Securitization

Jack Smith
Jean Keating Transcript
Securitization is Illegal, - It is only illegal for private corporations.
Securitization: The process of homogenizing financial instruments into fungile securities, so
that they are sellale on the securities market.
!hen you sign a mortgage note it comes un"er #$$ %rticle &. %fter securitization, it comes
un"er %rticle '. #n"er #S la( securitization is illegal ecause it is frau"ulent. Instruments such
as loans, cre"it car"s an" receivales, are securitize". )nron (as involve" in securitization an"
someone rought charges against them. *ut almost all large corporations are "oing it as usual
usiness. +o(ever, the anking system an" the government are also "oing it.
Jean ,eating rought a -I$. suit against a ank, ut it (as thro(n out. *ut he (oul" have
"one etter no( that he kno(s more aout it.
It is all accounting, (hether it is anking, civil or criminal court. I sumitte" the /%S*
regulations 0 /%S123 securitization accounting, /%S145 .ffsetting of financial assets an"
liailities, /%S1&& "erivatives on he"ge accounts, /%S3, /%S63. These are the resource
materials for un"erstan"ing this process. The note is not un"er a negotiale instrument any
more, it is a security. %ll the anks follo( these stan"ar"s. They set up 7%%8, generally
accepte" accounting principles. The anks are man"ate" y Title 12 #S$ to follo( 7%%8 an"
7%%S. They have a local /%S* an" an international I/%S*. They also cover "erivatives. /%S
145 relates to #$$ &-&53, &59. If you (ant to instruct them on ho( to "o offsets, you have to
refer them to /%S 1&&. If you "on:t kno( the accounting regulations, you can:t give them the
proper instructions for settling an" closing. !hat you really (ant is recoupment.
-ecoupment 0 ;1< The recovery or regaining of e=penses %pplying the setoff so you can get
ack (hat you gave an" (hat you are entitle" to. ;2< The (ithhol"ing for the e>uitale part or
all of something that is "ue. This is all e>uitale action in a"miralty style instruments.
*lacks:
I.# 0 a memoran"um ackno(le"ging a "et. See also a "ue ill.
?#) *I@@ 0 See I.#
SI7+T ?-%/T 0 % "raft that is "ue on the earers "eman"A or on proper presentment to the
"ra(er. %lso terme" a "eman" "raft. % "raft is an uncon"itional or"er signe" y one person,
the "ra(er "irecting another person, the "ra(ee, to pay a certain sum of money on "eman" or
at a "efinite time to a person, the payee, or to earer.
This is colorale. !ho is hol"ing the "etB % "ue ill is like a sight "raft. They are not saying
from (hich perspective it is a "et, from theirs or yours. The party receiving the I.# is the
"etor, ecause the I.# is an asset. It is an instrument, an" you are the originator. Cou have
monetize" their system (ith your signature. %n I.# is an asset instrument, not a liaility
instrument. This is one of the places (here you have your perspective change".
1
#n"er the constitution, the government (as not given authority to create money. It is a po(er
reserve" y the people. %rticle I, section 15 restricte" the states from making gol" coins. So the
corporate government has to rely on the "eception of people to create money. So the (ay
money is create" is to have people sign an I.#, or promissory note. It is not a "et instrument
to the one (ho create" itA it is actually an asset. The creator can pass it on for someone else to
use. It is negotiale unless it inclu"es terms an" con"itions as part of a contract. The property
elongs to the creator, an" the hol"er is merely using it an" any procee"s that come from it
shoul" e restore" to the creator.
That is the po(er (e have if (e realize (e have the authority to "o this. The intent is to
un"erstan" the regulations an" to see ho( they are trying to "eceive us to elieve (e are the
"etor an" the slave an" they are the cre"itor at all times. This is not true. .ne shoul" listen to
truthra"io on Tues"ay, Septemer 3. .nly 13 minutes got recor"e" ecause of technical
"ifficulties.
!e are looking for recoupment. .nce (e, the creator of the promissory note have signe" it an"
others are using it, recoupment means (e (ant our property ack or have the account set off.
-ecoupment in practice is a counterclaim in a civil proce"ure. That is ho( one "oes a
recoupment. !e "i" a counterclaim on the groun"s thatA (ith the county, you can "o a setoff.
Cou can use the financial liaility of the accounting le"ger to offset the financial asset if you
have the right to "o that. *ut you have the right to "o that if you are the cre"itor on the liaility
si"e an" the ank or len"ing institution is the "etor on the liaility si"e.
There is a "uality here. The ank is the cre"itor on the receivale si"e or their asset si"e that is
the receivale. Cou are the cre"itor on the liaility si"e or the accounts payale. Cou can use
your accounts payale as an offset or counterclaim to the financial asset si"e that is the
receivale. The ank or the court is using the receivale si"e of the accounting le"ger. That is
(hat they are charging you (ith. .n the receivale si"e, you have to pay the "et, ecause
that is (here the charge is coming from since they are claiming to e the cre"itor like a ank
collecting the mortgage. The mortgage si"e of the ank le"ger is the anks asset an" their
receivale. *ut on the liaility si"e, ecause they sol" our gol"D
!e have the actual gol" contract (here they "i" this. This is not my opinion, (e have eleven
E35 million gol" on"s sol" from the ?e*eers ?iamon" $ompany. They sol" %merica:s gol"
un"er contract to the *ank of $hina. This is not my opinion. The #.S. "i" not go ankrupt in
16&&. !hat they "i" (as sell all the gol" un"er a gol" contract to the $hinese government. So
the #.S. ha" to give us an account payale as a cash receipt. /%S 63 tells us that (hen they
"o a cre"it to a transactional account, (hich is a liaility account, on (hich (e are the cre"itor,
they give a cash receipt to the customer an" a cash payment to the ank, ecause it is cash
procee"s. In interme"iate accounting, (hen you give them a promissory note,D
I gave a promissory note to a pulisher for E1F55. They accepte" it ecause I gave them the
proper accounting instructions. I "i" another one to another pulisher for over E&555. They
accepte" initially, an" then hire" a collection attorney in one of the iggest collection agencies
in the state of .hio. They "i"n:t sen" the note ack ecause a payment ten"ere" an" refuse"
is "ischarge". %lso, any form of viale payment must e accepte". %lmost anyone that you
sen" a note to is going to e making a mistake if they sen" it ack. There is someone here that
sent a transaction to the I-S on a close" checking account. +e got the cancelle" check ack
from the I-S. They sai" the check is no goo" ecause it is a close" account. *ut the
transactional marks on the ack of the check say other(ise.
