

computer examiners to image SUNDBERG's laptop computer, as well as any desktop computers

found at the business (Attachment A-3) and SUNDBERG's residence (Attachment A-I), such

imaging to be conducted onsite, if that course is determined to be practicable by CIS Jack or,


Page 24 of26


alternatively, within ten days if CIS Jack determines that such imaging cannot, with due

diligence, be accomplished on the date the search warrants are executed.

As set forth in Attachment C, no search of any seized computer, or of its imaged copy,

will be conducted under the authority of this search warrant. Rather, the evidence contained on

the seized computers will be preserved, but not searched unless and until a further warrant, with

specific protocols consistent with the Ninth Circuit's guidance in CDT, is obtained from this

Court. I would respectfully submit that this procedure, for purposes of Fourth Amendment

analysis, is the functional equivalent of the accepted practice of "freezing" a location while a

search warrant is obtained.

REQUEST FOR SEALING

As this investigation is continuing, disclosure of the arrest warrants, search warrants,

seizure warrants, this affidavit, or this application and the attachments thereto could jeopardize

the progress of the investigation. Such disclosure would give the subject an opportunity to cease

his criminal activities, destroy evidence, notify confederates, flee, or otherwise interfere with the

investigation. Accordingly, I request that the Court issue an order that the arrest and search

warrants, this affidavit, the application for search warrant, and all attachments thereto be filed

under seal until further order of this Court.

CONCLUSION

Based on the facts stated above, my experience and training, and consultation with other

IRS employees, I respectfully submit that there exists probable cause to believe that

SUNDBERG has committed violations of 26 U.S.C. § 7206(1) and 18 U.S.C. § 287, and that

evidence, fruits, and instrumentalities of those violations, as more specifically described in

Attachment B, will be located at each of the locations set forth in Attachments A-I through A-S.

Digital evidence shall be handled only in accordance with Attachment C. All of the attachments

are incorporated fully here by this reference.

In addition, based on the foregoing facts, including that SUNDBERG has recently

acquired an alias ("Franco Metcalf') and, to the best of my knowledge, still has in his possession

over one million dollars in fraudulently-obtained, unendorsed cashier's checks payable to

himself, I further request that a "No Bail" warrant be issued for his immediate arrest.

II


Page 25 0[26


The above information is true and correct to the best of my knowledge, information, and

belief.

Sworn to and subscribed to before me

this \.5 1:" day of ~br ,2009,

at San Jose, California.

United States Magistrate Judge


Q~ Special Agent, IRS-CI

Page 26 of26


RESTRICTED APPEARANCE OF Seth-Cameron; Sundberg, Per Per 3RD PARTY INTERVENER 870 Sunset Drive San Carlos, California 94044

FilE D DEC 3 1 2009

RICHARD W. WIEKING CLERK, U.S DISTfill~tOllNTERVENE;

NORTHERN DISTRICT[eo~tfiJTIONAL QUESTION] ORDER AND CERTIFICATE OF SEVICE

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION 280 SOUTH 1ST STREET, SAN JOSE, CALIFORNIA 95113

UNITED STATES OF AMERICA, ADMIRALTY ACTION

Plaintiff, IN REM VS.

SETH CAMERON SUNDBERG, 26 USC 7206(1), 26 USC 7201, 18 USC 287

AND Defendant, IN RE:

MOTION TO INTERVENE [Constitutional Question]

Seth-Cameron; Sundberg, Pro Per,

3rd Party Intervener, CASE NO: CR09-00928JF

MOTION TO DISMISS

AND NOW, comes the Movant and 3rd Party Intervener, Seth-Cameron; Sundberg, the

living man, created in the image of God, my Creator; a sovereign national on the land,

making a restricted appearance, within the organic law and organic geographic boundaries

of the Confederacy of the united States of America; in honor and at arm's length and clean

hands, as the secured party; holder-in-due-course and the only authorized signatory for the

defendant, SETH CAMERON SUNDBERG, the grantor and beneficiary of the expressed

Trust; having a home Port of residence located at: 870 Sunset Drive, San Carlos, San Mateo

County, California.

1


WHEREFORE THE 3RD PARTY INTEVENER: hereby Moves this District

to permit his intervention in the above captioned criminal suit, regarding a

Constitutional Question, which declares the principle of [NO LAW = NO REMEDY].

The defendants' only hope for a remedy is to bring these facts into the courtroom and have

the court either confirm this claim or dismiss the action and redeem the injured parties ...

