'Redemption' Internet Conspiracy Theory Backfires for 81-Year-Old Fred Neal

by Mark Friedman  on Monday, Sep. 30, 2013 12:00 am  

On June 18, Fred Neal Jr., 81, pleaded guilty in U.S. District Court in Little Rock.

Trip to Bankruptcy

Neal promptly filed for Chapter 13 bankruptcy protection on Jan. 5, 2009.

He again acted as his own attorney, and the bankruptcy case was thrown out less than three months later.

Unbowed, Neal filed for Chapter 11 bankruptcy reorganization in June 2009. He listed monthly income of $1,774, but reported $820 million in assets and the $1.6 million in debt from the IRS, which he said was disputed.

Those hundreds of millions in assets he claimed were liens he had filed against government officials.

“The Neals had no intent to pay the judgment or to reorganize their debt or to pay the IRS claim,” Stephanie Page of Washington, D.C., an attorney for the IRS, said during a February 2010 court proceeding, the transcript of which was included in the case file. “The bankruptcy was filed only to delay the seizure and sale of the property. … The Neals have a long history of evading the collection of federal income taxes, and this bankruptcy is a continuance of this activity.”

Neal had placed a $50 million lien against Page.

The hearing gave Neal a chance to explain the redemption theory to U.S. Bankruptcy Judge Ben Barry.

“It’s public knowledge, and so you can get on the computer and do a … Google search and come up with just scads of information,” Neal said at the hearing. “When you get back to House Joint Resolution 192 in 1933 and start moving forward with this, there’s a tremendous, tremendous amount of information there.”

According to Neal’s theory, the United States went bankrupt in 1933, making citizens debtors in a bankruptcy. There was, he said, a way to become a creditor with the Secretary of Treasury, and he claimed to have an account with the Treasury Department.

“I don’t write checks on it, but I can write bonded promissory notes,” Neal said.

He said he could use those notes to settle and discharge debts, which is what he did with the IRS.

 

 

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