Government Grants to Pay off Personal Debt by arj82890

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									KARIN J. IMMERGUT, OSB #96314
United States Attorney
District of Oregon
Assistant United States Attorney
405 East 8th Avenue, Suite 2400
Eugene, Oregon 97401
(541) 465-6771


                           FOR THE DISTRICT OF OREGON

UNITED STATES OF AMERICA,           )               CR 05-30047-PA
                        Plaintiff,  )               GOVERNMENT’S WITNESS LIST
             v.                     )
BARTON ALBERT BUHTZ,                )
RICHARD ROY AQUILA, and             )
STEVEN DALE KELTON,                 )
                        Defendants. )

      The United States of America, by William E. Fitzgerald, Assistant United States

Attorney, hereby submits its list of nonexpert witnesses. The United States reserves

the right to call any or all of the persons identified on this list and requests leave of the


Court to modify the list, as necessary.

      DATED this 5th day of September, 2007.

                                          Respectfully submitted,

                                          KARIN J. IMMERGUT
                                          United States Attorney

                                          /s/ William E. Fitzgerald
                                          WILLIAM E. FITZGERALD
                                          Assistant United States Attorney

1. Nelda Bischoff:

      A. Occupation: Nelda Bischoff’s occupation is unknown at this time.

      B. Anticipated Testimony: In approximately June 2001, Nelda Bischoff, then

a resident of Crescent City, California, sought help from Steve Shollenburg regarding

her consumer credit debt load. She traveled to the Shollenburg home in Medford,

Oregon. Steven Shollenburg talked to her about setting up a trust and joining the

American Freedom Foundation for $500. Bischoff met Rebecca Shollenburg while

visiting their home. Through her meetings with Steve Shollenburg, she became aware

of personal trust accounts of the United States government which could be used to

discharge debts. Bischoff had recently obtained a $250,000 home equity loan on her

Crescent City property. When Steve Shollenburg learned about Bischoff's home

equity loan, he proposed that she take out all the money, give him half and he would

do the paperwork to pay off the balance of the loan through the trust account. Bischoff

told her friend, Vicki Clifford, about Shollenburg’s proposal and the two took a trip to

the Shollenburg home in Medford, Oregon. There, Shollenburg told Bischoff that the

more debt you have the better because it would all be paid through the personal trust

account at the Department of Treasury for every live birth. Bischoff was convinced by

Shollenburg's presentation and she followed his advice to obtain another home equity

loan against her Grants Pass home. She took out cash from the refinancing and used it

to make other purchases. In late 2001, the Shollenburgs moved to California and

Bischoff could not contact them.

      Steven Shollenburg had told Bischoff that his two mentors were Barton Buhtz

and Sam Davis. In May 2002, Clifford and Bischoff visited Buhtz at his home in

Sunland, CA and they each gave Buhtz $200 cash. Buhtz gave them advice regarding

the Redemption process. Buhtz used his home computer to create Bills of Exchange

for them. He gave Bischoff a $222,000 Bill of Exchange and gave Clifford a $20,362

bill of exchange to pay off credit card debt. The bills were dated May 29, 2002. In

June 2002, Bischoff used her own home computer to create a $247,000 Bill of

Exchange to pay off her Grants Pass home equity loan. Bischoff and Clifford then

started receiving calls from banks advising them that the Bills were not going to be

processed, that the banks had learned from the Treasury that the Bills were

nonnegotiable. Bischoff called Buhtz about the banks dishonoring the Bills of

Exchange. Buhtz advised that the banks were wrong and that they must have talked to

the wrong person at Treasury. Bischoff and Clifford asked Buhtz if they could put the

bills on check paper. Buhtz said that was a “good idea” and told them that he wanted

to see a draft of a bill in check format before they used it. Bischoff and Clifford

created one and Buhtz provided a Dept of Treasury routing number and told them the

order to place the numbers on the bottom of the check. Buhtz approved the check

format after some editing. He added the words “Void where prohibited by law.”

      Bischoff and Clifford visited a lawyer named John Brownlee in Portland.

Brownlee told them that the Bills of Exchange were a scam and were fraudulent.

Bischoff and Clifford wrote letters to the banks and creditors and told them that they

had been victims of the scam and that the Bills were worthless. On September 27,

2002, Bischoff and Clifford participated in an FBI-monitored phone call with Buhtz.

2. Vicki Clifford:

      A. Occupation: Vicki Clifford’s occupation is unknown at this time.

      B. Anticipated Testimony: In the summer of 2001, Vicki Clifford, then a

resident of Crescent City, California, began looking for a company qualified to work

on trusts. Clifford believed that a trust would be the best plan for her five children.

Her husband disagreed and was not supportive of the trust idea.

      In July or August of 2001, Clifford and her friend, Nelda Bischoff, traveled to

Medford, Oregon to attend a seminar put on by a company that specialized in helping

people with trusts. The company was American Freedom Foundation and the man

Clifford spoke to was Steven Shollenburg. Shollenburg told Clifford and Bischoff that

they would have to become members of American Freedom Foundation before he

could help them. Shollenburg stated that he was a former police officer. Shollenburg

seemed to Clifford to be well qualified to work on trusts.

      Bischoff and Clifford joined American Freedom Foundation. Clifford paid

Shollenburg $125 cash to attend the seminar and join the foundation. Shollenburg

explained to Clifford that when she was born her mother signed the line on her birth

certificate that opened a personal trust account for Clifford with the United States

government. Shollenburg explained that Clifford had become collateral for the

United States beginning on the date of her birth in the amount that she would earn in

her lifetime. Shollenburg asked Clifford to get a copy of her birth certificate. Clifford

obtained her birth certificate and showed it to Shollenburg and there was a number

stamped on it. Shollenburg stated that if Clifford were to pay him an additional

amount he would prepare the papers to enable Clifford to use her money in her

personal trust account. Shollenburg explained that first Clifford would have to a

Uniform Commercial Code (UCC) filing and send multiple letters to various places.