TO WIT:

28 USC> PART VI> CHAPTER 161> § 2403; Intervention by the United States or a State [Constitutional Question].

fa] In any action, suit or proceeding in a court of the United States to which the United States or any agency, officer or employee thereofis not a party, wherein the constitutionality of any Act of Congress affecting the public interest is drawn in question, the Court shall certify such fact to the Attorney General, and shall permit the United States to intervene for presentation of evidence, if evidence is otherwise admissible in the case, andfor argument on the question of constitutionality. The United States shall, subject to the applicable provisions of law, have all the rights of a party and be subject to all liabilities of a party as to court costs to the extent necessary for a proper presentation of the facts and law relating to the question of constitutionality.

fb] In any action, suit, or proceeding in a court of the United States to which a State or any agency, officer, or employee thereof is not a party, wherein the constitutionality of any statute of that State affecting the public interest is drawn in question, the court shall certify such fact to the attorney general of the State, and shall permit the State to intervene for presentation of evidence, if evidence is otherwise admissible in the case, andfor argument on the question of constitutionality. The State shall, subject to the applicable provisions of law, have all rights of a party and be subject to all liabilities of a party as to court costs to the extent necessary for a proper presentation of the facts and law relating to the question of constitutionality.

IV. PARTIES> F.R.C.P. Rule 24. Intervention.

(a) Intervention of Right.

Upon timely application anyone shall be permitted to intervene in an action: (1) when a statute of the United States confers an unconditional right to intervene; or (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a

2


practical matter impair or impede the applicant's ability to protect that interest, uni'ess: the applicant's interest is adequately represented by existing parties.

(b) Permissive Intervention.

Upon timely application anyone may be permitted to intervene in an action:

(I) When a statute of the United States confers a conditional right to intervene; or

(2) When an applicant's claim or defense and the main action have a question of law or fact in common. When a party to an action relies for ground of claim or defense upon any statute or executive order administered by afederal or state governmental officer or agency or upon any regulation, order, requirement, or agreement issued or made pursuant to the statute or executive order, the officer or agency upon timely application may be permitted to intervene in the action. In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.

(c) Procedure.

A person desiring to intervene shall serve a motion to intervene upon the parties as provided in Rule 5. The motion shall state the grounds therefore and shall be accompanied by a pleading setting forth the claim or defense for which intervention is sought ...

MOVANT RESPECTFULLY REPRESENTS THAT:

1] Ever since George Washington overthrew the first civilian government of America

under the Articles of Confederation, which had been ratified on November 15, 1777 by

the first Continental Congress; George subsequently installed the defacto corporate

military government, which remains in place today. Evidence of that military

government is openly reflected in the Titles assigned to high offices [e.g.] Commander

in Chief; Attorney General; Surgeon General; Auditor General; Postmaster General,

etc. Evidence of the incorporated government is defined under USC Title 5 and in the

Clearfield Doctrine rendered by the US Supreme Court in 1943.

USC Title 5> Chapter 1> Section 103.

For the Purpose of this title-

3


(1) "Government corporation" means a corporation owned or controlled by the Government of the of the United States; and

(2) "Government controlled corporation" does not include a corporation owned by the Government of the United States.

The Clea1jield Doctrine:

"that when governments descend to the level of a mere corporation and takes on the characteristics of a private citizen,for the purposes of suit, such corporations and individuals are regarded as 'private entities' entirely separate from government." [The Clearfield Trust v. The United States, 318 U.S. 363-37 (1943) U.S. Supreme Court ... ]

2] America is under the jurisdiction of a corporate military authority, administered by a

civil authority with its courts calling the shots. Peace was never declared after the Civil

War and we are still operating under the War Powers Act! The Organic Constitution of

1787 was never ratified [adopted] by the federal government and was secretly rewritten

in 1865, without the consent of the public or a constitutional convention. The Declaration

of Independence; the Articles of Confederation and the Constitutions' of each of the

government controlled incorporated States, have been suspended without the knowledge or

consent of the public. Still, this federal government continues to express that we are a

nation governed by law and protected by a Constitution!

3] Every State and there Courts are under the control ofthe federal government. Evidence

of such control is referenced under USC Title 5, Chapter 1, Section 103 (2) and can easily

be verified by opening the Codes of any State government on a computer search bar. Once

the glossary appears for the Codes, under search, type in the words, "District of Columbia"

and hit enter. These words are repeated over 1000 times. Everything in the Codes connects

to the federal government.

4


4] Absent a root in the Organic Law of America, the government of America is deJtacto ~

and every law created by this government is defacto as well. Those Organic Laws are: a]

The Declaration of Independence of July 4, 1776; b] The Articles of Confederation of

November 15, 1777; c] The Constitution of the United States of America of September

17, 1787 and d] The Northwest Ordinance of April 23, 1784 and July 13, 1787. These

Laws are still in tact and have never been repealed. The Organic Laws of America remove

all authority, power, venue and jurisdiction of these governments over or against the

American public, except by lawful contract. A lawful contract that doesn't exist! The

organic law places no burden upon the living man and prohibits the enforcement of written

law by any government against the inhabitants of America.

5] A lawful contract heretoforementioned, must comply with the Law of Contracts however

"Mutality" eliminates any contractual relationship alleged between the public and the

government. Absent the requirement of Mutality, all such contracts are unconscionable.

6] The Defendant, SETH CAMERON SUNDBERG, is being treated as a corporate fiction,

owned by the government. This deception was instituted by a forced registration of births

and issue of birth certificates. These certificates were recorded under the Department of

Transportation as government owned Vessels and then converted into International

Securities and marketed as investment funds. The proceeds of the sale of these Securities

was deposited into a "Foreign Sidus Trust" in the name of the registered birth applicant. The

purpose for doing this was to create an [indefeasible defense] in the event of the arrest and

prosecution of these government representatives for Treason.