2
If it is a note put into a ank, it is a cash receipt to the "epositor an" a cash payment to the
*ank. So (hen the ank processe" that close" check, the I-S got a cash receipt an" the ank
got cash payment. Then the I-S sent it ack, so it is evi"ence that the transaction is accepte",
ut then coloraly an" pulicly claim it is no goo".
The pulisher accepte" the note an" hire" an attorney. I sent them a letter an" they "roppe"
the matter since they kno( that I kno( (hat the accounting is. #n"er /%S 145, you get your
setoff. !hen you make a "eposit, it is a cash receipt, a cash procee". )verything ecomes a
cash procee" in commercial la( un"er %rticle 6. They sho( it as a cash procee". They give
you a cre"it to your account that is actually a cash receipt to you the customer or the orro(er.
Then they "o a cash payment to the ank. The ank they sell the note. They "o a +)@.$,
home e>uity line of cre"it, an" sell it to (arehouse len"ing institution. This is the same as a
cre"it car". )ven on a mortgage loanD
% +)@.$ is "ifferent than (arehouse len"ing. I got this from their mortgage "epartment. They
take the procee"s from the promissory note an" pay off the (arehouse len"er. So the "et on
the real estate is e=tinguishe" from the ooks ;is that (hy they call it closing<. They are
re>uire" to file an /- 2549. This is a alance sheet. #n"er 12 #S$ 24' an" &4F they are
re>uire" to file a alance sheet. They are re>uire" on a >uarterly or (eekly asis. They file
these alance sheets (ith the /e"eral -eserve *oar". I talke" to the hea" of the /-*. They file
a alance sheet (ith the oar". The alance sheet sho(s the assets an" liailities that they
use in the accounting. The liailities (oul" e your promissory note. It is a liaility ecause it is
an asset to you.
Securitization is the process of transferring all the liailities off the alance sheet. They can "o
this ecause you never ask for them. They have everyo"y conne" into elieving (e are
"etors instea" of cre"itors an" "o not kno( to ask for our assets. !e never ask for
recoupment. So (hy carry the payales on the ooks if they have een aan"one". !hy not
(rite them off an" sell them for more cash.
The government has such complicate" ooks it is impossile to figure out (hat is going on.
If you give a ank a promissory note, they are re>uire" to give you a cash receipt. They o(e
you that money un"er a recoupment or asset. If you take the receipt ack, they shoul" give you
some money. They call it an offset in accounting, ut in the #$$ it is calle" a recoupment.
#nless you "o ask or "o a "efense in recoupment un"er #$$ &-&53, an" a claim un"er &-&59,
you have a possessory an" property claim against the cash procee"s un"er the liaility si"e of
the le"ger. #$$ &-&59, there cannot e a hol"er in "ue course on a promissory note after they
"eposit it. They "o an off alance sheet entry. This means they take your note after they sell it,
instea" of sho(ing it on their alance sheet, they move it over to some other entities alance
sheet. It is no longer on the anks ooks. This is calle" off alance sheet ookkeeping. The
hea" of the /%S* sai" that I (as correct. They are not sho(ing the liaility si"e of the le"ger or
the accounts payale ecause it has een move" over to someone else:s alance sheet.
The I-S "oes the same thing (hen you ten"er them a negotiale instrument. They accept it
an" never return it. *ut "on:t a"Gust the account. They preten" like nothing happene". They
move them off the ooks that the collection agent is looking at. +e is only looking at the
accounts receivale le"ger.
3
Cou ten"er a note to the ank to stop a foreclosure, an" they ignore it. The agent at the ank
claims she never got any payment. The agent only sees the receivale si"e of the ooks. +e is
eing honest. It is up to us to make a claim for them to look at their other set of ooks. Cou
have to learn ho( the system (orks so you can e=plain it to them. !e nee" to kno( ho( to get
them to pro"uce the missing "ocuments. They are only going to pro"uce the "ocuments that
support their claim. The %merican an" )nglish litigation system is a"versarial. They only have
to present the evi"ence that supports their claim.
!hen a stra(man is charge" (ith spee"ing, he is given a charging instrument. It is the same
as a claim y the ank that sho(s that someone has faile" to make mortgage payment. It is a
commercial entry from a corporation sho(ing that there is a liaility on your part that is an
account receivale an" they are in the capacity of a cre"itor an" making you appear in the
capacity as a "etor. So the clerk has an accounting charge against the stra(man ut you are
operating the account. It is your responsiility to ring in recoupment in ehalf of the real party
of interest (hich is you ecause you are the ultimate cre"itor if you raise that claim against the
liaility si"e of the account.
8eople have a right to travel. So they have the right of recoupment to offset any charges
against the stra(man in an attempt to restrict the right of travel of living people. $ivil an"
criminal court proce"ure operates the same as the ank.