      Shollenburg explained that the personal trust account could be used only to

discharge debt. Clifford told Shollenburg that she had little debt beyond a credit card

and asked if the personal trust account could be used to buy her a house. Shollenburg

said he was not sure about buying a house with trust money, but said that if Clifford

could find a seller who would work with her and sign an offer to sell, thereby creating

debt, the trust would probably pay. One day, while visiting Shollenburg at his house,

Clifford noticed two brand new vehicles in his driveway. Clifford asked Shollenburg

whether these vehicles were paid with his trust money and Shollenburg said that yes

they were. Shollenburg showed Clifford the paperwork he used to purchase the new


      Sometime in the fall of 2001, Shollenburg went to a seminar put on by a Barton

Buhtz. Buhtz was a media person whom Shollenburg often quoted when discussing

the personal trust accounts with Bischoff and Clifford. In November or December of

2001, Shollenburg mailed Clifford a packet of information which she was to process.

Shollenburg said this would be her UCC filing. Clifford found many mistakes with the

paperwork, which she corrected. Within a couple of weeks, Clifford learned that

Shollenburg would be moving from Oregon. Shollenburg had developed huge tumors

and had been diagnosed with terminal cancer. In January, just before he moved,

Shollenburg gave Clifford the rest of her paperwork on a computer floppy disk to

enable her to do whatever needed to be done to obtain her trust monies. Shollenburg

suggested to Clifford and Bischoff that they contact Barton Buhtz for further


      Clifford learned that Buhtz was an investigative reporter who was very

knowledgeable about personal trust accounts with the United States government. In

May 2002, Clifford and Bischoff drove to Buhtz's house at 10111 Mount Gleason,

Sunland, California 91040. Buhtz told Bischoff and Clifford that their social security

card was part of the same program Shollenburg had explained to them earlier. Buhtz

said Clifford could find on the back of the card a number which matched the number

on dollar bills somewhere in the United States. Buhtz informed Clifford that at her

birth $850,000 was placed into her account with the United States Department of

Treasury and that principal has accrued interest over the course of her lifetime.

      Buhtz prepared a "Bill of Exchange" which he said could be used to pay off

Clifford's credit card debt. The Bill of Exchange was for about $21,000 and Buhtz

created it on his desktop computer and printed it out on his home printer. Buhtz

instructed Clifford to mail the Bill of Exchange, certified mail, to the credit card

company. Clifford mailed the Bill of Exchange to the credit card company but did not

receive the confirmation slip and thought the Bill had been lost in the mail. Clifford

was not contacted by her credit card company and no credit for the payment appeared

on her credit card statement. Clifford and Bischoff started creating Bills of Exchange

on Bischoff's home computer.

      Clifford decided to use a Bill of Exchange to purchase a home from Robert

Minges, who had a house for sale in Del Norte County. When Clifford asked Buhtz if

she could purchase a home with a Bill of Exchange, Buhtz said he was not sure but it

would probably work. Buhtz advised Clifford to avoid escrow in case it did not work.

Clifford explained all this to Minges, who was anxious to sell his home. Minges

produced an Offer to Sell, thereby creating a debt for $350,455.00. Bischoff and

Clifford used Bischoff's home computer to create a Bill of Exchange for $350,455.00,

which represented Minges' asking price plus an additional amount for remodeling. In

early June 2002, Clifford, Bischoff and Minges opened an account at CHETCO

Federal Credit Union in Crescent City. This account was to serve as the escrow

account for the home purchase. Clifford, Bischoff and Minges went into the credit

union and presented a Bill of Exchange dated June 4, 2002, attached to which was a

Letter of Advice. The manager at the credit union photocopied the paperwork but

refused to process the items as a deposit.

      Clifford and Bischoff called Buhtz to advise him that the credit union had

refused to process the Bill of Exchange. Buhtz responded that he did not understand

why the credit union had refused to process the paperwork. Buhtz advised Clifford to

find a bank that would process the documents to her account at the Department of

Treasury. Relying on Buhtz's advice, Clifford told Minges that they needed to find

another bank. Minges recommended the Coast Central Credit Union because he had

an account there and knew the managers. Clifford and Bischoff changed the date on

the Offer to Sell and modified the Bill of Exchange to reflect a deposit to the Coast

Central Credit Union.

      In mid-June, 2002, Clifford, Bischoff and Minges opened a joint account at the

Crescent City branch of the Central Coast Credit Union. This account was to be used

as the new escrow account for the home sale funds. After opening the account, they

presented the Bill of Exchange to the credit union. A few days later, Minges received

a call from "Ben," the credit union manager who advised that the credit union would

not process the paperwork. "Ben" advised that the papers did not look legitimate and

that someone should come get them. Clifford and Bischoff again called Buhtz, who

again said he did not understand why the credit union was refusing to process the Bill

of Exchange. Buhtz said he would send the Coast Central Credit Union a "Point and

Authorities" letter as their consumer advocate. Buhtz had previously said he would

send the same type of letter to CHETCO Federal Credit Union but Clifford did not

know whether Buhtz ever sent CHETCO the letter.

      After the letter-sized Bills of Exchange were rejected by CHETCO Federal

Credit Union, Coast Central Credit Union and Clifford's credit card company, Bischoff

and Clifford suggested to Buhtz in July 2002 that they create and use a smaller check-

sized Bill of Exchange so that the banks could more easily process the documents.

Buhtz said this sounded like a very good idea and suggested they send him the

proposed document once they had something in mind. He agreed to look over their

proposed document and give it his final approval. Buhtz added that it might be

important to send the Bill of Exchange via certified mail. Buhtz thought that Coast

Central and CHETCO perhaps refused to process the Bills of Exchange because they

were personally served. Bischoff and Clifford used Bischoff's new laptop computer to

create the smaller check-sized version of a Bill of Exchange.

      In July 2002, Clifford provided Minges a check-sized Bill of Exchange in the

amount of $350,455.00. The routing number on the bottom of the check was

000000518. At Clifford's direction, Minges sent the Bill of Exchange by certified mail

to Coast Central Credit Union's main branch at Eureka, California. Clifford suggested

that Minges mail the Bill of Exchange to the main branch of the credit union in Eureka

because of the face amount and because the manager of the Crescent City branch,

"Ben," had earlier declined to accept a Bill of Exchange.

      In mid-July 2002, Clifford provided Bischoff with a check-sized Bill of

Exchange for $497,800.00 for the purchase of Bischoff's home in Grants Pass, Oregon.

Bischoff attempted to deposit this Bill of Exchange to her Washington Mutual Bank

account by mailing it certified to Washington Mutual Bank in Grants Pass, Oregon.

