One day in 2015, Barbara Lavender’s husband returned from a U.F.O. conference and handed her a business card. It bore a red theater-curtain background, a vintage microphone and gold-and-white lettering that read: “Sean David Morton, Radio Host, Public Speaker, Author, Director, Screen Writer, Actor.” The polymathic Mr. Morton, Jeff Lavender told his wife, was U.F.O. royalty.
Mr. Morton had spent years whisking E.T.-obsessed tourists to Area 51 for $99 a pop, then leveraged his following into stints on the wee-hours conspiracy show “Coast to Coast AM” — at one point, the nation’s No. 3 talk-radio program. He dabbled in other fringe arts, such as remote viewing and psychic predictions about earthquakes, elections and the stock market. But by the time Mr. Lavender saw him talk in Southern California, Mr. Morton had shifted to something truly fantastical: instant debt relief.
He’d been peddling a workshop called “The Sovereign Factor: The Revolution Starts With You” — a nod to what is known as the sovereign citizens movement. A loose network of perhaps tens of thousands of far-right antigovernment extremists, sovereigns share certain conspiratorial beliefs and, sometimes, a desire to profit off a government whose legitimacy they deny.
“Do you realize,” read Mr. Morton’s workshop description, “you are ALL considered ‘Incompetent,’ ‘Wards of the State,’ ‘Residents’ and the ‘Chattel Property’ of the US Federal government, until you declare your Emancipation? Learn all the secrets about how to get the government off your back and out of your life once and for all!!” One of these secrets was called the “bond process.” By submitting the right set of papers, Mr. Morton said, you could wipe out your mortgage, tax bills and student loans.
Mr. Morton’s message had appeal beyond the tinfoil-hat crowd. In America after the Great Recession, plenty of people with upside-down mortgages and student debt were inclined to believe anyone offering help. Ms. Lavender, listening to her husband recap the workshop, was intrigued. Years earlier, she’d borrowed $48,000 to help her son attend college. She and her husband had worked in the mortgage industry in Southern California for decades, but educational debt was unfamiliar terrain. “I had never gone to college myself,” she told me recently. “I took out a loan I shouldn’t have.” Ms. Lavender lost her job and deferred the payments, and the interest kept piling up. By the time she held Mr. Morton’s business card in her hands, she owed $70,000.
She realized a U.F.O. gathering was an unusual venue for debt-relief advice. Her husband’s annual get-togethers with the “X-Files” crowd were a hobby for him, and a good-natured punch line for their family. But the size and intractability of her loan balance weighed on her; also, she trusted her husband, and he thought Mr. Morton’s bond process was worth checking out. She told me, “I think he probably was enticed by it because it might have been a little tiny kick in the pants to the government.”
As the Lavenders came to discover, sovereign fraudsters are the snake-oil salesmen of our time. Peddling a bouquet of grifts as varied as tax fraud and real estate scams, they prey on our suspicion of institutions, financial illiteracy, greed and despair. You don’t even have to buy into sovereign dogma to get swindled. You just need to be, as Ms. Lavender was, in debt. From 1990 to 2013, far-right extremists carried out more than 600 financial schemes that resulted in criminal charges, according to the researchers who run the U.S. Extremist Financial Crime Database, which is affiliated with the National Consortium for the Study of Terrorism and Responses to Terrorism and is the only clearinghouse of its kind.
That adds up to — conservatively — public losses of $1 billion. The majority of perpetrators were either sovereigns or their ideological cousins, tax defiers. Fraud is to them what cross-burning is to white supremacists: an expression of belief.
1. What sovereign citizens believe
Sovereigns, who sometimes call themselves “freemen” or “state citizens,” have no foundational document, but broadly they subscribe to an alternate version of American history. The tale can vary from sovereign to sovereign, but it goes roughly like this: At some point, a corporation secretly usurped the United States government, then went bankrupt and sought aid from international bankers. As collateral, the corporation offered the financiers … us. As sovereigns tell it, your birth certificate and Social Security card are not benign documents, but contracts that enslave you.