!hat is the sustantive principal involve" in this that allo(s them to avoi" frau"B The
government "oes everything correctly. They never make a mistake. The government is
involve" in securitization that appears to e a frau". There is immunity for people (ho
un"erstan" the proce"ure. .nly the unlearne" are foole" into voluntarily entering into
frau"ulent contracts. It "oes not (ork if you get frustrate" an" angry at the frau"ulent results of
your o(n ignorance.
!hen you sign a promissory note to create the mortgage (ith a ank to uy your house. %t
closing, they have alrea"y sol" your note to the (arehousing institution. The (arehousing
institution rought money into the ank (hen they ought the note. %t closing, they take the
money an" close out the account on one si"e. The ank forgot to tell you that you "on:t have a
liaility on their receivale si"e any more.
!hy "o they keep taking your moneyB They have ecome the servicer for the accountA they
are not paying principal an" interest. The payments are profit to the hol"er of the note. This is
not stealing if (e kne( ho( to make a claim for recoupment. They are using the note to e=pan"
the money supply.
#n"er Title 12 #S$ 1'1&;@<;1< (hen you "eposit a promissory note, it ecomes a cash item. It
ecomes the e>uivalent of cash ecause I have a cash receipt. I talke" to !alker To"", one
the hea"s of the $levelan" /-*. +e has een a government (itness in court cases regar"ing
*.). +e sai" that I am correct that (e are the cre"itor on the payales si"e of the le"ger. The
ank o(es you the money. Ho one is ringing up recoupment as a "efense. Cou (aive the
"efense an" they go to collection on the receivales.
#n"er civil rule 1&, you fail to ring a man"atory counterclaim, (hich is ase" on the same
transaction. #n"er the rules you have (aive" it ecause you (ere ignorant of the rules of
proce"ure.
4
I Gust file" a motion in a court case. I took portions of Statement 63 incorporate" it into a
memoran"um. These reports are file" on .I* forms in (hich the pulic has a right to
"isclosure un"er the privacy act. If they shift the assets off the ooks, they have to report to the
/-* (here it (ent, so you can follo( it. In the memoran"um, it sho(s that they are man"ate"
to give a cash receipt on any "eposit. It is a "eman" "eposit account. They are re>uire" to
sho( it on their ooks, ut they are not "oing that. They are "oing an offset entry. This is not
going to trial ecause (e are going to supoena the au"itor. %u"itors keep track of (here the
assets (ent. These are special au"itors.
!e have aske" for all this information in "iscovery un"er civil rule &9 if they "on:t ans(er, they
have a"mitte" them. This is so po(erful in this foreclosure that the anks attorney is saying
that "iscovery an" recor"s from au"itors "o not constitute a"missions. +aJ %re you telling the
court that the anks recor"s kept in the "ue course of usiness are not a"missionsB They are
hurting.
So in our motion for summary Gu"gment I put in a"missions that they a"mitte" y non-
response. So no( (e have them in a "ilemma. The other si"e is scramling. They have come
out (ith an affi"avit of a lost note or "estroye" instrument. #n"er #$$ &-&56 you have to sho(
four elements to claim a lost instrument: 1< you (ere in possession at the time it (as lostA 2<
you have the right of enforcement of the noteA &< you have to sho( that the oligor on the note
is in"emnifie" y you against an" future claimsA 4< the loss (as not "ue to a transfer.
They are trying to maintain the allusion that they are still hol"ing your paper(ork ecause you
are still paying them. The allusion is that there is a "et that is "ue. I:ve got the S& registration
statement. That is the form the ank file" that they sol" the note that is a transfer. The attorney
lie" (hen he put in a claim that the instrument (as lost.
!e have the 424;<;3< prospectus. The ank (e are "ealing (ith is *ank .ne that is o(ne" y
J8 Iorgan an" $hase. They sol" it in 166F right after they got our loan they sol" it. They are
"oing a +)@.$. Iost anks "o (arehouse len"ing. %s soon as they get the note, they orro(
the money from a (arehouse len"er. They ank "oes not give you the money or cre"it. They
get it from a (arehouse len"er. Then they pay off the (arehouse len"er (ith the note that they
sell to them. Then they make "erivatives out of this note y a ookkeeping entry.
The alance sheet, a 2549, 2546, an" 2566, have .I* numers on them that are suGect to
"isclosure un"er the privacy act, Title 3 #S$ 332;<;4<. They have to give it to you if you ask
for it. %t closing an" settlement, the reason they actually call it closing is ecause they pay off
the loan in its entirety. The "et is actually e=tinguishe".
8atriots say they "i"n:t len" any money. *ut that "oesn:t reut the receivale. There is no
money. *ut (e loane" them the note. So (e starte" the process, so (e have to help resolve"
the prolem.
They "o the accounting appropriately, ut there is t(o sets of ooks. *ut if you "on:t ask to see
the ooks, it is your prolem. This is also (hat they are "oing in the courtroom. The clerk has
the receivale si"e for the corporation an" the Gu"ge has the payales. The Gu"ge is hol"ing
accounts payale un"er +J- 162 for all the people that come efore him if he has the SSH.
The Gu"ge is not re>uire" to e a (itness or ring plea"ings to the court. +e is a referee. The
receivales are the charges against the stra(man. The party a(are of the payales is not the
same party han"ling the receivales. 8eople "on:t ring in an offsetting claim un"er the rules of
5
proce"ure. The Gu"ge "oes not have to "o the setoff unless you raise the issue or "efense. !e
have the right to (aive it. So the Gu"ge is the priest receiving the sacrifice for the corporation.
Securitization 2
Septemer 1', 2559
@evy on 8aycheck
)mployer file" /orm 1569 to pay $orp income ta= (ith employee:s salary an" using accounts
payale ?irect Treasury %ccount.
