Former County Official Says Mortgages Are Illegal
Jarrod A. Clabaugh,
Source of Title - reprinted with permission
In January 2008,
LaSalle Bank Midwest filed for foreclosure against Bonnie
Scott, the former two-term recorder for Richland County,
Ohio. Scott, representing herself, claimed that a
representative of Bank of America fabricated evidence and issued
presentments recklessly; that because the debt requires "payment
in money of the United States" it is contrary to public policy;
and, that due to the "declared bankruptcy of United States,
Inc... the debt is discharged."
These types of arguments are
usually based on a theory that the banks who lent the money are
funded by the Federal Reserve, which has been supported by the
debt of the people since the United States went off the gold
standard. This theory contends that the bank's loan is backed by
Federal Reserve notes, which are backed by the debt of the
people. Therefore, the borrower is essentially borrowing their
own funds. Scott claimed that "research clearly concludes that
the bank did not 'loan' any lawful money to her (but) merely
made a bookkeeping entry based on the alleged borrower's ...
promise to pay, converted to a draft instrument... and that no
account of the bank's was debited."
Additionally, Scott filed
documents indicating that anything filed under her name, "Bonnie
M. Scott, or any derivative thereof," was a copyright belonging
to her and appointing her power of attorney to act for her
copyright, and, a Certified Deposit Order demanding the U.S.
Treasury to deposit $171,152.98 from a prepaid exemption account
as an authorized set-off against her mortgage.
In support of her arguments,
Scott cites to the Bible, the Uniform Commercial Code, House
Joint Resolutions, the Tax Code, U.S Code sections regulating
"Coins and Currency," and a few court opinions. One Supreme
Court case, from 1839, and was cited for the proposition that "a
private individual has as much privilege as banks..." including
the creation of alleged money. Bank of Augusta v. Earle,
38 U.S. 519 (1839).
"Of course, that is an absurd
interpretation of the case," said Robert A. Franco, the
president and founder of
Title. "This case addressed the right of state banks to
contract across state lines."
First National Bank of Montgomery vs. Daly, was cited
for its holding that "the Federal Reserve Act was
unconstitutional and void." This case was never officially
reported, but accounts of it exist on the Internet, mostly on
sites that promote similar theories for debt-elimination.
The defendant, Jerome Daly, an
attorney, was subsequently convicted of failure to file tax
returns and the Supreme Court called his arguments, challenging
the constitutionality of the Federal Reserve system, "clearly
frivolous." He was rumored to have been disbarred.
In a Motion to Strike, LaSalle
Bank called the Scott filings "voluminous text not relevant to
this action and essentially incomprehensible."
James DeWeese, a judge
for Richland County's Common Pleas Court, ignored Scott's claims
that the mortgages were not valid and ordered that her property
be sold at a sheriff's sale.
"These things turn up from time
to time everywhere," DeWeese told The Mansfield News Journal
in response to Scott's claims "(In some cases) I don't even
purport to understand what they are saying. When they don't come
in the form of a legal argument, I don't worry about it."
"If you don't make your payments
on the house, it gets sold," he added. Scott's home was sold
back to the bank for $126,000 to partially satisfy the $154,026
judgment to LaSalle Bank.
During her time as county
recorder, Scott encountered similar problems as the one she
filed with the county this past May. Individuals denied that the
county could sell their properties at foreclosure because the
loans they used to buy the homes were not backed by gold. But,
according to one examiner who visited Scott's office when she
was recorder, Scott ignored others' claims that their loans were
"It's funny that she dismissed
people for doing this when she was in office," the examiner
said. "But, then, she turns around and makes the exact same
types of statements once she is no longer serving the county. It
makes you wonder what she thought she'd achieve."
foray into county politics was an unsuccessful bid for the
Richland County Treasurer's job.
Real Estate Lawyer?
LegalMatch allows you to present your case, and
respond only to lawyers who want to help you.
It's Free & Confidential.