‘Sovereign Citizen’ Judy Sellers Sentenced to 9 Years for $3.4M Tax Fraud Scheme

Jacksonville, FL – A ‘sovereign citizen’ with a penchant for tax fraud and grandstanding has been dealt a major blow. Judy Grace Sellers, 65, of Jacksonville, Florida, was sentenced to nine years in federal prison for her role in a $3.4 million tax fraud scheme.

On March 1, 2024, Sellers was found guilty of conspiracy to submit false tax returns and defraud the U.S. Treasury, substantive counts of aiding in the preparation of false tax returns, and filing a false lien against the U.S. Attorney for the Northern District of Florida. The charges were brought after a years-long investigation by the IRS – Criminal Investigation, the Federal Bureau of Investigation, and the Treasury Inspector General for Tax Administration.

At the heart of Sellers’ scheme was the promotion of the use of IRS Form 1099-OID to commit tax fraud. Sellers identified as a “sovereign citizen” and 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.

According to evidence presented at trial, Sellers’ scheme resulted in the submission of at least 22 returns requesting fraudulent refunds totaling at least $3.4 million from the IRS. The scheme also led to the filing of a false lien against the then-U.S. Attorney and a Department of Justice tax attorney who was leading a civil action against Sellers.

Sellers’ scheme was not without its hiccups. In 2015, she was placed on house arrest with a GPS ankle monitor pending trial. However, Sellers cut off her GPS ankle monitor and absconded, only to be located more than eight and a half years later in New Mexico.

“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.”

Sellers was ordered to pay restitution in the amount of $23,264.08, representing the unrecovered loss from the tax counts. She was originally indicted in December 2014 and had her indictment superseded to add a charge for absconding while on bond in February 2024.

The case highlights the ongoing threat posed by ‘sovereign citizens’ who seek to exploit the tax system for their own gain. It also serves as a reminder that those who engage in such activities will face the full force of the law.

Judy Grace Sellers, a 65-year-old ‘sovereign citizen,’ has been dealt a major blow in her bid to exploit the tax system. Her nine-year prison sentence is a testament to the resolve of law enforcement in pursuing those who seek to corrupt the nation’s tax system.