#se /orm 1566-.I?, correcte" o= checke", /orm 1569 an" 1545, for refun".
,eating:s letter to ill collector la( firm:
?ear Ir. ?oe,
I am (riting regar"ing your recent letter in regar" to your client KCL $.-8, eing the allege"
cre"itor in the amount of E1155. Cour allege" client has (aive" their status as a cre"itor (hen
they accepte" my ten"er of payment un"er #$$ MM&-456;a<N;< an" #$$ M&-954;a<. They "i"
not a"Gust their accounting le"ger to reflect settlement an" closure of the accounts receivale
si"e of the accounting le"ger.
*y (ay of revie(, I sent the (oman in the cre"it "epartment of the cre"itor, a negotiale
instrument on %pril 24th in the form of a commercial note "raft, as an or"er to pay un"er #$$
&-154;e<. This may e treate" either as a promise to pay or an or"er to pay. Since she has not
returne" the instrument to me she has oviously chosen the latterA an or"er to pay. #n"er M&-
154;f< of the #$$ a "raft is the e>uivalent of a check an" may e securitize" or monetize" y
"irect "eposit in a commercial checking, time, thrift or savings account un"er Title 12 of the
#nite" States co"e, Section 1'1&;@<;1< an" (hen "eposite" it ecomes the e>uivalent of
money as outline" un"er Section 1'1&;@<;1<.
The collection manager from the cre"it "epartment of the cre"itor "i", ho(ever, sen" me a
letter saying that she "i" not accept promissory notes. She is, ho(ever, preclu"e" y pulic
policy +J--162 an" Title &1 of the #nite" States $o"e Section 311';"<;2<, an" the /air ?et
8ractices %ct, aka, $onsumer 8rotection %ct at 13 #S$ M1951 an" M196& from "eman"ing
payment in any specific coin or currency of the #nite" States, even though she has not "one
so. Section ;"<;2< of Title &1 #S$ M131' states that an oligation governe" y gol" coin is
"ischarge" on payment "ollar for "ollar, y #nite" States coin or currency that is a legal ten"er
at the time of payment. The narro( vie( that money is limite" to legal ten"er is reGecte" un"er
Section 1-251;24< of the #$$. It is not limite" to #nite" States "ollars. See official comments
un"er section &-154 of the #$$ un"er the "efinition of money.
The (oman at the cre"itor has faile" to perform her "uty as fi"uciary trustee of the account. I
have "one a Hotorial protest against her an" the account for non-acceptance an" payment
un"er sections &-351 an" &-353;a<;< of the #$$, (hich creates the evi"ence or presumption
of a "ishonor. She is kno(ingly or unkno(ingly ecome the "etor an" myself the cre"itor y
operation of commercial an" a"ministrative la(. %lso (orthy of note, if she is going to treat the
note as a liaility instrument, she has to present it to me for payment, make me chargeale
un"er &-351 of the #$$, (hich she has also faile" to "o. To the e=tent that she is in "ishonor
for non-acceptance an" non payment y Hotorial protest on the a"ministrative si"e, D there
6
has een a "ischarge of the "et in its entirety un"er the /air ?et $ollection 8ractices %ct
(ithin the &5 "ay time frame as man"ate" y la(.
I have een teaching an" stu"ying commercial anking la( an" interme"iate an" a"vance"
accounting for &9 years. I have a "egree in $ommercial *anking la(, four years in
un"ergra"uate stu"y at #S$ an" four years at +astings School of @a( in San /rancisco. This
is for your e"ification an" e=hortation.
Since I am reasonaly sure that (e can come to a peaceful resolution of this matter, as your
client "oes not un"erstan" commercial anking la(, an" the I%S*, the /%S* an" 7%%8
principles as they apply to commercial anking. I "o a lot of tra"ing an" purchasing in the
commo"ities an" securities e=change market (here the use of a revocale stan"y letters of
cre"it, "ocumentary "rafts, international ills of e=change, or promissory notes are use"
e=clusively un"er the #HI$IT-%@ convention.
Cour client is not applying the correct accounting entries un"er 7%%8. She is treating the
account as a tra"e receivale through securitization as an off alance sheet financing
techni>ue. Since she has accepte" the instrument that I have ten"ere", I have a claim or
possessionary right in the instrument an" its procee"s un"er &-&59 of the #$$. %ny "efense
an" any claim in recoupment un"er section &-&53 of the #$$, (hich I shall e=ercise at my
option, if she "oes not cre"it my account. The 1566-.I? (ill i"entify (ho the principal is from,
(hich capital an" interest (ere taken, an" (ho the recipient or (ho the payer of the fun"s are,
an" (ho is hol"ing the account in escro( an" una"Guste".
Since I am solution oriente", an" (ant to sho( goo" faith, there are t(o (ays of resolving this
matter. Since you client has alrea"y accepte" my ten"er of payment an" has not returne" it,
you can instruct her to cre"it my account for the sum sai" in full for settlement an" closure. .r,
instruct her to return the original instrument to me, unen"orse", an" I (ill make an alternative
form of payment. .ther(ise, I (ill consi"er this matter settle" an" close".
)H? ./ @)TT)-
Jacks Comments:
The (oman at the cre"itor can:t sen" the promissory note ack ecause she has alrea"y
negotiate" the instrument. Ho one ever gets promissory notes or *.):s returne" ecause a
"et ten"ere" an" refuse" is "ischarge". She kept the note, an" (rote a letter saying that she
"oesn:t accept promissory notes. *ut her actions speak lou"er than (or"s. She accepte" it. So
it has alrea"y gone in to the corporate liaility account, ut it "i"n:t go into the corporate asset
account for le"ger. % "et ten"ere" an" refuse" is a "et pai".
