A federal jury Friday returned across-the-board guilty verdicts against Winston Shrout, a prominent ‘sovereign citizen’ charged with 13 counts of issuing fake financial documents to banks and the U.S. Treasury and six counts of willful failure to file tax returns from 2009 to 2014.
The jury foreman stood and read each guilty verdict for each of the 19 counts as Shrout watched from his seat at the defense table. Shrout displayed no expression.
He will be sentenced at 11 a.m. on Aug. 1. (2017)
U.S. District Judge Robert E. Jones polled each of the jurors to ensure the 12-member panel was unanimous in its findings. As the jury foreman began reading each of the verdicts, one juror teared up. A fellow juror reached out to hold her hand as the rest of the verdicts were announced.
The judge ordered Shrout to turn over his passport and restricted him from any travel outside of Oregon without prior court permission.
The jury deliberated for about five hours over two days following a three-day trial.
Government lawyers argued Shrout aimed to cheat the Treasury and banks, and preached his illegal schemes to hundreds of others in paid seminars across the country and abroad.
He purposely sent a package of 1,000 homemade International Bills of Exchange, each purporting to be a legal tender for a trillion dollars, to a small community bank in Chicago “hoping to slip one by an unsuspecting banker,” U.S. Tax Division trial lawyer Scott Wexler told jurors.
Investigators found a copy of the U.S. Tax Code and the U.S. Department of Justice’s criminal tax manual on Shrout’s laptop computer, seized one night in the parking lot of The Grotto in Portland after he concluded a seminar there. The computer also contained an alert from the Office of the Comptroller of the Currency, cautioning banks and federal savings institutions to be on the lookout for the circulation of such fictitious financial documents, Wexler said.
Shrout was driven by “simple greed,” Wexler told jurors during his closing argument. He earned a total of $562,224 from a carpentry pension, plus royalties and payments for his seminars, between 2009 and 2014, the years he failed to file tax returns, the prosecutor said.
“He intended to get and keep as much money as he could,” Wexler said. “The defendant knew he didn’t have legal authority to print legal tender of the United States from his home computer… The defendant didn’t file his tax returns because he didn’t want to.”
The 69-year-old took the stand in his own defense, claiming he was given authority to make the financial documents from the Office of International Treasury Control in order to help relieve debts from mortgage foreclosures. The office Shrout cited, though, is considered by the U.S. government a fraudulent organization that claims ties to the United Nations and the Federal Reserve.
His standby lawyer Ruben Iniguez stressed that “not a single penny was paid out or transacted by anyone” as a result of the 13 fictitious documents Shrout sent. He argued that the government was simply out to “muzzle” his client.
Shrout also testified that he hadn’t paid taxes for about 20 years, joining what he estimated are about 65 million other people in what he called “tax avoidance.” Iniguez, in his closing argument, argued that Shrout held a firm and sincere belief that he didn’t have to pay taxes.
Shrout declined comment after the verdicts were announced.
Making, creating and issuing fictitious financial instruments is a felony. Each count could bring up to 25 years in prison, according to prosecutors. The failure to file tax returns is a misdemeanor punishable by up to one year in prison.
— Maxine Bernstein