Mar 28, 2016


Bill Morlin
March 21, 2016

Winston Shrout
Winston Shrout

​The Justice Department's Tax Division has obtained a multiple count tax-fraud indictment against an Oregon antigovernment "sovereign citizen" considered a national ringleader possibly responsible for $100 trillion in fraudulent financial instruments.

Winston Shrout made his living teaching others how to defraud financial institutions and the United States by using fictitious instruments, federal prosecutors allege. He now faces 13 counts of making, presenting and transmitting fictitious financial instruments and six counts of willfully failing to file income tax returns.

Formerly of Santa Clara, Utah, Shrout, 68, moved to Hillsdale, Ore., a few years ago where he continued operating his "Solutions in Commerce" tax-avoidance scheme, largely over the Internet and at various seminars.

"I have to admit…there are a couple of important life concepts that took me awhile to understand," Shrout writes on his website, boldly pitched a scheme that federal authorities say is riddled with fraud.

Six years ago, SPLC identified Shrout as one of the 12 most-prominent leaders in the sovereign citizens movement, prone to pitching phony, illegal and sometimes nonsensical schemes to avoid taxes, eliminate debts and extract money from the government.

The federal indictment alleges that from February 2008 and continuing through at least June 2015, Shrout "devised and participated in a scheme to defraud financial institutions and the United States out of monies by making, presenting and transmitting fictitious financial instruments, which he variously called, among other things, "International Bills of Exchange" and "Non-Negotiable Bills of Exchange."

"Shrout claimed that these fictitious financial instruments had monetary value when he knew they were in fact worthless," the indictment says.

During the course of his scheme, Shrout produced and issued more than 300 fictitious financial instruments, purported to be worth more than $100 trillion, on his own behalf and for credit to third parties, said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department's Tax Division.

Shrout is alleged to have sold recordings of his seminars, templates for fictitious financial instruments, and other materials through his website. He attempted to convince people that the fictitious financial instruments could be used to pay off debts, including federal income taxes.

The indictment alleges Shrout "willfully failed to file" tax returns on income he received between 2009 and 2014 various sources, including presentations at seminars and licensing fees associated with the sale of Winston Shrout Solutions in Commerce products.

If convicted, Shrout faces a statutory maximum sentence of 25 years in prison on each of the fictitious financial instrument counts and one year in prison for each count of willful failure to file income tax returns.

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