!e sent an I*.) to a ank an" they negotiate" it an" sai" they returne" it. *ut they "i"n:t
return it. They "eposite" it an" it ecame cash procee"s. So (henever you sen" them the note
or *.), they keep it in their "eposit system an" it ecomes a cash item. They get a cash
receipt for the "eposit. If you "on:t un"erstan" accounting, they get a(ay (ith the theft of your
instrument. In reality, you gave them the instrument to settle an" close the account. Cour
instrument is an asset to you. It appears that you create" a "et instrument, ut the opposite is
true. The government has no authority un"er the constitution to create money. So only the
people can create money. So (e are the originator of money, so (e are the cre"itors. *ut they
make you elieve you are the "etor as if they are the creator of money.
7
The only (ay you have an accounting of the instrument is in the ookkeeping. %n" they are
keeping the account on the off alance sheet le"ger. If they kno( you kno( (hat they are
"oing, they (on:t try to hi"e it. !hen they go to a collection agency, they are selling the
account as a tra"e receivale from the asset si"e of the anks le"ger. If the ank is trying to
collect money, the evi"ence of that "et o(e" on their ooks is on their asset le"ger, accounts
receivale. If you gave them a promissory note, they have to recor" a "et to you on their
liaility le"ger. !hen the #S citizens ecame enemies of the state in 16&&, they (ere not
re>uire" to notify them of their assets. They are not re>uire" to notify enemies of their assets
"uring times of (ar. They are not re>uire" to return enemies of their assets. They are kept on
hi""en ooks.
!hen you sen" the collection agency the aove letter it creates a fi"uciary "uty for them to go
ack to the principal to check the off alance sheet liaility le"ger to "etermine if the account
has een pai" an" if your claim is correct.
This principle applies to the I-S an" the courts. They only (ant to "iscuss (hat you o(e them,
an" ignore (hat you pay them. The reason they tell you that your negotiale instrument is no
goo", is that un"er the Tra"ing !ith the )nemy %ct, they cannot allo( you to create your o(n
negotiale instruments or use your o(n assets. %ll they have "one is keep the le"gers
separate. The receivales ook has not een le"gere". That is (hy the collection agent says
they have not given you cre"it an" you still o(e the money.
The "et collector uys the account receivale in goo" faith (ithout evi"ence of its accuracy. It
is like a charging instrument. The attorney says pay up or (e are coming after you. #n"er civil
rules of proce"ure, rule 1&, commerce is a"versarial, so they are not re>uire" to tell you the
(hole truth. It is man"ate" that the "efen"ant return a counterclaim (ith facts proving that the
charge is untrue, (hich is an affirmative "efense. % claim is an account that has mature" for
"et collection. Cou must sho( you are a cre"itor. The charge is a presumptive claim (ith no
evi"ence.
% notice of lien or levy has no evi"ence of a claim. It is Gust a charge. % notice is a claim of
Guris"iction. % counterclaim is not a "ispute or argument. ?isputes are not permitte". If the
merchant ha" rought a claim, it (oul" have een a frau", ecause you alrea"y pai" it. So they
Gust give you a presumptive notice. It is an unsupporte" charge. There is proale cause (ith
no evi"ence. Cou have to respon" to it ecause it (ill ecome vali" if you "on:t. It is Gust a
notice of interest. It can mature to a claim (ith your failure to respon". Cou have to accept it
an" return it (ith your notice of interest, (hich is a counterclaim, (ithin 15 "ays, accor"ing to
a"miralty rules. /ailure to "o a specific negative averment of the facts allege" ;rule 6<
constitutes an acceptance of this fact as far as the courts are concerne". % notice of interest
matures to agreement of the parties that they have a vali" claim so they "o not have to prove it.
%n unsupporte" notice of interest ecomes an agree" claim. They are not guilty of frau", "eceit
or trickery. Cour failure to respon" is the prolem. .ur responsiility is to reut the assumptions
an" presumptions un"er the rules of evi"ence.
Jean "i" everything he nee"e" to "o in-la( an" at-la( to resolve the issue. The merchant
han"ling the ooks (as only han"ling the accounts receivale ooks for the corporation an"
(as not privy to their accounts payale ooks, (hich are their liaility ooks. The reason the
corporations separate their ookkeeping is they can ring this (oman in (ith a straight face
an" no kno(le"ge that the other ooks e=ist, s(ear in court that she:s een han"ling these
8
ooks for years an" the account still has an E1155 alance. Cou sent in an instrument that ha"
nothing to "o (ith affecting the alance on the ooks she han"les. !hen that corporation "i" a
"eposit of your promissory note, or *.) as a cash item receipt, that (ent into the other set of
ooks that she "oesn:t see. She can use her affi"avit an" s(ear that this account is still open.
!hereas if you kne( the accountant on the other set of ooks, an" supoenae" those ooks,
you (oul" fin" something on the le"ger over there an" there hasn:t een a transfer or
e=change of information et(een the t(o sets of ooks.
Cou nee" to ring the kno(le"ge of that for(ar" to a "ata integrity oar" hearing. I "on:t
"isagree (ith anything that this la"y is saying, ho(ever, if you (oul" go over to the corporate
liaility off alance sheet le"gers, you (oul" fin" that there has een a set off "eposite" there
an" if you coul" see oth sets of ooks, you (oul" see there is a set off, (hich is a claim un"er
civil rule 1&, (hich I am timely invoking an" I am asking you to look at oth sets of ooks an"
"o the offset alance an" "o the settlement an" closure in this matter.
-ememer, the firm hire" an attorney collection firm. The collector came (ith the charge to
Jean. +o( many times has Jean een charge" y "ifferent entities in this caseB T(ice, so they
can have t(o or more (itnesses. The first time he sai" to the receivales la"y (ith the
merchant, here is a promissory note. She ma"e a "etermination that she is not going to accept
it. *ut, the note "i"n:t come ack. So no( the corporation sells the account to an attorney an"
the attorney (rites a letter to Jean. Jean raise" a rule 1& affirmative "efense in his letter ack.