There is, they believe, a pathway to freedom: Renounce these contracts or otherwise assert your sovereignty. (Mr. Morton said he once told the Social Security Administration, “I don’t want this number.”) Then no one — not the taxman, not the police — can tell you what to do. Not all sovereigns are con men, but their belief system lends itself to deceit. You might declare yourself a “diplomat” from a nonexistent country. (Mr. Morton represented the Republic of New Lemuria and the Dominion of Melchizedek.) Or start a fake Native American tribe. Or blow off a court case because the American flag in the courtroom has gold fringe. Some sovereigns have even lashed out violently at law enforcement officers, which is why they’re considered a domestic terrorism threat.
Many sovereign myths hark back to the creation, in 1913, of the Federal Reserve. “It was this weird, complicated instrument for controlling the monetary system. People saw it as sinister,” the author J. M. Berger told me. In a recent paper, Mr. Berger traced the circulation of these ideas, in part, to a company named Omni Publications, which was something like the Infowars of the middle of the 20th century. One Omni title, “The Federal Reserve Conspiracy,” claimed that “enemy aliens” had infiltrated the banking system, and that their biographies could be found in “Who’s Who in American Jewry.” (Sovereign lore is often rooted in anti-Semitism.) By the 1970s, the intellectual father of the sovereign citizen movement, William Potter Gale, helped spread this type of falsehood to a larger audience.
The founder of the antigovernment group Posse Comitatus, Mr. Gale aligned himself with an emerging movement of tax protesters who argued, for instance, that paying taxes was a form of involuntary servitude. In turn, he introduced them to his warped version of America, where patriots establish their own legal system and hang those who defy it. Mr. Gale’s specific gift was wrapping nonsense in enough legalese that it sounded real. “If you have this movement that offers you essentially a lot of magic words that you can say to get out of trouble, that’s going to really appeal to people who are desperate and angry,” Mr. Berger said. Mr. Gale’s outreach was a success. Over time, the line between thousands of tax protesters and Posse members blurred.
Take “redemption” — a theory popularized, in part, by a Gale associate. Remember how the corporation-slash-fake-government used us as collateral? According to sovereign lore, this means the government set up secret accounts in our names. Some believe they contain the oddly specific amount of $630,000. (To be clear, this is “pure fantasy,” according to the Internal Revenue Service.)
One way sovereigns try to make the imaginary money real is by abusing legitimate I.R.S. forms. Law-abiding taxpayers use Form 1099-OID, for example, to report “original issue discount” income. But some sovereigns write in fake OID income, and fake withholding, in order to claim illegitimate refunds. If you file such a return, you risk at the very least a large fine. Yet from 2012 to 2014, according to the Treasury Inspector General for Tax Administration, the I.R.S. received close to 7,000 sham OID filings.
Chronically underfunded and understaffed, I.R.S. investigators refer only about two dozen sovereign-scam cases, on average, for prosecution each year. The agency sometimes misses returns that should raise suspicion. For example, in 2016, the I.R.S. discovered a sizable redemption scheme — but only after processing 207 bogus returns and disbursing more than $43 million. That’s another reason these strange theories persist, and have begun to leach out of the sovereign network and into the general population: Sometimes, improbably, they work.
2. ‘They just went berserk’
Mr. Morton was born in 1958, and his comfortable childhood in Northern California was a tutorial in how to make a sales pitch. His mother, Maureen Kennedy Salaman, was — as San Francisco magazine once described her — a “millionaire evangelical alternative-medicine fanatic” who promoted questionable cancer treatments.
She was also a member of the John Birch Society, the far-right group known for its paranoid anticommunism, and she stockpiled beans, grains and ammunition in case of a Russian invasion. In 1984, she was chosen as the vice-presidential nominee for the Populist Party, a favorite of white supremacists. (Its presidential candidate the following cycle was the former Ku Klux Klan grand wizard David Duke.) In her acceptance speech, she warned the crowd: “We’re up against the most evil and powerful conspiracy the world has ever known.”
When Mr. Morton reached adulthood, he sold unorthodox beliefs from behind a suburban-dad veneer: a flop of dark hair, a round, clean-shaven face, and a button-down-and-khakis wardrobe. He was charismatic but also childlike, friends said, his ego easily bruised. He branded himself an investigative reporter within the U.F.O. world, and in the 1990s, when Mr. Morton appeared on “The Montel Williams Show,” he made outrageous claims — more than 100 alien species had visited Earth! — with the certainty of a Nobel laureate. “I got close enough to one of these things that was floating around in the desert to actually get my face burned by it,” he said.
