WASHINGTON – A federal jury in Montgomery, Ala., today convicted Monty Ervin and Patricia Ervin of conspiracy to defraud the United States and three counts of tax evasion, the Justice Department announced. The jury also convicted Patricia Ervin of one count of structuring transactions to avoid bank reporting requirements. The jury’s verdict culminated a two-week trial that began Oct. 25, 2011, in Dothan, Ala.
Based on the evidence introduced at trial, the Ervins amassed hundreds of investment properties over the last decade, receiving more than $9 million in rental income. Despite receiving this income, the couple paid nothing in federal income taxes. When confronted by the Internal Revenue Service (IRS) in 2006, the Ervins proclaimed that they were not United States citizens, and as “sovereigns,” did not consider themselves subject to federal or state law.
Monty Ervin and Patricia Ervin also filed numerous documents in probate court renouncing their U.S. citizenship. In one such filing, Monty Ervin declared himself the “governor” of Alabama in its “original jurisdiction.” The Ervins had a license plate on their vehicle which law enforcement witnesses testified was associated with a “sovereign citizens” organization.
The Ervins owned and managed Southern Realty, a property management company in Dothan. As the evidence showed at trial, the couple concealed their assets from the IRS by placing investment properties into the names of nominees – “trusts” and “trustees.” The “trustees” named on property deeds testified that they were not involved in the sale or purchase of the properties and that the Ervins “stamped” their signatures onto official property records. Patricia Ervin also structured deposits into Southern Realty’s bank account in an effort to evade federal currency reporting requirements.
In addition to hundreds of real estate investment properties, the evidence also showed that the Ervins had amassed beachfront condominium units in their own names including a $1.3 million unit they paid for in cash and, when investigated by the IRS, transferred those properties into the names of bogus “trusts” and “trustees.” Additionally, the government introduced into evidence $350,000 of gold coins apparently buried in their yard.
The Ervins were indicted by a federal grand jury in Montgomery in February 2011. In March, Monty Ervin was arrested by a U.S. Marshal’s Service Fugitive Task Force in Naples, Fla., with a notebook containing the latitude and longitude coordinates of an island off the coast of Honduras.
Sentencing for both defendants is scheduled for Jan. 23, 2012, before the U.S. District Court Judge Myron Thompson. Patricia Ervin faces a maximum of 25 years in federal prison and a maximum fine of $1.25 million. Monty Ervin faces a maximum of 20 years in federal prison and a maximum fine of $1 million.
This case was investigated by IRS-Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Michael Boteler and Justin Gelfand, and by Assistant U.S. Attorney Todd Brown of the Middle District of Alabama.