Sho(ing y the accounting (hat the prolem (as an" "escriing the claim he (oul" make in
court.
This attorney:s company is the secon" set of (itnesses acting as the "ata integrity oar" trying
to fin" out (hy you haven:t pai". So you shoul" give them your recor"s so they can compare
your recor"s (ith the corporation:s recor"s an" "eci"e (hose recor"s are correct. @et him
kno( that, one, you "i" not get the note ack, so they are a hol"er, so they are liale on it.
T(o, this (as meant as a set off on the corporate liaility ooks ecause they kept my note.
They shoul" have given him a cash receipt for the note. The (oman in receivales is only
looking at the corporate asset le"ger. That is an affirmative "efense an" a set off claim that the
la( can recognize.
The attorneys company can either go ack to the corporation an" close the case or else, if it
goes to court, this is going to e my affirmative "efense an" my counterclaim in court ecause I
have an asset that the corporation is hol"ing of mine, that they faile" to give me cre"it for.
!here they ma"e their mistake, is that they are likely carrying my asset on a liaility le"ger of
alance from their accounts receivale. !hat I am asking you to "o, as a "ata integrity oar" is
to investigate to "etermine (hich one of us has the most sustainale evi"ence.
The attorney firm (as put there as an opportunity for you to have a secon" (itness to look into
the matter an" settle the account. They "on:t usually have to investigate the information that is
sol" to them y the corporation. They "on:t have any proale cause to elieve "ifferent. In an
a"versarial system, it is up to you to tell your si"e of the story. )very "et collector (rites in his
letter thatA If you have any reason to "ispute this "et, let us kno(. Cou have to sen" them
your claim (ithin 15 or &5 "ays. ?o not argue or create a "ispute. Simply give them the facts of
your "efense.
Jean put in his note: % promise to pay, an or"er to pay an" a notice of ten"er of payment an"
aske" them to cre"it it to the accounts receivale. +e shoul" also have aske" for a cash
receipt. It (oul" e frau" if the corporation kept after Jean, so they sell the receivale to a thir"
9
party that "oesn:t kno( the (hole story. They are a ne( party. !hen a ne( party comes after
you, they have no stan"ing un"er the #$$ to "o it. *ut if you argue, it causes a ne(
controversy. %ll you "o is present your claim that sho(s you are the cre"itor in the transaction.
The ne( hol"er has to e the "ata integrity oar". So he is your est opportunity to settle an"
close. ?on:t ignore him.
The I-S has a notice of lien or levy. It is a charge or notice of interest. ?on:t argue (ith them.
Cou shoul" reut it un"er civil rule 1&. .ther(ise it stan"s as fact an" they "on:t have to prove
anything. The government an" their agents are here to test us. If (e (ant to pass the test, (e
shoul" have a claim for set off. !e must act like cre"itors, not "etors. Jesus pai" for all our
"ets.
Jean "i" the Hotorial protest on the note. It ecomes the evi"ence that you put in your claim. It
is critical that you register the note on a #$$&, to make it a pulic recor". Oictoria use" a note
to "ischarge her parole. +o(ever, she "i" not register the note on her #$$&. So it (as never
recognize" in the pulic to settle an" close the matter. So her charge (as sol" to a +ong ,ong
company (ho re>uires a (ante" notice maintaine" on her as their notice of interest.
Cou "on:t nee" any evi"ence to issue a notice of interest. I-S notices of lien or levy are Gust
notices of interest. Cou have 15 to &5 "ays to respon" (ith a counterclaim. If you "on:t
respon", they have a claim y "efault. %rguing creates the I-S claim y "efault. !e are a
cre"itor (hen (e "ischarge the "et, ut (e never respon" timely (ith a counterclaim to sho(
(e are a cre"itor. Since the I-S is Gust a "et collector, they are the est place to have a "ata
integrity oar" hearing to settle an" close the matter.
%rguments aout the la( are not counterclaims. If (e "on:t ring a claim, (e lose. If (e
"ischarge the "et, an" they keep the note, (e have a claim as a cre"itor. The note cannot e
intro"uce" as evi"ence of the claim. If they kept the note (ithout giving a receipt, your recor" is
the #$$ registration of the note. ?on:t put the invoice %-4O on the #$$. It is a liaility not an
asset. The *.) ecomes a registere" security un"er #$$ article ', (hich are superior to other
#$$ articles. The court (ill not look at any security that is not registere" in the pulic.
Cou shoul" register your ank mortgage note on your #$$ &, to estalish a claim. The
mortgage note is a security an" it is never registere". The finance system is "ealing in
unregistere" securities. They cannot take an unregistere" mortgage note into a court for
foreclosure. They never pro"uce a note in a foreclosure ecause it is evi"ence of their liaility
an" not cognizale in court. !e are the cre"itor on the mortgage note, so (e shoul" register it.
%s soon as (e register the mortgage note, (e ecome the cre"itor in the foreclosure case (ith
the highest interest.
If (e ten"ere" a *.) to settle an" close a criminal case, it shoul" e registere". The clerk
never gave us an accounting for cre"it. So they (ill ignore it ecause (e "i"n:t make a rule 1&
counterclaim. !e must register the *.) on a #$$& an" ring a #$$11 in as a counterclaim.
%ll other arguments "o not matter ecause all la( is an allusion. They converte" everything to
a commercial transaction at the eginning of the case.