Even other U.F.O. enthusiasts considered him a kook, but Mr. Morton’s fans didn’t care. The truth was out there — and Sean David Morton had it. Branding himself a prophet, he plumbed the new-age convention circuit alongside specialists in animal telepathy, chakras, hauntings, angelic gemstone messages and the afterlife. Near the end of the millennium, at a convention in Las Vegas, a blue-eyed, reddish-haired woman approached him. Back in Utah, Melissa Thomson had grown up in a Mormon home and married at 22; she worked in banking and, in her spare time, doted on her pedigreed cats, even serving as treasurer of the local Cat Fanciers group. The “Coast to Coast” program was her escape, and she spent hours fan-girling over Mr. Morton, a frequent guest.
ImageSean David Morton, appearing on a friend’s online talk show.CreditProject Camelot
At the Las Vegas convention, Ms. Thomson apparently had one goal: to meet her idol. “It was love at first sight,” Mr. Morton said. She soon left her husband and joined Mr. Morton in Southern California. Her oldest brother, Robert, told me, “The more we found out, the more we warned Melissa that he is just not a decent person at all. But he promised her movie roles; they’ll inherit Mommy’s home in Atherton, her condo in Tahoe. All she could see was dollars.” When they got married, her family refused to attend.
(Through her lawyer, Ms. Morton declined to comment. Mr. Morton did not respond to multiple requests for comment, although he said on YouTube last fall that The New York Times was conducting a “massive smear campaign” against him. Unless otherwise noted, all of his quotes in this article are from court records.)
The Mortons lived in Hermosa Beach, a surf spot about 20 miles from downtown Los Angeles. Next to its mini-palaces, their oatmeal-colored apartment building resembled servants’ quarters, but it was a short stroll to the Pacific Ocean. Mr. Morton welcomed his new wife’s bushy-tailed Norwegian forest cats — when a new litter arrived, more than a dozen scampered around the apartment — and in turn she oversaw the administrative side of being Sean David Morton. He shilled conspiracy fiction (“The Dark Prophet — Veil of the Anti-Christ”); CDs (“Everything You Wanted to Know About the Future Vol. 2”); a $65 newsletter with thousands of subscribers (“TOMORROW’S HEADLINES TODAY!”).
Either this wasn’t particularly lucrative, or it wasn’t lucrative enough to replicate Mr. Morton’s childhood wealth. From the outside, it was hard to tell. “He was always asking me to try and help him to do something so that he could raise some money,” said Susan Shumsky, a fellow fixture on the new-age circuit. “Like, ‘Let’s do a trip to Peru so I can have some money. Let’s do a tele-seminar so that I can make some money.’” Ms. Morton’s pedigreed kittens, which sold for hundreds of dollars each, apparently kept them solvent. At various points, she also dog-walked and worked at Disneyland. Their friend Will Chappell said, “It was him leading the charge, him leading the family. She did what was necessary to accomplish his goals.”
Early in their relationship, a website called UFO Watchdog — “Exposing the Parasites, Delusional Personalities, Morons and Frauds Currently Clouding the UFO Issue” — dismantled much of Mr. Morton’s official biography. Mr. Morton sued; the case was dismissed. But in an email included in the case file, Ms. Morton waved off the findings: “I would only be concerned if Sean DIDN’T have critics. Some of the greatest people in history have had people attacking them at every step. It just means that Sean is doing something right and trying to make a difference in the world.”
By 2006, the couple was expecting a windfall. Ms. Salaman was in poor health; when she died, Mr. Morton assumed he’d inherit some of his mother’s fortune. But their relationship, already frosty, iced over in her final weeks. Ms. Salaman didn’t even want her son and his wife to visit. She cut them both out of her will, even as she kept a $100,000 trust for her Great Dane, Duke.
“They just both went berserk,” Ms. Morton’s brother recalled. “It’s just been scam after scam after scam.”
3. A deposit from the government for half a million dollars
While the sovereign citizen movement is inherently not organized, some members of the firmament become known as gurus, and are vectors for spreading the ideology. Mr. Morton often lectured at the Living Temple, a new age shop just south of Hermosa Beach. The owner favored a black T-shirt with five flying saucers and the admonition “KEEP LOOKING UP,” and yoga music ommed through a clutter of apothecary bottles, bags of herbal something, miracle-cleanse guidebooks and crop-circle DVDs.