Washington Mutual Bank called Bischoff and told her they were not going to accept

the Bill of Exchange and that they were closing her account.

      In mid-July 2002, Clifford presented a Christian charity organization, The

Present Truth, with a check-sized Bill of Exchange in the amount of $520,500.00.

      In mid-July 2002, Clifford presented another Christian charity organization, MV

Society, with a check-sized Bill of Exchange in the amount of $148,123.36.

      In mid-July 2002, Bischoff went to Siskiyou RV in Grants Pass, Oregon.

Bischoff met with a salesman there and stated that she wanted to buy between four and

five units/RV vehicles and she would like an invoice for those units. Bischoff and

Clifford believed that the invoice would create a debt obligation which could be

dissolved through the use of Bills of Exchange drawn on their personal trust accounts.

Clifford and Bischoff created a check-sized Bill of Exchange for approximately

$500,000. Clifford drove to Grants Pass and delivered the Bill of Exchange to the

Siskiyou RV dealership. At the same time, Bischoff sent a letter to the dealership

asking Siskiyou not to hold any units based on their purchase until the deposit was

made into the dealership's account. Clifford did not want the RV dealership to miss

out on a sale by holding a vehicle if the processing of the Bill of Exchange did not go

through. Clifford instructed the dealership to mail the Bill of Exchange, certified, to

the bank to await deposit of the funds. Upon deposit of the funds into their account,

Clifford would return to the dealership to pick up the RV units. At some point, the

dealership called Bischoff and told her to come and pick up her units. Clifford told

Bischoff not to go until she had confirmation that Bill of Exchange had been processed

and the funds had been deposited into the dealership's bank account. Clifford was

concerned that if Bischoff took possession of the RV's before the Bill of Exchange had

been processed and prior to the deposit going through, she could be arrested. Buhtz

had told Bischoff and Clifford that people had been arrested in the past for taking

possession of vehicles before the Bill of Exchange had been thoroughly processed and

the funds had been credited to the dealership's account.

      Each time Bischoff and Clifford learned that one of their Bills of Exchange had

failed they called Buhtz. Each time Buhtz would tell them that he did not know why

the bills were being denied and that they needed to find a banker that would work with

them to process the Bills of Exchange properly through their accounts at the

Department of the Treasury.

      In late July or August, 2002, Clifford learned from Robert Minges that Central

Coast Credit Union had sent him a letter stating that the Bill of Exchange was not

being honored and was being turned over to the authorities. Clifford called Buhtz and

asked him why the credit union would turn the Bill of Exchange over to the authorities.

Buhtz said that the Bill of Exchange would be challenged but that as soon as they saw

that it was legal it will be honored. Buhtz said that an investigation was normal and

that all she had to do was wait until they sorted out all the details and that she had done

everything correctly and she would get her deposit.

      During the time that Clifford was trying to get the Bills of Exchange processed

through the various banks, she made at least three phone calls to the vice president of

Central Coast Credit Union, Mr. Mat Dennis. Clifford got Dennis's contact

information from the letter from the credit union to Minges advising that the credit

union would not honor the deposit or Minges' Bill of Exchange. Clifford told Dennis

that if the credit union did not process the Bill of Exchange there would be "dire

ramifications" both personally and for the credit union. Clifford recalls Buhtz advising

her to use words like "dire ramifications." When their Bills of Exchange kept getting

rejected, Clifford and Bischoff asked Buhtz whether the Bills of Exchange had worked

for anyone. Buhtz gave Clifford a list of people with their telephone numbers. The list

included Don Stevens, Bill Moore, Ron Shaffer, Dan Goggins, Bridget at American

Rights Litigators and Sam Biser.

      Clifford and Bischoff were concerned that they might go to jail when they

learned that one of their Bills of Exchange had been turned over to the authorities.

Clifford learned of an attorney named John Brownlee from Tennessee who gave

traveling seminars regarding fraud schemes. Clifford had a personal meeting with

Brownlee when Brownlee held a seminar in Medford, Oregon toward the end of

August. Clifford and Bischoff drove to Medford and met Brownlee. On their way up

to Medford, they called Bill Moore and he informed them that he had tried using a Bill

of Exchange but it had never worked. When they met with Brownlee, he advised them

that what they tried was a scam and that the personal trust accounts did not exist.

      Clifford's last contact with Buhtz occurred in August 2002. She did not tell him

about her meeting with Brownlee or that she knew the Bill of Exchange was a fraud or

that she was contacted by the FBI. Clifford wrote letters to all the banks and creditors

saying that she was duped and apologizing for any problems she may have caused.

      Clifford made all her payments to Shollenburg and Buhtz in cash or by money

order. Clifford believes that Shollenburg and Buhtz believe in this process with their

whole heart and that they are very sincere. Clifford does not believe that Buhtz or

Shollenburg were intentionally trying to hurt her.

      Clifford summarized her Bills of Exchange (BOE) as follows:

      (1) May 29, 2002, used a $20,362.01 BOE created by Barton Buhtz to send to

her credit card company.

      (2) June 4, 2002, created a letter-sized $350,455.00 BOE for the purchase of

Robert Minges' home and tried to deposit the BOE into an account at the CHETCO

Credit Union.

      (3) June 16, 2002, created a letter-sized $350,455.00 BOE for the purchase of

Robert Minges' home and tried to deposit the BOE into an account at the Coast Central

Credit Union.

      (4) June 24, 2002, created a letter-sized $350,455.00 BOE for the purchase of

Robert Minges' home and tried to deposit the BOE into an account at the Coast Central

Credit Union.

      (5) July 18, 2002, created a check-sized $497,800.00 BOE for the purchase of

Nelda Bischoff's home and tried to deposit the BOE into Bischoff's account at

Washington Mutual Bank.

      (6) July 19, 2002, created a check-sized $350,455.00 BOE for the purchase of

Robert Minges' home and tried to deposit the BOE into an account at the Coast Central

Credit Union.

      (7) July 22, 2002, created a check-sized $520,500.00 BOE and presented the

BOE to The Present Truth, a charity. The charity tried to deposit the BOE into their

account at Colonial Bank.

      (8) July 22, 2002, created a check-sized $148,123.36 BOE and presented the

BOE to The MV Society of SDA, a charity. The charity tried to deposit the BOE into

their account at Community National Bank.