8eople have file" #$$ liens listing the ank as the "etor. The "etor shoul" e the prepai"
account at the Secretary of Treasury of 8uerto -ico. The stra(man shoul" e a thir" party
cre"itor ecause he is a ailee on another filing. The living man "oes not appear in their
system, so the stra(man has to e the cre"itor. %ll parties on a #$$ filing have to e a fiction,
not living. The SSH is the account numer. The living man is responsile for all transactions.
10
!hen Jean sent his claim to the collection agency, they ha" the fi"uciary responsiility to go
ack to the corporation an" ask to see the off alance sheet liailities le"ger to check out the
claim. !hen you give them notice, they have to go to "iscovery un"er civil rule 11. +e has to
fin" out (ho is responsile for the accounts payale le"ger an" (hat "i" you "o (ith the cash
receipt for his "eposit. I (ant to see your 1566-.I?, statement 63 cash flo( statement an" your
alance sheet. Jean (ill not likely hear from these people again. Jean presente" a cre"ile
counterclaim. The note (as an asset to him an" a liaility to the corporation an" they "i"n:t
account for it.
The "et collector can:t resell the receivale no(, ecause he has ha" notice. The sale (oul"
not have een in goo" faith. The (oman in the original company (as operating in ignorant
goo" faith. She only sa( half the ooks. Cou may have to go through the a"ministrative
proce"ure against him if he ignores your claim. %fter he has seen oth si"es of the ooks, he
(oul" e operating in frau". The )nron e=ecutives that got in troule (ere the ones that sa(
oth si"es of the ooks. Securitization is frau".
Some companies pass the receivale on to fourth of fifth parties so they coul" have clean
han"s. *ut no one ever tol" them aout the secon" set of ooks. !e have not given them a
registere" security. There is no evi"ence in the pulic recor". They can carry the allusion that
your instrument is (orthless, forever. If (e "o not un"erstan" that the collection agent only
sees the receivales an" not the payales, (e (ill fail to state a claim. This puts us into
commercial "ishonor, (hich gives them the option to take us into court to force us to pay in
/e"eral -eserve notes. So the first court case is actually an appeal from the a"ministrative
process. .ne is not allo(e" to intro"uce a ne( claim in an appeal. The factual hearing (as
(ith the collection agency. !e are foreclose" from ringing our claim.
.ne must raise the claim at the appropriate time, or you have not e=hauste" your
a"ministrative reme"ies. !e nee" to get a "ata integrity revie( hearing or a secon"ary hearing
ecause (e have ne( evi"ence to e a"Gu"icate".
The Truth-in-len"ing act ;TI@%<, section 229.2&, (hich is regulation L, gives one the right to
rescin" any commercial "et contract or agreement entere" into. %ll commercial contracts for
cre"it or loan provi"es for F2 hours to "o a rescission. That can e e=ten"e" for three years
from the "ate that one "iscovers that one "i" not have full "isclosure. In %ppen"i= +, it says
that this regulation L "oes not apply to resi"ential mortgage transactions. +o(ever, once
foreclosure has een initiate" on a mortgage, one can rescin" it ifA
;a< they "i" not "isclose the right to rescin" at closing un"er %ppen"i= +. They never give the
proper notice at closing. So one coul" rescin" every mortgage contract at foreclosure. They
give this option ecause one coul" have registere" the note on a #$$, one (oul" e the
cre"itor any(ay, an" so they can:t foreclose. -escission completely "ischarges the security
agreement ;the mortgage "ee" an" the mortgage contract<. .ne can ask for the entire amount
of the mortgage note returne" in the form of cash.
They shoul" have given you the cash for your note at closing an" close" the (hole transaction
(ithout continuing payments. The house (as pai" for at closing (ith your negotiale instrument
on one set of ooks. They "i"n:t give you cre"it for the note ecause you "i"n:t register the
note an" sho( a claim. If you "on:t register the note, they (ill not give you your property ack.
They can:t give you the note ack ecause they sol" it. So, they shoul" give all your payments
ack.
11
7o" has given us a prepai" account so (e never have to go into "et, if (e are honorale. !e
shoul" pay for everything (ith a promissory note.
%ll homes are legally aan"one" ecause no one has ma"e their claim for the money that (as
o(e" to them. .ne shoul" have claime" the house at closing ecause the note pai" it for. The
ank has no claim. There is a thir" party that ought the note from the ank an" hol"s an
interest in the note.
/oreclosure is "amage, so they have to give notice an" the right to rescin". The notice of
rescission is sent y certifie" mail. %s soon as (e "o that they try to claim that -eg. L "oesn:t
apply to resi"ential mortgages. In the In -e: Ia=(ell case, the o(ner repeate"ly aske" for
"isclosure. !e use" this case as a foun"ation for our case on the groun" that the mortgage
transaction (as an unconscionale act. !henever there is a lack of "isclosure, one has an
offset availale. This is "angerous to the entire mortgage in"ustry, ho(ever, a fe( cases is not
going to cause a ig prolem. If most people (ant to e ignorant, an" e slaves to the anking
system, they have the right to "o that. Ho attorney (ill make this type of claim ecause it
Geopar"izes the system that he (orks for. Hor (as the attorney tol" (hat to "o y the client.
-egulation L sho(s the form in (hich the ank is re>uire" to give notice of rescission. They
never give you notice in that form. They a(ar"e" the o(ner, E4F3,555 in punitive an" actual
"amages from the ank. 8lus, they rescin"e" the contract. They sai" the contract (as
unconscionale un"er #$$ 2-&52.