5


7] The establishment of the Social Security Administration was just another govelnnlerl~

ploy to capitalize upon the good faith, credit and sweat equity of the American public.

applications for admission into the Social Security Administration were converted into

Bearer Certificates, assigned a CUSIP# and marketed as a govermnent investment mutual

fund through Fidelity Mutual Insurance Company. The proceeds of this investment is

deposited into a "cestui que trust" under the name of the applicant.

8] This govermnent has never come out and made a statement of fact that America is a

defacto nation, with defacto courts and defacto Judges sitting under the Rule of Necessity

and that we Americans have No Remedy in the Courts. For every law written there

must be a remedy provided, and absent that Remedy there can be no Law!

9] Every written law created by this defacto govermnent, by their own Rules, F.R.C.P.

17(a), is suppose to be certified by the Supreme Court as constitutional before it can be

implemented. A Grand Jury cannot certify the constitutionality of any law because it is

beyond their educational comprehension and ability. Obviously, no written law of a

defacto nation can be certified constitutional when such laws are not rooted in the Organic

Constitution or compliant with the other Organic Laws of America!

10] If these defacto govermnents believe they are operating under International Law,

they require three things to be a nation under that status: a] dejure money;

b] dejure law, and a

c] dejure military.

America has none ofthese in operation and the defendants' only hope for a remedy is to

6


bring these facts into the courtroom and have the court either confirm this claim or dismlss\:

the action and upon a dismissal, redeem the injured parties for damages.

"Nothing can be more material to the obligation than the means of enforcement. Absent the remedy, the contract may, indeed, in the sense of the law, be said not to exist, and its obligation to fall within the class of those moral and social duties, which depend for their fulfillment wholly upon the will of the individual. The ideas of validity and remedy are inseparable, and both are parts of the obligation, which is guaranteed by the Constitution against invasion. The obligation of a contract is the law which binds the parties to petform their agreement. " [Von Hoffman v. City of Quincy, 4 Wall 535, 552.] [Red Cross Line v. Atlantic Fruit Company. No. 112, Supreme Court of the United States, 264 US 109,68 L. Ed. 582, 44 S.Ct. 274 February 18, 1924].

llieHb-o:- z$2 2tt'( date •

IJ,mitted by:

!!~~:~s~u~n~dreb;er~g~"}'~~" 3rd Party Intervener and the only

authorized signatory for SETH CAMERON SUNDBERG

[Grantor and Beneficiary of the expressed Trust]

7


UNITED STATES OF AMERICA,

Plaintiff, VS.

SETH CAMERON SUNDBERG,

Defendant, SS. AND

Seth-Cameron; Sundberg, Pro Per,

3rd Party Intervener,

JURAT

I, Seth-Cameron; Sundberg, Pro per, the Movant and 3rd Party Intervener, hereby

affirms upon his unlimited credit and liability that the contents of this Motion is

true and correct to the best of his information, knowif

Sworn to and sub~cribed ,before me this j1<,1b day of ~ , 2009, at ~?T f(JL() Alae in -5M'\. ~ County, CA.

~~~~"'tT<4 .U./ un Pro per By: --:--L..-'<

3rd Party Intervener and the only authorized signatory for

SETH CAMERON SUNDBERG [Grantor and Beneficiary of the expressed Trust]

"\

~Q;r~T~ California Notary Public

l ~ SARA E. HALLER ( _ COMM.# 1747781 III /". NOTARY PUBLIC-CALIFORNIA _ UI CoutnY OF SAN M.AJEO ,.I; 1. .; My CO~!.\. Exp. MAY 28, 201:.;

License No: ,-:) .. J..tt1-i?> I My Commission Exp: .).\."-"-\ 2E j "lJ; /1

8


Seth-Cameron; Sundberg 870 Sunset Drive

San Carlos, California 94044

December 28, 2009

Clerk of Courts United States District Court Northern District of California 800 North Humboldt Street San Mateo, California 94401

In Re: United States vs. Seth-Cameron; Sundberg, [i.e.] Federal Case No. CR09-00928JF,

[Motion to Intervene]

PRECIPE

1. The attached Petition is a MOTION TO INTERVENE with ORDER, regarding the above referenced Case. One additional copy is provided for the Clerk's files.

2. You are to record this document into the case file and present the Motion and Order to Judge Fogel, to schedule a hearing and signature.

3. Movant shall serve the Plaintiff with a complete copy of this Motion and submit a Certificate of Service for the case file.

4. Timing is essential in this matter and therefore upon receipt of the signed Order, you are to contact the Movant to pickup the Order to serve on the Plaintiff. The Movant will submit a Certificate of Service for the case file.

5. Lastly, you are to file this matter for the Judge.

CC: file : U.S. District Court

12

date, courtroom and

l

seth sundberg 1099 oid indictment, complaint, motion to dismiss

Documents