      In addition to the above, Clifford presented to USAA Savings Bank, on or about

May 29, 2002, a Bill of Exchange in the amount of $20,362.

      All the BOE presented to the various financial institutions were rejected by these

institutions. In some cases, the accounts into which the BOE were to be deposited

were closed.

      On 9/27/2002, Vicki Clifford and Nelda Bischoff participated in an FBI-

monitored phone conversation with Barton Buhtz. On 9/27/02, Vicki Clifford

provided a handwritten document to FBI Special Agent Christopher Langert which

listed Vicki Clifford's payments to Steve Shollenburg and Barton Buhtz. In August

2001, Clifford paid Shollenburg approximately $135 for a seminar. In August or

September 2001, Clifford paid Shollenburg $2,146.02 cash for work on paperwork

relating to trusts, land patents and UCC filings. In October 2001, Clifford paid

Shollenburg $140 cash for trust, land patent or UCC filing paperwork. In February

2002, Clifford paid Buhtz $50 for his investigative report. In May 2002, Clifford paid

Buhtz $200 for advice at his home. In July or August 2002, Clifford paid Buhtz $200

as a thank you for helping her when she got a Coast Central Credit Union letter stating

that her Bill of Exchange had been turned over to authorities.

3. Brian Coughlin:

      A. Occupation: Brian Coughlin is an FBI agent, assigned to Los Angeles,

California in 2003.

      B. Anticipated Testimony:        Brian Coughlin will testify about his seizure of

documents during a May 21, 2003 search warrant at Barton Buhtz’s home in Sunland,

California. Specifically, Coughlin will authenticate the file he seized containing the

documents that are included in Government Exhibit 26.

4. Toni Crippen:

      A. Occupation: Toni Crippen was employed with U.S. Bank in Medford,

Oregon from 1977 to 2003.

      B. Anticipated Testimony:        In 2001, she held the position of personal

banking officer. Her duties as a personal banker included approving loans, opening

new accounts and providing customer service. For approximately three years, she

worked with Rebecca Shollenburg, who was also a personal banking officer. During

the summer of 2001, Crippen accepted some documentation from Rebecca

Shollenburg that related to the attempted purchase of a vehicle from Lithia Motors.

Crippen's first meeting with Shollenburg was at Crippen's desk. The meeting included

Richard Aquila. Crippen could not recall if Steve Shollenburg was at the first meeting.

Crippen estimated that she met with Rebecca Shollenburg a total of about 10 times.

Shollenburg sometimes called Crippen or dropped by Crippen's office so she was not

sure how many contacts they had. Shollenburg told Crippen that she had funds in a

Treasury account and provided documents that described the procedure for transferring

funds from the Department of the Treasury to US Bank.

      Crippen relied on Shollenburg's documents, relating to a trade acceptance, and

instructions for guidance to process the trade acceptance. Crippen does not do anything

without documentation. She relied on documents and instruction her belief that

Shollenburg had done her research. She also relied on the fact that she knew both

customers, Shollenburg and Lithia Motors. In addition, Shollenburg and her husband,

Steven, owned a business and were longtime customers. Therefore, she placed more

trust in Shollenburg than she would have with someone else. Crippen would not have

processed trade acceptances for someone who was not a bank customer.

      Crippen also received instructions from Barton Buhtz. She spoke a couple of

times with Buhtz on the phone. Buhtz seemed to be very knowledgeable, very

intellectual. He could also be very arrogant and he made her angry a few times.

During her conversations with Buhtz he told her that they were dealing with the private

part of the Department of Treasury, as opposed to the public part. Buhtz suggested

that Crippen might be facing legal action if she did not process the trade acceptance.

      Based on written instructions provided by Shollenburg and Aquila and telephone

conversations with Barton Buhtz, Crippen understood that, after she mailed

Shollenburg and Aquila's documents to the Department of the Treasury, U.S. Bank

would accept the funds from the Treasury on behalf of Shollenburg and Aquila and

then U.S. Bank would pay Lithia Toyota for their vehicles. Crippen recalled that the

instructions specified a 15 day waiting period before the bank would receive the

requested funds. Crippen made numerous telephone calls in an attempt to contact

someone about the funds. Crippen talked to a person named Loretta at Department of

Treasury in an attempt to verify the transaction and the transfer of funds. Crippen

eventually talked to someone at Treasury who gave her an account number to offset the

funds going to Shollenburg and Aquila. Crippen thought the funds from Treasury had

been credited to that account; however, she did not verify the exact figure. She

explained that the funds deposited this account could include several transactions in

one deposit. After receiving the account number, Crippen transferred funds and

credited the account of Lithia to cover Shollenburg's and Aquila's Trade Acceptance.

She sent a fax to notify Lithia Motors that the money had been transferred. She used

Lithia's account number in the letter from Dan Blair, the manager at Lithia Motors.

      Crippen became suspicious of the transactions when one of the mailings came

back to U.S. Bank. Crippen received a request to process a Trade Acceptance from a

Mr. Lewin and someone from Arizona. Shollenburg also told her there would be more

Trade Acceptances. Before she processed another Trade Acceptance, Crippen

telephoned Loretta at U.S. Bank's Treasury to determine whether she processed the

first two correctly. At that time, Loretta informed Crippen that Treasury did not

recognize the Trade Acceptances and that the documents were fraudulent.

      Rebecca Shollenburg introduced Crippen to Steven Dale Kelton. Kelton

attempted to negotiate a Trade Acceptance but Crippen refused to transfer the funds for

him. Crippen spoke with U.S. Bank's fraud department and learned that Rebecca

Shollenburg and Richard Aquila had defrauded the bank. Because of the transactions

Shollenburg and Aquila conducted at U.S. Bank, Crippen could have lost her job and it

almost came down to that. Crippen believes that she did not lose her job because she

documented everything she did and her supervisors supported her. On May 26, 2005,

Crippen was convicted of Theft in the First Degree in an unrelated case.

5. Deloris Douglas:

      A. Occupation: Deloris Douglas is a Management Assistant in the IRS

Analysis and Control Unit.

