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AUNITED STATES DISTRICT COURT

WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION

United States of America )
ex rel. XXXX XXXXX, )
Plaintiff/Relator, )
)
v. )
)
)
Federal Reserve Bank of New York City, )
Mr. William C. Dudley, President, )
and unidentified officers; )
)
Board of Governors of the Federal Reserve, ) Case No: 12-0129-CV W hfs
Ms. Janet Yellen, CEO, )
and unidentified officers; ) FILED UNDER SEAL AND IN
CAMERA

THE FOLLOWING ENTITIES, WITH THEIR CHIEF OFFICERS,
WHO ARE PUBLICLY IDENTIFIED AS PRIMARY DEALERS:

Bank of Nova Scotia, New York agency,
BMO Capital Markets Corp.,
BNP Paribas Securities Corp.,
Barclays Capital Inc.,
Cantor Fitzgerald & Co.,
Citigroup Global Markets Inc.,
Credit Suisse Securities (USA) LLC,
Daiwa Capital Markets America Inc.,
Deutsche Bank Securities Inc.,
Goldman, Sachs & Co.,
HSBC Securities (USA) Inc.,
Jefferies LLC,
J.P. Morgan Securities LLC,
Merrill Lynch, Pierce, Fenner & Smith Inc.,
Mizuho Securities USA Inc.,
Morgan Stanley & Co. LLC,
Nomura Securities International, Inc.,
RBC Capital Markets, LLC,
RBS Securities Inc.,
SG Americas Securities, LLC,
UBS Securities LLC., Defendants.

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COMPLAINT
INTRODUCTION
1.1 Mr. James XXXXXX (the “relator”) brings this action on behalf of the

United States of America against defendants for treble damages and civil penalties arising

from the defendants' hiding of profit and lack of reporting such profit from Congress in

violation of the civil False Claims Act, Title 31, section 3729 (a)(1)(G) who “knowingly

and improperly avoids or decreases an obligation to pay or transmit money or property to

the Government.” and section 3729 (a)(1)(C) who “conspires to commit a violation of

subparagraph ...(G).”

1.2 The violation of the False Claims Act arise because defendants knowingly

and intentionally conceal from the government approximately six hundred (600) times

annually a total amount equal to the value of deficit spending of the government. A

contorted accounting scam and hidden records are used by the defendants to cover the

perfidy.

1.3 The Federal Reserve Bank of New York (hereinafter FRBNY) has

exclusive control of the redemption records. This authority is used to control receipts and

disbursements of all Treasury security auctions. The records have never been

independently audited.

1.4 The profit is hidden from the United States in violation of Title 12 sections

289 and 290 which specify net profit of the Federal Reserve system is the property of the

United States. (Ref. Section 7, paragraphs 1 and 2 of Federal Reserve Act of 1913).

1.5 Statutory requirement of Title 12, section 247 for a complete report of the

system to be periodically made to Congress is also routinely violated.

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THE PARTIES
2.1 Plaintiff James XXXXX resides in XXXXX County, Missouri in this

judicial district and is an adult citizen of the United States.

2.2 The FRBNY is a privately owned corporation operating on a franchise

granted by the BOG. It has statutory authority to sue or be sued. It is located at 33 Liberty

Street, New York City, New York.

2.3 Mr. William C. Dudley is employed by the United States and is the

President and CEO of FRBNY. Additional officers of the FRBNY with current or past

authority to sign and approve transfers of funds from the accounts of Treasury auctions

are unknown at this time.

2.4 The BOG is believed to be a privately held corporation owned by select

Primary Dealers. It operates as a government contractor that has assumed the guise of a

federal agency. It has statutory authority to sue or be sued. The office is located on

Constitution Ave NW, Washington, DC 20551.

2.5 Ms. Janet Yellen is an employee of the United States and is Chief

Executive Officer of the BOG. Additional officers of the BOG who are responsible for

current and past supervising and auditing the FRBNY operations are unknown at this

time.