One day, most likely in 2008, a man named Brandon Adams started showing up. Like Mr. Morton, he was a budding sovereign amplifier — but he was so much younger that his untucked button-downs looked like an attempt at playing dress-up. His family ran a local tax-prep business. “His whole thing was the banks,” Mr. Morton said later. “What he considered the great criminal conspiracy between the Internal Revenue Service and the banking cartels.” Mr. Morton quickly got him a speaking slot.
Some of Mr. Adams’s talks were recorded. Pacing in front of a few dozen people, scribbling phrases and stick figures on a whiteboard, he wove a dark tale. The secret bankruptcy. The people-as-collateral. Then, a twist: The banks were skimming money from — or “fractionalizing” — every transaction we make. He told the group they could reclaim the funds via Form 1099-OID.
From a folding chair, Mr. Morton — looking grayer and rounder than during his “Montel Williams” days — asked Mr. Adams if anyone had really gotten a big refund that way. Yes, Mr. Adams said. “The funny thing is, watch how quiet people start to get when they’re not so sure about the process and they do start getting the returns.” Laughter. “They’ve got that mentality: ‘I’m not going to say I just got two hundred and fifty grand.’”
The audience lapped it up. This was America during the financial crisis: The banks had been bailed out, but not homeowners, and the era of Tea Party rallies and Occupy Wall Street encampments was imminent. It wasn’t too much of a leap to suspect that Washington was in cahoots with the likes of J.P. Morgan. Mr. Adams’s Living Temple talks drew large enough crowds that he moved to a bigger venue and sold private coaching for $200 an hour. “It became a movement, really,” Mr. Morton said. (Mr. Adams did not respond to multiple requests for comment.)
In the spring of 2009, under Mr. Adams’s tutelage, the Mortons tried the OID scheme themselves. Mr. Morton filed four years of returns — from 2005 to 2008 — and claimed nearly $4 million in refunds. His wife filed a 2007 return and claimed about $12,000. “I never, ever, ever in any of this thought that I was breaking a law,” Mr. Morton later said. “I thought that this was the law.” His faith was bolstered when, that April, he got a refund for one of his returns: a direct deposit to their Washington Mutual account of $480,322.55.
4. Rich people find loopholes. Why not us?
In 2010, the Securities and Exchange Commission went after the Mortons for a different scheme — one with no connection to sovereign ideology. Mr. Morton had used his unconventional celebrity a few years earlier to begin an investment club, where he would channel his psychic powers into predicting foreign currency markets. It’s a risky type of trading, but Mr. Morton bragged that his forecasts were so accurate that even Henry Paulson, then the Treasury secretary, relied on them.
After hearing Mr. Morton promote the fund on “Coast to Coast,” a man from Washington State invested $217,000. An elderly New York woman parted with $20,000. “He’s promising the stars,” recalled Tim Saunders, an Alaska electrician who poured in his life savings of $135,000. “Yeah, my greed came out, and I felt I needed more, and quickly.” In all, more than 100 people invested $6 million. Mr. Morton sank only half of it into foreign-currency trading — nearly all of which he lost. At least $240,000 was funneled to a nonprofit the Mortons set up, and authorities don’t know where the rest is. In 2013, the S.E.C. won an $11.5 million judgment against him. (Ms. Morton was a relief defendant, meaning she was accused only of profiting from the scheme.)
The Mortons filed for bankruptcy, but repeatedly misled the government — for instance, when they claimed not to have bank accounts. A court eventually denied their discharge, meaning they couldn’t get rid of their debt. They were also tossed out of their beach-adjacent apartment. “Bottom line,” Ms. Morton told the bankruptcy trustee one day, “I just want to be able to get a decent job, have a nice place to live, pay my taxes, and just have my life back.”
It was around this time that the Mortons turned to hawking the debt-erasing sovereign scheme known as the “bond process.” Over two years, they helped people around the country send nearly two dozen fake bonds to the I.R.S., Quicken Loans, PennyMac, Bank of America, Chase Bank and the treasurer’s office in Contra Costa County, California. Early in 2015, Barbara Lavender, the woman whose husband met Mr. Morton at a U.F.O. conference, gave him a call.