      B. Anticipated Testimony: Deloris Douglas heard of Buhtz through Latanya

Wilson. Wilson told UCC filers that their UCC documents were given to the Analysis

and Control Unit. Douglas remembers receiving hundreds of UCC documents that

were sent through certified mail. Douglas was working at the Analysis and Control

Unit up until September 11, 2001. The UCC documents began appearing sometime

before 2000/2001.

      Douglas had received numerous mailings and phone calls from people trying to

use their UCC charge back accounts. These Treasury charge back accounts were also

referred to as Direct Treasury Accounts. In addition to the taxpayers, Douglas

received calls from banks and mortgage companies who were trying to find out

information about these accounts. The taxpayers participating in the UCC thought that

the Treasury had an account that could be used to pay for houses, cars and other assets.

Douglas was instructed to forward UCC documents to the District Director located in

the respective taxpayer's area. District Directors were responsible for handling

correspondence with the taxpayers.

      Douglas never told anyone that the UCC process was legitimate. Douglas was

not authorized to answer specific questions and could only tell people that their

documents had been forwarded to the District Director in their area.

Douglas has heard rumors about people successfully discharging debts by accessing

their UCC accounts. Douglas has never worked at or even heard of the UCC Division

of the IRS.

6. Betty Dougan:

      A. Occupation: Betty Dougan was a U.S. Bank Employee in 2001. She

worked with defendant Rebecca Shollenburg at U.S. Bank in Medford, Oregon.

      B. Anticipated Testimony: Rebecca Shollenburg invited her to a seminar at the

Rogue Regency Inn in May or June of 2001. The main speaker talked about UCC

filings and getting money from the government. She didn’t understand what he was

talking about. The main speaker was from California. He did not charge anything for

the seminar but said he would accept donations for the software program. She did not

feel comfortable with the content of the speaker's lecture and felt it was a scam.

7. David Edwards:

      A. Occupation: David Edwards is a physician from Fresno, California.

Edwards received a bachelor of science in zoology from Fresno State University and

earned his medical degree from Washington University in St. Louis, MO. He is a

general surgeon and has practiced medicine since 1960.

      B. Anticipated Testimony: David Edwards has been indicted in the Eastern

District of California on one count of corruptly endeavoring to impede and obstruct the

due administration of the internal revenue laws, in violation of 26 USC 7212(a), 3

counts of tax evasion, in violation of 26 USC 7201, and 2 counts of presenting a

fictitious instrument, in violation of 18 USC 514(a) (2). Edwards has no plea

agreement with the government and he understands that the government has made no

promises in exchange for his testimony. He has volunteered to testify against Barton

Buhtz because he believes Buhtz has destroyed his life.

      In early 2000, Dr. Edwards met Barton Buhtz through an investment counselor.

Buhtz helped him create trusts. Edwards wanted the trusts for estate planning purposes

and to protect his assets against claims from his educational filmmaking business.

Edwards attended Buhtz's seminar in Fresno, California. Buhtz seemed to make sense

but there was no chance to verify anything. Edwards investigated some of the stuff on

his own. When he asked Buhtz questions, Buhtz would make it seem that Edwards'

questions were elementary and that the answers were obvious. Buhtz used a loud,

demeaning "radio" voice to make his point. Buhtz handed out packets of information

which contained cases and other authority to back up his claims. The information

contained in the packets and Buhtz's statements at the seminar convinced Edwards that

he could use bills of exchange to discharge any kind of public or private debt. In

response to Edwards' questions, Buhtz would often tell Edwards to go do the research.

Edwards resented Buhtz telling him that he had to do the work to verify information

Buhtz was disseminating. Edwards now realizes he was wrong for relying on Buhtz.

      Buhtz accepted "donations" for his services. Edwards paid Buhtz $500.

Edwards was not sure what the money was for, perhaps to pay for Buhtz's personal


      Edwards consulted an unnamed attorney with Prepaid Legal, Inc., who advised

him the bills of exchange were valid but refused to put that opinion in writing.

Edwards feels he did "due diligence," even "over diligence" but it is hard to prove a

negative. Edwards believes that if Buhtz was not sure of the validity of bills of

exchange, he should not encouraged people to use them. Edwards says that only

"multiplies the problem."

      Buhtz mentioned Latanya Wilson, Thomas Sommerville, and Deloris Douglas as

his authorities for government-backed bills of exchange and advised that the Treasury

Department's "analysis and control unit" was the official government agency that

processed bills of exchange. Based on his own research, Edwards now has serious

doubts about that.

8. Douglas Francis Grabinsky:

       A. Occupation: Douglas Grabinsky is a surgical technologist and a resident of

Coquille, Oregon. He is married with three children.

       B. Anticipated Testimony: In the mid to late 1990's, Douglas Grabinsky had

tax problems and was advised by his pastor, Ronald Dean Joling, to contact Barton

Buhtz in California about the redemption process. He made contact with Buhtz

through phone calls and the internet. He paid Buhtz $500 by check to provide him

with the paperwork and the knowledge needed to complete the process of taking care

of his tax liability.

       Grabinsky supposedly used the redemption process to take care of his State and

Federal taxes and the system actually worked with his Federal taxes and he even got a

refund. Grabinsky made a total of 10 to 15 calls to Buhtz and sent countless e-mails to

him. He also studied UCC law books he received from either his pastor or Buhtz and

the redemption process seemed to make sense to him so he decided he would use it to

discharge his tax liability. When Grabinsky received his paperwork back with a letter

advising him that the paperwork did not discharge the debt, he called Barton Buhtz.

Buhtz advised him to take the next step which was to return the paperwork with a letter

from Buhtz explaining how the process worked. He then followed Buhtz's

instructions. Grabinsky thought that the paperwork was a legitimate way of getting rid

of tax debt.

        On April 17, 2003, Grabinsky presented a bill of exchange in the amount of

$1,679.78 to the Coos County Treasurer. On September 25, 2003, Oregon State Police

contacted Grabinsky and advised him that the paperwork he presented to the Coos

County Treasurer was a violation of state law regarding simulation of legal process.

The police advised Grabinsky that the process he was using did not work and he could

not use it to discharge his tax liability. Police told him that he should stop sending that

type of paperwork to any county, state or federal government office. After the Oregon

State Police contacted him, Grabinsky presented paperwork to the Umpqua Bank in

Coquille, Oregon. The bank did not accept the bill.

