$3.4 Million Tax Fraud Queen Judy Sellers Hit With 9-Year Prison Stint

Jacksonville, Florida – In a blow to the city’s underworld of tax cheats, U.S. District Judge Mark E. Walker today sentenced Judy Grace Sellers, 61, to five years in federal prison for conspiracy to submit false tax returns and defraud the U.S. Treasury, followed by a consecutive four-year sentence for failure to appear. Sellers was also ordered to pay restitution in the amount of $23,264.08, representing the unrecovered loss from the tax counts.

Sellers’ conviction stems from a brazen $3.4 million tax fraud scheme that saw her use a website to promote the use of IRS Form 1099-OID to commit tax fraud. Sellers, who identified as a ‘sovereign citizen,’ perpetuated the false premise that the U.S. Treasury maintains secret accounts attributed to every U.S. citizen that can be drawn on by filing a series of bogus documents with the Treasury and other government entities.

As part of this scheme, Sellers promoted the use of IRS Form 1099-OID to fraudulently report to the IRS debts – including mortgages, student loans, credit card debts, and court judgments – as income, along with 100% withholdings of that ‘income’ in informational returns to overcome the IRS’s internal controls and induce the IRS to issue refunds that were not owed. The conspiracy resulted in the submission of at least 22 returns requesting fraudulent refunds totaling at least $3.4 million from the IRS.

In 2011, the U.S. Attorney’s Office for the Northern District of Florida filed a civil action to enjoin Sellers from promoting her fraudulent scheme on her commercialredemption.com website. In retaliation, Sellers filed a false lien against the then-U.S. Attorney and a Department of Justice tax attorney who was leading the civil action.

Sellers was originally indicted in December 2014 and was arrested, but she managed to evade capture for nearly a decade. In May 2015, Sellers cut off her GPS ankle monitor and absconded, leaving law enforcement stunned. She was eventually located in New Mexico in 2024. Sellers has a history of evading the law, having previously pleaded guilty to failing to appear for her sentencing in her previous federal counterfeiting case in 2002.

“Today’s sentencing emphasizes our resolve in pursuing those who attempt to corrupt our nation’s tax system,” said Lani Rosado-Espinal, Acting Special Agent in Charge, CI Tampa Field Office. “No one is above the law in this great nation. Our law enforcement partners are just as committed as we are to ensuring that those seeking to live above the law are brought to justice.”