Ms. Lavender is 61 and a front-desk clerk at an adult school. When I met her last year in Hemet, Calif., nearly 90 parched miles east of Los Angeles, her ranch-style home was trimmed in red Christmas lights. We chatted at her kitchen table, with her 14-year-old dog, Remy, curled at our feet. She explained that when she spoke to Mr. Morton over the phone, he avoided talking about sovereign ideology. Instead, he said she could purchase a portion of a bond that he held — and almost magically make her educational loan disappear.
To wipe out her $70,000 balance, he suggested Ms. Lavender should send him $2,500, or less than 4 percent of what she owed. She and her husband believed Mr. Morton had discovered the sort of workaround rich people find. “You know,” she testified later. “You hear it all the time: ‘wealthy with tax loopholes,’ and that kind of thing.”
The bond looked authentically bureaucratic, with a formal scalloped border. It was really certificate paper from Office Depot. The accompanying paperwork said that the student loan company was entitled to be paid back from a fund that, in reality, the United States taps to help stabilize foreign currencies. Mr. Morton said he warned Ms. Lavender: “Look, I don’t know if this is going to work. I’m not a lawyer.” He added, “It’s all going to depend on whether or not they accept it.”
A month after the Mortons mailed the bond package, Ms. Lavender checked her educational loan balance, saw it hadn’t budged and wrote Ms. Morton an email. She didn’t get a response. Ms. Lavender sent follow-up after follow-up. “This is beginning to feel increasingly more like a scam,” she wrote that October, “where we were bilked out of hard-earned money we did not have to spare.”
Ms. Morton finally replied and said she’d been recovering from knee surgery. Ms. Lavender sent an almost apologetic response. Her attention was elsewhere — her husband had died suddenly from a brain mass. “Once you hear from Sean, can you let me know what he thinks we should do next?” she wrote. “With my husband gone, this debt is now an even greater burden for me as he was the main breadwinner.”
Nothing came of the exchange. That winter, two men in jackets showed up at Ms. Lavender’s home and questioned her about the Mortons, the bond process, the outcome. Afterward, Ms. Lavender took one of their business cards to her nephew, who works for the local sheriff’s office. Yes, he reassured her. They really are from the I.R.S.
5. The Conspira-Sea Cruise
On Jan. 31, 2016, a nearly 200-foot-tall, white-and-blue cruise ship called the Ruby Princess docked at the Port of Los Angeles. About 100 guests on board had paid $3,000 each for what was marketed as the Conspira-Sea Cruise — a weeklong jaunt through Mexican waters and American paranoia, from “Vaccinations: Do You Really Know What’s Coming Through That Needle?” to “Conspiracy to Steal Your Body and Soul.” As the Mortons prepared to disembark, they were arrested by federal agents.
ImageIn 2016, the Ruby Princess hosted what was marketed as the “Conspira-Sea Cruise” — a weeklong jaunt through Mexican waters and American paranoia. Mr. Morton, who led a workshop called “From Fascism to Freedom,” was arrested as he prepared to disembark.CreditGeorge Rose/Getty Images
After years of digging by I.R.S. investigators, the Mortons faced a suite of charges related to their tax filings and fake bonds. Once off the Ruby Princess, where Mr. Morton had led a workshop called “From Fascism to Freedom,” they were separated, patted down and asked what medications they took. Mr. Morton said to ask Melissa about his. An agent did. “Cyanide,” she said, seething. On the way to jail, she added, “Do me a favor and tell Sean this: ‘Thank you and I’ll see you in the next life.’”
Their trial began just before Tax Day, 2017. The prosecution told a simple story of greed. “I submit the I.R.S. was a slot machine,” one prosecutor, Valerie Makarewicz, said. “Keep hitting spin. Keep playing until you hit that jackpot.” The same day the Mortons got their $480,322.55 refund, she said, they went to the bank and drained nearly all of their account. Once the I.R.S. realized its mistake and tried to recoup the money, the Mortons filed two more rounds of bogus returns and a set of fake bonds.
Ms. Morton’s lawyer presented a good-faith defense. She was under the thrall of sovereign gurus, he said, “people who kind of strutted back and forth on the stage with an answer for everything.” He showed the jury 37 pages of perfect-cursive notes Ms. Morton took at a Brandon Adams lecture. “In this courtroom, it’s obviously nonsense. But at that time, people believed it, and Melissa Morton believed it.”