2.6 The Bank of Nova Scotia is located at 1 Liberty Plaza, New York, N.Y.

10006. Mr. Daniel Santiago is the manager. No agent for service has been found.

[ Paragraphs 2.7 through 2.27 listing individual defendants with addresses deleted

in this internet posting for brevity.]

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JURISDICTION, CAUSE OF ACTION AND VENUE

3.1 This court has jurisdiction over False Claim Act violations filed by a

citizen pursuant to Title 31, section 3730(b)(1). Title 31, section 3732(a) authorizes

nationwide service of process and provides that an action under the False Claims Act

“may be brought in any judicial district in which the defendant...can be found, resides,

transacts business, or in which any act proscribed by section 3729 occurred.” Jurisdiction

is additionally established by Title 28, section 1331 (violation of U.S. law), section 1348

(a national bank), and section 1347 (collection of any revenue).

DEFENDANT FEDERAL RESERVE BANK OF NEW YORK

3.2 Defendant Federal Reserve Bank of New York (FRBNY) is a privately

owned corporation that transacts business in this jurisdictional area. It is empowered to

sue or be sued. Ref. 12 USC #341. Title 31, section 3729(a)(1)(G) provision has been

broadened to provide a cause of action to include any defendant “...who ...knowingly

conceals or improperly avoids or decreases an obligation to pay or transmit money or

property to the Government.” Nationwide service of process for defendants that

“transacts business” in the court's jurisdictional area is authorized by Title 31, section

3732(a). The FRBNY will accept auction bids from local customers and thereby transacts

business in this area.

DEFENDANTS PRIMARY DEALER

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3.3 Title 31, section 3732(a) authorizes nationwide service on any co-

defendant “in the case of multiple defendants, (where) any one defendant ...transacts

business...” Each Primary Dealer is alleged to have violated Title 31, section 3729(a)(1)

(G) by receiving and hiding profit from the Federal Reserve operation.

DEFENDANT FEDERAL RESERVE BOARD OF GOVERNORS

3.4 Defendant Federal Reserve Board of Governors (BOG) is the franchise holder of

the FRBNY. It is authorized to sue or be sued. Ref. 12 USC #248(p). It has

administrative control and regulatory authority over each Federal Reserve Bank. It has

the legislated responsibility for auditing and reporting to Congress an annual “complete

report” of the Federal Reserve system. A systemic violation of the Charter law of the

Federal Reserve legislation by any Federal Reserve Bank, and not corrected or reported

to Congress, is an entity that “Conspires to commit a violation of subparagraph ...(G)” in

violation of Title 31, section 3729(a)(1)(C).

3.5 An unlawful practice by any government employee or entity negates any

claim of sovereign immunity.

3.6 The BOG maintains the guise of a Federal agency. In fact, the BOG

operates as a government contractor. It has no lawful claim of sovereign immunity.

3.7 The BOG is subject to court process as respondent superior and as an

indispensable party for any alleged systemic unlawful operation of any Federal Reserve

bank.

3.8 The BOG is a privately held corporation secretly owned by select Primary

Dealers. The primary allegiance is to its owners. A government agency is established for

the benefit of society. Any government agency established for the benefit of a corporate

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enterprise in violation of its charter of creation is a legal nullity that is void from its

inception and negates any claim to sovereign immunity.

3.9 Federal Rule of Procedure 19 authorizes joinder of alleged owners of the

BOG as indispensable parties and recipients of purloined funds. FRCvP 17 joins parties

of the real interest.

3.10 The jurisdictional bar of Title 31, section 3730 (e)(4) is not applicable.

3.11 Venue is proper in this district pursuant to Title 31, section 3732(a) where

“any one defendant... transacts business...”

BACKGROUND

4.1 The Federal Reserve Bank of New York (FRBNY) and the Board of

Governors of the Federal Reserve (BOG) were created by legislation of 1913 that was

formulated at a clandestine meeting of Wall Street and European bankers secluded on

Jekyll Island. The legislation is codified as Title 12 sections 221 through 522.