9. Kelly Hawthorne:

        A. Occupation: Kelly Hawthorne is Corporate Security Investigator for U.S.


        B. Anticipated Testimony: According to Kelly Hawthorne’s report, on

October 9, 2001, Corporate Security received notification from Lyn Flagstad in the

Treasury Department of U.S. Bank, that two Trade Acceptance (Bill of Exchange)

documents had been faxed to their office and they could not determine what these

documents were for. Flagstad had made a few calls to the U.S. Treasury and believed

that these were fictitious documents.

      Copies of these documents were sent to Corporate Security. It was determined

that a personal banker by the name of Toni Crippen at the Medford branch of the U.S.

Bank had accepted these documents. Contact was made with Kay Bekefi, the District

Operations Manager regarding these documents. Bekefi had also been notified by

Flagstad and had started gathering information. Bekefi stated that Crippen received

these Trade Acceptances from an ex-employee by the name of Rebecca Shollenburg

and another U.S. Bank customer by the name of Richard Roy Aquila. Crippen stated

to Bekefi that these were presented to her for vehicles to be purchased by the

customers. They were purchasing the vehicles from a local dealership named Lithia

Motors. This dealership banks with U.S. Bank and is one of the largest dealerships in

the United States. Crippen was not familiar with the documents but read through them

and figured she could read through the instructions and get through the process.

      Crippen was presented with a "Trade Acceptance," (Bill of Exchange), Actual

and Constructive Notice and an offer to Lithia Motors for the purchase of a vehicle, by

both Rebecca Adelle Shollenburg and Richard Roy Aquila.

      Shollenburg purchased 2001 Jeep Grand Limited Cherokee VIN

#1J4GW58N61C675811 in the amount of $41,955.00.

      Aquila purchased a 2001 Dodge 3/4 Ton Quad Cab 4x4 SLT Long Bed,

VIN#3B7KF23601G821910 in the amount of $46,659.00.

      The Trade Acceptance documents are to be sent to the Depository Trust

Corporation MMI Division in New York, New York and to Paul H. O' Neill, Secretary

of the Treasury, Department of the Treasury Bank, Attn: LaTayna Wilson, 1500

Pennsylvania Avenue, NW, Washington, D.C., 20220. The instructions read that these

need to be sent with a return receipt requested. Crippen complied with these


      After this process is completed, the Trade Acceptance documents state "When

the Trade Acceptance (Bill of Exchange) is not dishonored in writing within 15 days of

receipt by the Federal Window, Claimant’s financial institution is to release the credit

to the payee within the time stipulated by Regulation "Z," Truth in Lending Act or on

the date designated, whichever is later. Thee amount of this accepted draft is to be

credited by the Claimant's financial institution to the designated account and the

discharge of thee claim fifteen days after receipt by the Federal Window (Regulation

Z)." Our banker Toni Crippen signed as "Bailee's signature (authorized bank agent) on

August 6, 2001.

      On August 30, 2001 Crippen debited the Treasury Tax and Loan Account

general ledger #520003008 of U.S. Bank for the amounts of the vehicles and credited

Lithia Motors. Crippen stated she had received this general ledger number from

Loretta Danicich in Treasury. She then faxed copies of these receipts to Lithia Motors.

It appears from the paperwork retrieved from Crippen that procedures to process this

transaction were unclear. We have three different sets of instructions from an outside

party that explain the procedure.

      On August 31, 2001 a third party presented Crippen with another Trade

Acceptance (Bill of Exchange). His name is Steven D. Kelton. He had an offer and

acceptance of sale on a 1995 Freightliner truck in the amount of $48,650.00. This

offer was between Kelton and Jimmy Herald Lewin. Again Crippen followed the

instructions. About the time this customer was to be credited Crippen called Loretta

Danicich to make sure there had been no problems with the first set. Danicich stated

there was a problem and she should not process this last one.

      On October 9, 2001, Corporate Security made contact with Lisa Martin,

Attorney-Advisor, Office of the Chief Counsel, Bureau of the Public Debt, for the U.S.

Department of Treasury. She advised that the Trade Acceptances were fictitious.

Contact was made with Terry (Joe) Danelson and Kay Bekefi. We were informed that

Shollenburg and Aquila had an appointment to meet with Crippen to do more Trade

Acceptances. They had canceled the appointment for Tuesday. Corporate Security

Investigations instructed them to make an appointment for Wednesday, October 10,

2001 at 11:00 a.m.

      On October 10, 2001 U.S. Bank Investigator, Kelly Hawthorne and Recovery

Manager, David Shelofsky, met with Rebecca Shollenburg, her husband, Steven

Shollenburg, and Richard Aquila. We interviewed them regarding the Trade

Acceptances. They had made an appointment with Crippen on this day to process two

more transactions; they wanted to buy another truck and a motor home. They were

very shocked to know that the first transaction had not processed, as they had not been

notified of any problems. They also expressed concern over the elapsed time from the

first transaction to present. They stated that they had been invited to a meeting and had

learned about these trade acceptances there. The teacher was Barton Buhtz from

California. The customers claimed that they thought their actions were legal. They

went on to cite UCC codes and stated that these trade acceptances were to draw on the

bond that was put in their name at birth. They claim that, “you can see this bond on

your birth certificate." They also explained some of their other findings and how the

banks and government ran their business was wrong according to the constitution and

the uniform commercial code. Further conversation went into U.S. currency and how

it is illegal in the United States. We informed them that if they had problems with the

government they needed to take it up with them but they could not use U.S. Bank as

the conduit for their activities. They wanted proof from the government that the trade

acceptances were not honored. We informed them we had spoken to the U.S. Treasury

and had been assured that these were not being honored and an email was on the way

from the U.S. Treasury. At this time a deal was made with both parties that if they

surrendered their vehicles on this day they would not be held liable for the difference

of the amount owing between the new car purchase price and the used car selling price.

They willingly surrendered their vehicles back to U.S. Bank. Both titles were signed

over and the vehicles are now at the Medford Branch of U.S. Bank. Shortly after they

left the bank an email was sent from the U.S. Department of the Treasury. It read as


      I have examined the three "Trade Acceptances" your office faxed to me
      this morning. The first is in the amount of $48,650 and is signed by
      Steven Dale Kelton or Steven-Dale: Kelton as the drawer. The second is
      in the amount of $41,955 and is signed by Rebecca Adelle: Shollenburg
      as the drawer. The third is in the amount of $46,659 and is signed by
      Richard Roy Aquila as the drawer.