Mr. Morton represented himself. “I’m not a rapist, a thug, a war criminal,” he said during his opening statement. “I didn’t run a Nazi concentration camp and murder millions of children.”
Serving as his own lawyer also meant he cross-examined witnesses. “Are you familiar with the bankruptcy of the United States in 1933?” he asked the government’s fraud expert. It was a reference to the sovereign conspiracy theory.
“No,” the witness said. “I’m not.”
During his closing argument, on the trial’s fourth day, Mr. Morton told the jury about the Norwegian forest cats. Earlier in the week, he said, he and his wife tried to save a premature kitten. They stayed up late, swaddled her in cloth, fed her milk with an eye dropper. The kitten died anyway. Ask yourselves, he implored the jurors, “Do we send these nice people who care for kittens and raise cats to jail forever?” The panel deliberated for two hours. When they returned, Ms. Morton greeted them with a hopeful smile. The verdict: guilty on all counts. She fainted.
Around this time, other prominent sovereigns were facing a reckoning. A court had permanently barred Mr. Adams from preparing tax returns or promoting the OID scheme; he ended up in prison for peddling fake money orders. Another guru on the Conspira-Sea Cruise named Winston Shrout (workshop: “Conspiracy of the Court System”) was awaiting trial in Oregon.
Mr. Morton’s sentencing was set for that June. But when the 11 a.m. hearing started, he didn’t show.
6. A post-eclipse, poolside bust
Agents spotted him that afternoon outside a Domino’s in Hermosa Beach, a gray hood and sunglasses shrouding much of his face. He hopped in his white Ford Escape and headed south. The next morning, he tweeted a plea for donations: “Melissa (and the cats) need help relocating.”
Two months passed. Mr. Morton resurfaced via video on a friend’s online talk show, “Project Camelot” (“Getting the Truth Out One Whistleblower at a Time”). His hair was mussed, as if he’d been startled awake, and he wore a headset, a black V-neck and dark-rimmed glasses that he took on and off.
His version of “hello” was ripping his judge and prosecutors as “the biggest gang of criminals you’re ever going to see.” Soon, he turned his attention to the impending solar eclipse. “This is one of the biggest turning points in American history!” he said. The video clocked more than 40,000 views. It was vintage Sean David Morton, which is to say it was impossible to tell what, if anything, he believed.
I once asked Will Chappell, who has known the Mortons for more than a decade, whether they were actual sovereign dogmatists. He said, “She definitely believed in the story that Sean was telling. I believe that Sean believed in the story that he was telling. A little bit, I believed in it.” And now, after their convictions? “Melissa, of course, knowing what she knew now, she would have been gone a long time ago. I think Sean would have still done what he did. He still thinks he just missed a step.”
The solar eclipse took place in August, the week after Mr. Morton’s on-the-lam interview. Though Ms. Morton promised the court she would have no contact with her fugitive husband, the couple rendezvoused at a hotel just outside Palm Springs. That morning, after the moon briefly blotted out the sun, Mr. Morton was lounging poolside in swim trunks, purple mountains arrayed above him, eclipse glasses at his side. An I.R.S. agent walked up. It was over.
At their sentencing, Ms. Morton distanced herself from him. “I am a living embodiment of ‘love is blind,’” she wrote to the judge. “If I ever questioned the teachings and processes by others, I was told, who was I to question others who were far smarter than I? There were thousands of attendees to the workshops and seminars. It was so convincing, well-organized and very believable. How could thousands of people be wrong?” She was sentenced to two years in prison and has filed an appeal. Behind bars, she passed time taking classes — résumé-writing, watercolor-painting, embroidery — and watching the Food Network; she was recently transferred to a halfway house. Emails posted on the Project Camelot site suggest she and her husband are still in touch.
Mr. Morton was sentenced to six years in prison. He’s representing himself on appeal, and in court papers he argued that he’d been “improperly profiled” as a “terrorist sovereign citizen.” On Project Camelot, he’s unrepentant — even sharing a pardon request he said he sent to President Trump.
“It’s because of my work in RADIO and TV INVESTIGATIVE JOURNALISM that DEEP STATE forces within the D.O.J. put my wife and I in prison for YEARS!” he wrote. Of course, he had a suggestion for how to correct this injustice: donate to his PayPal account.