4.2 The economic structure was modeled after historic European systems that

had benefited various rulers and financiers but left the nations in financial ruin and

widespread riots with confiscation of estates and physical harm to the perpetrators.

Hence, the latest model conceals the perpetrators.

4.3 Ownership of the BOG has been alleged by various authors but requests

pursuant to FOIA for verification of ownership are stonewalled with website links that

are uninformative. Ownership of the BOG is not a matter of public record.

4.4 Since the trail of money leads to the Primary Dealers, each member of that

group is assumed to be an owner of the BOG.

4.5 FOIA requests for the identities of those responsible for compiling the

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screened lists (and the original 1913 list) submitted for government appointment as

Federal Reserve officers are rebuffed Those parties are the owners of the BOG.

4.6 Supervisory and regulatory control of all Federal Reserve banks is vested

in the BOG; the Federal Reserve banks are franchisees controlled by the BOG.

4.7 The Federal Reserve banks have been held to operate as private

corporations.

4.8 The object of the Federal Reserve system is to embezzle the hidden profit

as exposed in this action.

4.9 The source of initial operating funds to establish operations in 1913 was

from the owners of the BOG.

OPERATION OF THE FEDERAL RESERVE
DEFICIT SPENDING

5.1 Deficit spending occurs when Congress approves such act. The U.S.

Treasury can then send a Treasury security (bill, bond or note; i.e., marketable securities)

as collateral to the FRBNY. The FRBNY then increases the government's line of credit

(book entry money) by that amount. The act is identified as a “loan” from the Federal

Reserve. The source of the loan is never identified as having the value before the “loan”

but somehow the money comes from an unknown source. The government pays for

services by vendors from the account. When a vendor requests “cash” from a commercial

bank after depositing the check, the vendor will receive Federal Reserve Notes (FRN),

i.e. an voucher acknowledging debt from the Federal Reserve system identified as a legal

tender. A legal tender is an alternate item from that which was contracted. The vendor

requests “dollars” when the check is cashed but is given FRN's as a substitute which, by

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law must be accepted for the requested item.

5.2 The FRBNY will sell the Treasury security (as a component of a roll-over

security) by auction with a superficial appearance by the U.S. Treasury.

AUCTIONS OF MARKETABLE TREASURY SECURITIES

5.3 Bids for auctions of Treasury Marketable securities are jointly received by

the FRBNY and select government branches. The auctions are open to the public.

Approximately 70 percent of sales is to the Primary Dealers who place bids with the

FRBNY.

5.4 Each security identifies how much goes for roll-over and how much is for

deficit spending. Approximately 85 percent of auctioned securities are used to fund roll-

over for maturing or redeemed Treasury securities. Security value for deficit spending is

about 15 percent. In this Complaint, the terms may be used to designate 100 percent of

each security for clarity.

ROLL-OVER SECURITIES

5.5 Funds received by auctioning securities for redemption of securities in the

market may be received by the government or the FRBNY. They are credited to a

government account by the FRBNY. Since they are credited to the government, there is

no increase in the National Debt nor is there any increase in the amount of currency in

circulation. The government balance sheet lists these funds as assets under Marketable

securities.

5.6 The Treasury makes a list of securities that are being recalled before

maturity with the price they will pay. The Primary Dealers are largely responsible for

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collecting listed or maturing securities for redemption.

5.7 The FRBNY has exclusive management and accounting control of

redemption accounts for the government. The accounts have never been independently

audited nor are they reported to Congress as required by law.

DEFICIT SPENDING SECURITIES

5.8 Deficit spending securities are auctioned as a small component of each

roll-over security. While temporarily shown on government balance sheets, the funds are

not available to pay for government services. If the funds belonged to the government,

there would be no increase in the National Debt nor would there be an increase in money

in circulation (inflation). The retention of the value within the Federal Reserve system is

concealed.

