David Belisle: 00:27
Ladies and gentlemen, listeners around the world, welcome to the podcast series Creditors Corner Legal Talk presented by Smith Debnam, Attorneys at Law, where we explore a range of legal topics impacting businesses and individuals. Be sure to subscribe to stay up to date when our next episode releases. My name is David Belisle, and I am an attorney with the firm’s Creditors’ Rights Litigation section. Today’s topic is sovereign citizens. What are they? Where do they come from? How are their actions disrupting businesses, government agencies, and the legal system? What is being done in response to the sovereign citizen movement? All these questions will be answered in today’s podcast. Joining me today is attorney Caren Enloe, a partner and practice group leader at Smith Debnam with decades of legal experience protecting creditors and lenders, and fighting for clients in the consumer financial services sector. Caren’s practice encompasses all aspects of consumer finance litigation in both state and federal courts, as well as advising on compliance measures for businesses in the consumer finance industry. Caren’s article, titled “Sovereign Citizens and the Raging War of Paper Terrorism,” was recently published in the Conference on Consumer Finance Law’s most recent quarterly report. This is the 2025 Volume 78 No. 3 issue. Before we continue any further, I must inform any listeners that the information provided in this podcast does not and is not intended to constitute legal advice. Instead, any and all information or opinions shared are for general informational and entertainment purposes only. Listeners should contact a licensed attorney to obtain such legal advice. Now we can turn our attention back to the topic at hand for this episode, sovereign citizens. As I said previously, we are joined by attorney Caren Enloe. Caren, thank you for taking some time out of your schedule to join us today to discuss sovereign citizens, and congratulations on having your article published by such an established and well-respected journal.
Caren Enloe: 02:26
Thanks, David. It’s great to be here.
David Belisle: 02:29
I’ll start off with the easy one. What is the purpose of being here today? What is a sovereign citizen?
Caren Enloe: 02:36
So, David, sovereign citizens have been around since the late 1800s in the form of tax protesters. We used to call them freemen. I think the FBI has defined them best, though. It’s defined them as being anti-government extremists who believe that even though they physically reside in this country, they are separate or sovereign from the United States. As a result, they believe they don’t have to answer to any governmental authority, including courts, taxing entities, motor vehicle departments, or law enforcement. By the numbers, as of 2023, there were at least 33 established sovereign citizen groups with no fewer than 93 branches. And the Anti-Defamation League, which is one of the entities that is tracking the sovereign citizen movement, the other being the Southern Poverty Law Center and the FBI, estimates that there are close to 400,000 sovereign citizens living in the United States. Their weapon of choice is paper. Lots and lots of paper. And they should be taken seriously. They’ve been identified by the FBI as domestic terrorists.
David Belisle: 03:51
So I know you just said they’ve been around since the 1800s and identified by the FBI. Uh, can you provide us with a little bit more information on how this movement has gotten around, how it gained traction, and, as well, a short overview of their beliefs?
Caren Enloe: 04:09
Yeah, those are great questions, David. Let’s start with the beginning. Um, you know, you look back post-Civil War, and you start to see the word sovereign citizen appear for the first time, uh, really in the form of tax protesters. They didn’t believe they should have to pay taxes. Uh, they really kind of arise in times of one of what one of my partners would call times of want and woe. In other words, times when there’s a financial crisis or, uh, political unrest. We saw them really start to take off during the 1970s, during the farming crisis, with the Posse Comitatus, which really kind of went back to the county being the ruler, not the federal government. Saw several standoffs with law enforcement in the 1970s with the farming community. Uh, and then we really started to see it take shape in the form it’s in today, during the recession and during the mortgage crisis of the mid-2000s. I think my first experience with them was in the late 1990s, um, when they were going around, uh, as freemen, and they were trying to explain how the credit card companies owe them money, not the other way around. Um, like I said, they really kind of rise up in times of want and woe, in times of financial crisis, and times of political unrest, and hence that’s where we are today. Now, you add to that the fact that social media has taken off in the last 20 years, and now their word is spreading through TikTok and YouTube videos as a debt-avoidance scheme. Uh, when we look at their beliefs, we really start to see a couple of common tenets. And for the attorneys out there, you see these references to all caps spellings and things like that. Well, this all goes back to when the U.S. went off the gold standard in the 1930s. Um, sovereign citizens believe that a person is split into two people. A straw man who has created the birth certificates. And if you look at your birth certificate, David, I bet it’s in all caps. That’s the straw man, okay? The sovereign citizens believe that the U.S. pledged the straw man, the all-caps person, an exemption account to identify them by their Social Security number. This all starts to make sense when you start to look at some of what they do, uh, with international bills of exchange and everything else. That’s where the money’s coming from for those. And then there is also the person themselves. So when you see them start to sign powers of attorneys for themselves, they’re really kind of they’re writing a power of attorney for themselves because they’re two people; there’s the straw man and the real person. And so you kind of see that’s kind of the start of the whole thing, which goes back to when we went off the gold standard. Um, and so they don’t believe that when you look at the constitution, um, because the constitution says that states are only required to accept and recognize gold and silver as legal tender, they don’t believe money is legal tender. So if money is lent in the form of dollar bills and the like, they don’t believe that’s real money. So that’s kind of how it all gets started, and that’s kind of the genesis for all their theories. It really goes back to when the U.S. went off the gold standard.
