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Press Release

Chipley “Sovereign Citizen” Convicted At Trial Of $3.4 Million Tax Fraud Scheme, Filing A False Lien, And Absconding While On Bond

For Immediate Release
U.S. Attorney's Office, Middle District of Florida

Jacksonville, Florida – United States Attorney Roger B. Handberg announces that a federal jury today found Judy Grace Sellers 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, filing a false lien against the U.S. Attorney for the Northern District of Florida, and failure to appear. Sellers faces a maximum penalty of 23 years in federal prison. Her sentencing hearing is scheduled for May 22, 2024.

Sellers originally was indicted in December 2014. Her indictment was superseded to add a charge for absconding while on bond in February 2024.

According to evidence presented at trial, in 2008 and 2009, Sellers operated a website called on which she promoted the use of IRS form 1099-OID to commit tax fraud. Sellers identified as a so-called “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 U.S. Treasury and other government entities. 

As part of this fraud scheme, Sellers also 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 in order to overcome the IRS’s internal controls and induce the IRS to issue refunds that were not owed. The proper use of the 1099-OID form is for companies such as brokers to report to the IRS income received by the purchaser of a discounted security. Sellers personally created and submitted to the IRS 1099-OID forms that were fraudulent on their face.

After submitting the fraudulent 1099-OID forms, Sellers’s co-conspirators would prepare and submit fraudulent returns seeking massive refunds, in one case exceeding half a million dollars on a single return. All of these refunds were based on non-existent 1099-OID “income” and withholdings. 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 in the Northern District of Florida filed a civil action in federal court to enjoin Sellers from promoting her fraudulent scheme on her 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.

In 2014, Sellers was indicted on charges of tax fraud and for filing a false lien and arrested. In January 2015, Sellers was placed on house arrest with a GPS ankle monitor pending trial. In May 2015, Sellers was granted permission by her probation officer to leave her home to get her hair done in preparation for her pretrial hearing a few days later. The next day, Sellers cut off her GPS ankle monitor, flung it on the side of the highway, and absconded. 

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Cut GPS Ankle Monitor

Sellers was not found until more than eight and a half years later in New Mexico. Prior to this, Sellers had pleaded guilty to failing to appear for her sentencing in her previous federal counterfeiting case in 2002. In her previous case, Sellers was apprehended living under a false name in Mississippi.

This case was investigated by IRS – Criminal Investigation, the Federal Bureau of Investigation, and the Treasury Inspector General for Tax Administration, with assistance from the U.S. Marshals Service. It was prosecuted by Assistant United States Attorneys Laura Cofer Taylor and Kelly Milliron.

Updated March 1, 2024