      Please be advised that none of these constitutes a valid Treasury security.
      All refer to a "Personal Direct Treasury Trust (UCC Contract) account."
      No such accounts exist within the United States Treasury Department.
      All of the documents also refer to a "Department of Treasury Bank."
      There is no such bank associated with the United States Treasury

      The Department of Treasury does maintain certain accounts with
      individuals in its TreasuryDirect system; however these accounts are
      strictly securities accounts and are not demand deposit accounts.
      Individuals may not direct payment to a third party from a TreasuryDirect
      account using a trade acceptance, bill of exchange, or any other type of
      instrument. None of the account numbers included in the documents you
      faxed are valid TreasuryDirect account numbers.

Lisa Martin
Office of the Chief Counsel
Bureau of the Public Debt
US Department of the Treasury

      Rebecca Shollenburg was called and a copy of this email was faxed to her.

After these customers left, Steven Dale Kelton and Jimmy Lewin met with Shelofsky

and Hawthorne. They came to the branch to have the account credited for their Trade

Acceptance. They asked if the paperwork had been processed. They were informed

the Trade Acceptance was fictitious. They questioned how we had come to that

conclusion. They were given Lisa Martin's name and phone number.

      In a letter to IRS Kurt Charlton dated February 12, 2003, Kelly Hawthorne

furnished the following loss figures:

      U.S. Bank has suffered a loss of $12,676.00 on the case for Rebecca
      Shollenburg. U.S. Bank's initial loss was $41,955.00. The 2001 Jeep
      Grand Cherokee which Shollenburg had purchased was turned over to
      U.S. Bank and sold to reduce the loss. The vehicle was sold for
      $27,000.00 to Auto-Truck Source, 18500 S.E. McLaughlin Blvd.
      Milwaukie, OR 97268. Additional two warranties for the vehicle were
      cancelled, one for a lifetime oil change contract, $349.00 refunded and
      one for an extended warranty, $1,930.00 refunded. Our reduced loss on
      Shollenburg is $12,676.00.

      U.S. Bank has suffered a loss of $19,659.00 on the case for Richard
      Aquila. U.S. Bank's initial loss was $46,659.00. The 2001 Dodge Pick-
      up truck which Aquila had purchased was turned over to U.S. Bank and
      sold to reduce the loss. The vehicle was sold for $27,000.00 to Auto-
      Truck Source, 18500 S.E. McLaughlin Blvd. Milwaukie, OR 97268. Our
      reduced loss on Aquila is $19,659.00.

10. Steven Hughes:

      A. Occupation: Steven Hughes is a car mechanic in Central Point, Oregon.

      B. Anticipated Testimony: Steven Hughes will testify that Steve Shollenburg

prepared three sight drafts for him in order to pay off Hughes’ outstanding tax liability.

Shollenburg prepared Documentary Draft #0002, dated 11/7/2001, and made payable

to the IRS in the amount of $4,690.27. Shollenburg prepared Documentary Draft

#0003, dated 11/7/2001, and made payable to the IRS in the amount of $5,828.79.

Shollenburg prepared Documentary Draft #0004, dated 11/7/2001, and made payable

to the IRS in the amount of $2,407.66. Shollenburg prepared all these documents at

his house on Table Rock Road in Medford, Oregon.

      Hughes agreed to give Shollenburg a Dodge D50 Truck in exchange for

Shollenburg’s work on the sight drafts. Hughes knew about a jeep and a truck which

the Shollenburgs purchased with sight drafts. Hughes said Shollenburg told him the

vehicles had to be returned because some of the paperwork was done incorrectly and

the bank lied.

      Hughes did not understand the whole process and he just did what Steve

Shollenburg told him to do.

11. Marsha Rasmussen:

      A. Occupation: Marsha Rasmussen is a certified massage therapist.

      B. Anticipated Testimony: Marsha Rasmussen presented Bills of Exchange in

Oregon and California in an attempt to discharge a debt. She did this on 10 to 15

occasions, beginning in mid 2002. On or about February 28, 2003, Rasmussen

presented a Bill of Exchange in the amount of $51,097.92 to Harvey M. Harper

Company. On or about March 5, 2003, Rasmussen presented a Bill of Exchange in the

amount of $75,000.00 to Two Lees Company. On or about March 13, 2003,

Rasmussen presented a Bill of Exchange in the amount of $9,402.04 to Schir Parts,

Inc. On or about March 13, 2003, Rasmussen presented a Bill of Exchange in the

amount of $623,000.00 through GMAC Realty to Robert Lutz and Susan Lutz. On or

about March 13, 2003, Rasmussen presented a Bill of Exchange in the amount of

$48,680.74 to Harvey M. Harper Company. On or about March 18, 2002, Rasmussen

presented a Bill of Exchange in the amount of $60,000.00 to General Assembly and

Church of the First Born. On or about March 27, 2002, Rasmussen presented a Bill of

Exchange in the amount of $52,849.39 to General Assembly and Church of the First

Born. On June 11, 2002 Barton Buhtz wrote a letter to Humboldt Bank, the bank

which had rejected the Bill of Exchange, attempting to convince the bank to accept it.

      She learned about Bonded Bill of Exchange Orders from Barton Buhtz, whom

she met in 1998 or 1999, having obtained his phone number from a radio talk show.

Buhtz explained the use of Bonded Bills of Exchange Orders (BBEO) as follows. A

BBEO is to be treated by the bank like a check. The bank sends the BBEO to the

Department of Treasury, along with the 1099-OID form. OID stands for original issue

discount. The bank is supposed to deposit funds in the amount indicated on the BBEO

into a "receiver's" account. This receiver is listed on the BBEO. The bank is to put a

15 day hold on these funds and mail all documents to the Department of the Treasury

via certified U.S. mail with a return receipt requested. When the bank receives the

return receipt, that means the Bill of Exchange was accepted by the Department of the

Treasury. The bank is to count 15 days from the Department of the Treasury's receipt

of the documents and, on the sixteenth day, release the hold on the funds in the

"receiver's" bank account. The bank is then to send its copies of the BBEO/Bill of

Exchange and accompanying documents to the IRS for the appropriate amount to be

credited to the bank's TT&L account. This TT&L account is credited through either an

electronic transfer from the IRS or a ledger transaction by the bank.