David Belisle: 07:28
Thank you, Caren. I think that’s a great summary of their beliefs, um, especially stemming from times of crisis to picking up traction within social media. Now, if I’m a creditor or a lender and I am trying to pursue recovery on a debt, how do I know whether or not I’m dealing with someone who’s a sovereign citizen?
Caren Enloe: 07:52
Well, first thing to know is that most sovereign citizens disavow their association with the sovereign citizen movement. And that’s because there’s so much case law out there talking about sovereign citizen theories. Now they’re trying to disavow themselves as being sovereign citizens. So they’ll deny that they’re sovereign citizens. Secondly, if you see something that refers to uh the person as flesh and blood or as a vessel, um, or you see fingerprints as stamps, or you receive an international bill of exchange issued by the U.S. Treasury and Janet Yellen and predicated on Unich trial, you’re dealing with a sovereign citizen. Um, if you’re getting reams and reams of paper from an obligator on a debt, you’re probably dealing with a sovereign citizen.
David Belisle: 08:44
So, Caren, when I am in a lawsuit, and I get a response that has multiple UCC claims and other federal statutory claims that I think have nothing to do with my lawsuit, such as a bill of exchange. Uh, are those typical filings that you see with the sovereign citizen?
Caren Enloe: 09:03
Those are exactly the filings that we see with the sovereign citizen, David. Um, and look, their weapon of choice, as I said when we started, is paper, right? Um, they’re paper warriors. And so you’re gonna see so much paper with them, it’s gonna be crazy. You’re gonna see a lot of UCC filings where they are now issuing a lien to themselves. You’re gonna see false money instruments being sent to the creditor. Um, you’re gonna see reams and reams of paper, and that’s before the lawsuits are even filed. A lot of times, like in Auto Finance, they’ll send a check, a check, and I’m using air quotes you can’t see online, um, to the creditor to try to satisfy it, or they’ll send a lien or something, a UCC to the creditor. And so that’s before they even file suit. Once the creditor files suit, then what you’re gonna see are a whole lot of things that look like law, uh UCC claims, signing UCC sections, um, copies of those checks being brought in, all kinds of things along those lines, legal phrases being thrown around, statutes and and uh treaties that are being thrown around that aren’t necessarily in effect in the United States, RICO and criminal claims being thrown into a civil lawsuit. All of these things are signs of a sovereign citizen.
David Belisle: 10:29
In my personal experience practicing, I’ve also seen that, as you said, prior to a lawsuit, you’ll see sovereign citizens file things in the register of deeds or make other UCC filings that really have no basis to be filed yet or filed at all. Uh, so I’m kind of leading into my next question, which is, why is this movement so problematic for creditors, lenders, and others?
Caren Enloe: 10:55
Uh, well, because of the paper. They will file multiple filings, pages and pages, 35-page treatises and motions. And the problem is they’re almost always pro se. And if they’re pro se, courts are generally going to give them much more um leash than they might give an attorney. And these claims look real. And so it’s incumbent upon the attorney then to go into these claims and really parse them out. The good news is that over the last 20 years, a lot of case law has developed debunking these theories. And I would encourage any attorney dealing with these that they go in and really review the case law on it to determine, uh, what is out there that really to really explain it to the court, to bring the cases that debunk the theories into court to explain to the judge why these claims have no bearing. Regarding the UCCs, most states have a UCC gatekeeper provision to some degree, and there are actions that can be taken under the UCC for false UCC filings. But again, that takes time, attention, and money. And so that’s why it’s so problematic for creditors and others.