5.9 Revenue from both deficit and roll-over auctioned securities appears on the

government balance sheet under “Marketable” securities. Purchases of maturing

securities are listed under “Redemptions.” FRBNY has exclusive control of accounts for

redemption. This authority is used to pay the defendants their share of profit from deficit

spending. [ Recent changes in TreaauryDirect ,methods identify “new cash” and

“Publicly Held Maturing” as the two approved titles. Ref.

https://www.treasurydirect.gov/instit/annceresult/press/press_cashpydwn.htm ]

5.10 While the funds from various auctions appear on the balance sheet of the

government, the FRBNY has exclusive authority to handle disbursements of redeemed

securities. This authority is used to cover paying funds from deficit spending to the

owners of the BOG. Ref. 31 CFR 375.3.

5.11 Funds received from auctioning deficit spending securities are ostensibly

used to pay back the “loan” that created the book-entry money—while concealing the

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payment from public records. The defendant owners of the BOG advance no

consideration for the above “loan” or transactions. If the defendants has advanced value

in the “loan,” there would have been no increase in the amount of money in circulation

(inflation) and there would have been no increase in the National debt; i.e., no book-entry

creation of money.

5.12 The owners of the BOG receives the entire value of deficit spending as a

net profit by this handling. There is no consideration advanced by the defendants. The net

profit of the Federal Reserve system legally belongs to the government.

5.13 It is impossible to pay off the National Debt that is created by the above

transactions. Every “dollar” in circulation has been created as the principal of a “loan”

but requires repayment of principal plus interest. The interest is never created; it does not

exist. It is a loan that cannot be culminated. [Commercial bank creation of fractional

reserve money does not affect this conclusion.]

5.14 Defendants Primary Dealers, whose ancestors contrived and established

the scam to acquire humongous profit, receive funds from deficit spending securities with

full knowledge that the money is the fruit of a scam.

5.15 Defendant Board of Governors is a full and willing accomplice in the

scam and provides concealment of its action from public awareness.

5.16 The National Debt in February 2009 was $10.6 trillion; the debt on

February 2015 is $18.1 trillion. Total amount of funds concealed within the statutory limit

of six years exceeds $7.4 trillion.

5.17 There are approximately 600 auctions of Treasury securities annually.

Assuming each have a deficit spending component, each auction is a violation of the

defendant's obligation to transfer such money to the government. A six year period would

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involve approximately 3600 violations subject to a statutory civil penalty up to $10,000

for each violation.

6.1 WHEREFORE, Relator requests judgment against defendants for

three times the amount improperly concealed by the Federal Reserve system; for the

maximum civil penalty for each violation of the False Claims Act; for the minimum

statutory amount authorized to the Relator; for court costs and expenses; and for such

further relief as the Court deems just and proper.

NOTICE

7.1 As required by the False Claims Act for full disclosure of material

evidence, Relator conveys to this court that the perfidy of the Federal Reserve has been

the subject of an article written by the Relator and distributed to various internet

websites, including http://www.scribd.com/doc/49040689/RIP-OFF-BY-THE-

FEDERAL-RESERVE-Feb-17-2011. The mathematical progression concludes the

Federal Reserve is a Ponzi scheme inherently designed for economic self-destruction.

The writing is subject to random revision. A succinct analysis of money creation is also

posted at http://www.scribd.com/doc/101937790/Federal-Reserve-Heist.

To the best of my belief, there are good and worthy grounds to support this suit.

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Name deleted, Relator
address deleted March ______, 2015
deleted
*** *** ****

Declaration of Service

It is hereby Declared and Affirmed that one copy of this COMPLAINT has been mailed
th
to Mr. Jeffrey P. Ray, 400 East 9 . Street, Fifth Floor, Kansas City, Missouri 64106. In
continuing the practice of Mr. Ray, no service is made on the Attorney General.

Relator
address deleted March ______, 2015
address deleted
phone deleted

[amended filing refused by the court without counsel. No lawyer will accept position of counsel.]

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