      Rasmussen had quite a few conversations with Buhtz, estimating that she talked

to him 20 to 30 times by phone or e-mail. A couple of times, she gave him a

"donation" of $15. Buhtz took her through the steps of the process and provided

guidance when she asked, "What do I do next?" Buhtz also provided names and phone

numbers for people at Treasury who could help her if she had more questions. She

created the BBEO on her home computer. She started out using BBEO to pay off

credit card debt. That was not successful. Then she tried to purchase real property in

McKinleyville, California (GMAC/Lutz) and to discharge her debt to the seller (Bobby

Porter) of real estate she purchased on contract (General Assembly and Church of the

First Born). Then she tried to purchase a mobile home (Two Lees Company), a couple

vehicles (Harvey M. Harper Company) and auto parts (Schir Parts). Schir Parts was

trying to process the BBEO when the FBI came in and "confiscated the funds out of

the account." When the banks refused to accept the Bills, Rasmussen contacted Buhtz

and he said, "The banks just don't believe it." Rasmussen encountered older bank

employees who she claims remembered BBEO being used a "long time" ago but these

employees said they did not know BBEO were still being used.

      At the time of her grand jury appearance on August 24, 2004, Rasmussen still

believed in BBEO. According to her, the banks were not rejecting them; they just did

not understand them. When the FBI told her the BBEO were not valid, she did not

believe them. She still tended to believe Buhtz, even though he had been wrong a few

times, because he always said they were still "working on perfecting it." Rasmussen

consulted an attorney once but he wanted money up front that she did not wish to pay

so he did not render an opinion about the BBEO.

12. Clark Supola:

      A. Occupation: Clark Supola is an IRS Revenue Officer in Medford, Oregon.

      B. Anticipated Testimony: Clark Supola was in charge of collecting

employment taxes from S & G Services, Inc., a company controlled by Steven and

Glenda Kelton. On March 26, 2003, Supola sent Steven Kelton a letter asking to meet

with Kelton to discuss the amount of taxes he owed. Supola requested that Kelton

bring payment to the meeting and advised that Kelton that he owed $7,414.87 in taxes,

penalties and interest.

      On April 15, 2003, Kelton signed a Bill of Exchange (BOE) in the amount of

$7,500 and sent the BOE to Supola. On April 23, 2003, Supola notified Kelton that

the BOE instrument would not be recognized as a valid payment. Supola further

advised that Kelton needed to contact Supola to resolve the situation by May 9, 2003.

Supola warned Kelton that a tax lien might be filed if there was no response by that


13. Thomas Sommerville:

        A. Occupation: Thomas Sommerville is employee at the IRS Analysis and

Control Unit, the same office which employs Deloris Douglas.

        B. Anticipated Testimony: Thomas Sommerville does not know Barton Buhtz

and cannot recall ever talking to him. The Analysis and Control Unit receives

misdirected mail and determines where the mail needs to go. The Analysis and

Control Unit stamps such mail to record the date the mail was received at the Unit.

Once the mail is read and the proper destination is determined, the mail is forwarded to

that office. Sommerville has received UCC documents at the Analysis and Control

Unit. He has never heard of the UCC Division of the IRS.

14. Latanya Wilson:

        A. Occupation: Latanya Wilson is employed at the IRS Office of Public


        B. Anticipated Testimony: LatanyaWilson began receiving correspondence

from Barton Buhtz around 1999 and has probably had three or four telephone

conversations with him. She believes her last contact with him was in January 2000.

Buhtz promoted Wilson's name as the person who was in charge of giving mail to the

Secretary of the Treasury. Wilson began to receive 1,000 mailings per month from

persons filing UCC documents and sight drafts. Wilson did not understand what the

documents were for and held on to them until she could figure out what to do with

them. Wilson's office was in the middle of a move and she was having difficulty

finding answers to what to do with the documents. Wilson eventually gave the

documents to the Secret Service.

      Wilson never told Buhtz that she gives mail to the Secretary of the Treasury.

Wilson told Buhtz that she did not know what to do with the documents so she has

been giving them to the Secret Service. Wilson stated that she does not have any

means of contacting Buhtz and that the Secret Service would have information on

contacting Buhtz. Wilson has not been receiving any documents recently.

      Wilson noticed that documents coming from Oregon appeared to be exactly the

same leading her to believe that people in Oregon had received the same set of

documents to use and that possibly these documents were created using the same

software. She remembers seeing Rebecca Shollenburg's name as notary on many of

the documents. Wilson believes that Buhtz is promoting the scheme in Oregon,

Nevada, Arizona and possibly Florida. Wilson had not received calls from people who

were considering filing the documents. The people who did call her wanted to check

on the status of their paperwork. Wilson would tell them that the paperwork made no

sense. The people would not listen to her because they were firmly convinced that this

was all part of some valid process.

15. Felix Zech:

      A. Occupation: Felix Zech is employed as an attorney with the IRS Health and

Welfare Office.

      B. Anticipated Testimony: Felix Zech has never heard of the UCC Division of

the IRS and is not even sure it exists. Zech has received numerous documents from

people who are trying to use a Bill of Exchange to access their government account.

Zech has heard that people think they have an account with the government, and are

filing documents in order to access this account. Supposedly this government account

is made accessible through some sort of local filing and a government lien on their

person. The whole process makes no sense to Zech.

      Zech has contacted Latanya Wilson. Wilson told him that she does not want the

documents Zech has been receiving. Wilson has received numerous documents herself

and does not want any more of them. Zech has been forwarding documents to an

attorney named Howard Levine. Levine has requested that Zech stop sending him

documents because he does not know what to do with them.

      Zech does not know what to do with the documents and has put some into the

burn box because there is nowhere to send them. Zech does not know why people

think they have accounts with the government. Zech does not know why people have

his name and why he is receiving Bills of Exchange and other documents from people.

Zech has returned calls to numerous people and may have talked to Buhtz at one time.

The name Barton Buhtz is not familiar to Zech. Zech's name is in Buhtz's

"Investigative Report" which falsely states that Zech works at the UCC Division of the



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