David Belisle: 12:32
So it sounds like with all of these filings, and it sounds like they’re throwing whatever they can at whatever avenue they also can find to try and ease out some way to either get out of paying the debts that they owe, or even trying to create their own cause of action for their own right to recover some monetary damages in some form or another. Uh, so, given the massive volume of filings you see, what is their success rate with their claims?
Caren Enloe: 13:05
I’ve never seen one granted. I mean, I put it at 0%. The only thing I have seen, and this is why I encourage creditors to take it seriously and be vigilant, is that we have seen sham arbitrations come up. Um, and by sham arbitration, I mean by an arbitration that’s not recognized by the courts, where there is a sham arbitration proceeding. There is a sham arbitration agreement that has been drawn up, which the creditor has not agreed to go through an arbitration proceeding. And I’ve seen one case out of somewhere in the southeast, I can’t remember where, where there was a motion to confirm that arbitration award. And because the creditor did not take it seriously and ignored it, the arbitration award got confirmed. But aside from that, 0%. Um, the good news is the courts used to just kind of, uh, hold their nose and treat it with disdain. They’re now starting to write detailed, pre-measured opinions that really debunk these claims. And that’s where I think it’s really helpful for the attorney to go pull that law when they see things like UCC 1-318 cited or 3108, and they see all these provisions being cited in these statutes being cited, like the KS Street Trust Act, I believe it is, which is by the way not been adopted by the U.S. Um, Unique trial not adopted by the U.S. uh lots of things like that that they are talking about that have just simply not been adopted by the U.S. The Hague Convention contains nothing relevant to collection, but it’s cited. Admiralty lobbying signed it because you’re a human vessel. Again, shot down by the courts.
David Belisle: 14:60
Yeah, Caren. I know that in some of uh the experience that I have, uh a big red flag for me is I’ll see someone filing uh their document and closing it with a site to UCC section one-three oh eight, and using such words as without prejudice or under protest or something of the like that is also insufficient. But like you said, and I want to highlight on this that creditors need to take it seriously, some of these claims, because they should expect for uh multiple filings where their weapon of choice uh is paper, the sovereign citizen weapon of choice being paper. So, can you talk a bit about how creditors should handle sovereign-citizen claims?
Caren Enloe: 15:43
Well, let’s back up and talk about 1308, because that’s a really good example that you just gave, David. And this is a UCC provision that’s essentially a reservation of rights. When that’s being used with words like without prejudice or under protest or things like that, what the sovereign citizen is saying is I’m trying to excuse myself from anything I might perjure myself with. And so, in other words, I’m giving myself a pass to not tell the truth. And so, when you start looking at those sections, that sounds good, 13308, but when you start looking at what it is, it has no relevance. It’s not a quasi-evidentiary tool that they try to use it for. So things like that, what a creditor should be doing, other than just taking it seriously, is really kind of debunking the claims, providing case law to the court, responding to the claims. If they get one of these bills of exchange checks to pay the entire amount of the debt, send it back. If they get a 1099, explain to the consumer that that is tax fraud. Try to, in other words, it and it takes time and effort and money to do that, which is not particularly great. But at the same time, what you’re getting is that you’re setting boundaries. And for some of these folks that don’t really understand, that might be all it takes.
David Belisle: 17:08
Caren, I’ve got one final question for you. What are the risks of not taking it seriously or not hiring a counsel who’s dealt with these sorts of claims before? And, uh, the ultimate question is: what are the consequences of not taking some of these filings seriously?
Caren Enloe: 17:28
Well, I mean, uh, not responding is always a problem. If you’ve got a sovereign citizen who’s filed a complaint and you don’t answer, you’re gonna have a default judgment taken against you. Um, I do think creditors, for the most part, take it seriously. I do think creditors respond appropriately. I don’t think it takes a special type of attorney to handle these claims. It does take an attorney who’s diligent that is looking at the claims, uh, unraveling them, and going ahead and understanding and looking at the law that has now been developed on these sovereign citizen theories. And they have been held by the courts to be frivolous.
David Belisle: 18:07
And this case law, you’ve seen it both developed in both state and federal courts?
Caren Enloe: 18:11
Yes, but primarily it’s in the federal courts, believe it or not. And the reason for that, David, is you don’t get many published state opinions. It generally has to go up to an appellate level to get there. Having said that, there is some, but it is primarily coming out in the federal courts, where every opinion is published, uh, either in a publishable form or it’s published on an online Lexis or Westlaw type document. So they’re available to the public.
