A Dutchess County woman employed tactics used by an extremist anti-government movement to cheat the Internal Revenue Service out of nearly $500,000, federal prosecutors said Tuesday.
Melanie Ferreira, 60, of Lagrangeville, was charged in federal court in White Plains on Tuesday with tax and bank fraud for running what federal prosecutors call an electronic funds transfer scam, a commonly used financial tactic of the Sovereign Citizens Movement.
The members of the Sovereign Citizens Movement believe they are not beholden to U.S. law or courts, including taxation and driver's license requirements, according to the FBI.
In 2011, the FBI's Counterterrorism Analysis Section labeled the movement "a growing domestic threat to law enforcement."
"A closer look at sovereign citizens' more severe crimes, from financial scams to impersonating or threatening law enforcement officials, gives reason for concern," FBI counterterrorism analysts wrote in a bulletin on the movement. "If someone challenges (e.g., a standard traffic stop for false license plates) their ideology, the behavior of these sovereign-citizen extremists quickly can escalate to violence."
There are about 100,000 loosely affiliated members of the Sovereign Citizens Movement in the nation, according to the Southern Poverty Law Center. Members of the movement have killed six law enforcement officers since 2000, the FBI said.
Ferreira's case is being handled by the U.S. Attorney's Terrorism and International Narcotics Unit, with Assistant U.S. Attorney Jason P.W. Halperin leading the prosecution.
Ferreira's hearing in federal court Tuesday took 2 1/2 hours in part because she refused to be represented by court-appointed lawyers from the Federal Defender's Office and insisted on representing herself, federal authorities said.
"Melanie Ferreira thumbed her nose at the IRS, stealing hundreds of thousands of dollars in refunds to which she was not entitled, and forged a check to satisfy a debt," U.S. Attorney Preet Bharara said. "We enjoy many rights and privileges in this country, but not among them is the right to enjoy the fruits of law-abiding taxpayers' money while evading the tax laws and defrauding the government and thereby your fellow citizens."
A phone number listed for Ferreira was disconnected Tuesday afternoon.
Ferreira filed a false federal tax return in 2008, FBI and IRS agents said, in which she claimed to have earned $661,600 in interest from three banks. She falsely claimed on the tax return filing that she had paid $661,536 in federal taxes in 2008. On that basis, the IRS paid her a refund of a $440,924.
Ferreira actually earned only $17 in bank interest and paid $236 in taxes, the FBI said.
In addition to the tax fraud, Ferreira also cheated Bank of America out of hundreds of thousands of dollars, prosecutors contend.
In May 2010, she sent Bank of America a forged cashier's check purported to be drawn on the Federal Reserve Bank of Cleveland for $316,966.05 in an attempt to pay off her mortgage, according to a criminal complaint filed by FBI Special Agent Anthony Rausa.
The following month, she sent the bank a check for $305,000 drawn on a closed bank account in another attempt to pay off her mortgage, Rausa wrote. On the memo line of the check, Ferreira wrote in red ink, "For discharge of debt (electronic funds transfer) only." On the back of the check, she jotted: "Not for deposit, EFT only, for discharge of debt."
Ferreira faces up to 20 years in prison if convicted.