.ne also ha" the right to rescin" if the property is on a floo" plain that (as not "isclose". Iany
ne( floo" plains have een "eclare". The (hole state of .hio is surroun"e" y navigale
(aters un"er #S$ Title && an" is a floo" plain. !here the high (ater mark goes, one is suGect
to a"miralty maritime la( provi"ing /e"eral Guris"iction. It is cause" a hazar" area un"er Title
42 #S$ 4512;a<. /)I% "efines the floo" plain. There (as no floo" insurance on the property
(hen the loan (as originate". It is not possile to take out a loan in a floo" plain area (ithout
floo" insurance. That voi"s the contract.
The claim or affirmative "efense is that this is another groun" for rescission. They never
"isclose" that the property (as in a floo" hazar" area an" there (as no floo" hazar"
insurance. That is a violation of #$$ &-45F, a material alteration to the original contract.
The government is trying to e=pan" the "efinition of (etlan"s an" floo" plains. This is relate" to
securitization in (hich they transform negotiale instruments into securities. They move them
from #$$ article & to article '. .hio co"e section 1F5F.51;< a promissory note is "efine" as a
security. So one can use rescission on it also. #n"er .hio co"e 1F5F-291 one has the right to
restitution an" rescission (hen they sell an unregistere" security. %s soon as the ank gets
your mortgage note, they sell it. *anks register mortgage "ee"s, not mortgage notes.
Oictoria gave a note to the county to "ischarge her criminal case. The county likely "eposite" it
in a ank an" receive" a cash receipt. The ank likely sol" it as an unregistere" security. This
provi"es Oictoria (ith another reme"y. *ut she nee"s to register it on a #$$& efore it can e
use" as a claim.
)H? ./ S)8T)I*)- 1' I))TIH7
12
Securitization 3
*anks securitize mortgages y selling them to a S8O ;a special purpose vehicle, a trust<. Then
they create on"s of trust assets to sell to ?T$. The ank cannot foreclose on the note,
ecause they are not a hol"er an" lack stan"ing. +o(ever, the mortgage contract re>uires
payments. This makes the note non-negotiale. They are foreclosing on the contract un"er
common la(, not the note. The ank claims to e hol"er in "ue course, ut that is not possile
for there to e a hol"er in "ue course of a non-negotiale instrument. Hon-negotiale
instruments are governe" y common la(, not the #$$.
S8O- % special purpose vehicle, an organization constructe" for a limite" purpose an" life.
/re>uently these S8O:s serve as con"uits or pass through organizations or corporations in
relation to securitization. The entity that hol"s the legal rights over the asset transferre" y the
originator.
The originator of a mortgage is the living man. If he is the originator, the S8O ecomes the
legal hol"er (hen the "ee" is signe". The ank is acting in the capacity as a servicer. !hen
you are involve" in a foreclosure case, the stra(man creates an allusion. Ho party is real. So
the real parties in interest are not involve" in the court. The ank may e name" as the plaintiff
on the foreclosure is the servicer. The real party in interest is the S8O.
8atriots usually ask the plaintiff to pro"uce the note. The note is not a negotiale note ecause
it has terms an" con"itions associate" (ith the instrument (hich coul" lea" to a >uestion as to
(hether the terms an" con"itions have een met. % negotiale instrument can have no
restrictions, terms or con"itions.
.ne, the note is non-negotiale. T(o, it is never registere" in the pulic. These instruments
cannot appear in a court. If it (as rought into court, the Gu"ge (oul" see that it is not
registere", an" (oul" claim he has no suGect matter Guris"iction over your claim. Secon"ly, it is
not negotiale, so it "oes not come un"er the #$$ negotiale instruments act. $onse>uently it
comes un"er contract oligations, so the appearance of the note is immaterial an" irrelevant.
)specially since it (as never registere" in the pulic.
The ne=t prolem is, since the note is not registere", (hat stan"ing "oes the plaintiff, ank,
have to e there. #n"er the #$$, the plaintiff has no stan"ing if he is not a hol"er in "ue
course. The plaintiff is not there on the note for several reasons. It also sho(s that the ank is
liale an" the originator is the cre"itor. The note is an asset to the "efen"ant, (hich is a
counterclaim for recoupment. It "oes not support the anks case.
*efore closing the note goes into an S8O (hich no( has legal title to these issues an" it
creates a ne( instrument in the place of the note. They create securities an" on"s, (hich are
registere". The plaintiff is representing the registere" security an" on" at closing. They are
hi"ing the pea un"er several shells so you "on:t kno( (here it is. This keeps the patriots from
making the proper claims.
Jean Keating:
The statute says you have a right to restitution an" rescission if they sell an unregistere"
security, .hio statute 1F5F-291. Is the note an unregistere" securityB It is a non-negotiale
instrument. !hen they convert it into a security, it takes it out of #$$ %rticle &. It coul" e
un"er #$$ article 4 ecause it is "eposite" in a ank. *ut eventually, after it has gone into the
S8O, an" een securitize", it is move" to #$$ %rticle ' an" %rticle 6 is applicale to the
13
reme"y. They have to give you the right to rescission ecause it is unregistere". So, they
le"ger that you no longer have a liaility y giving you the setoff. So they are follo(ing the la(.
*ut they are keeping the recor"s in t(o "ifferent sets of ooks like the Iafia.
!e are follo(ing the letter of the la( an" sho(ing them (hat they are "oing. !e have a right to
rescin" an" restitution, (hich is also part of recoupment. !e can go to the H%S?, the national
association of securities "ealers, they have an aritration an" resolution oar" locate" in HC$.
They have triunals in each state for hearings. Cou can go to aritration an" have the contract
rescin"e" an" get restitution ecause they are selling unregistere" securities. I have e=amples
of four recent cases from 2553 an" 2559. 8eople have purchase" promissory notes an" foun"
out they (ere unregistere" securities. There is case la( on this. This is money laun"ering or
-I$..
*ut there is a statute protecting us. Since, as soon as they sell the unregistere" security, (e
are entitle" to setoff to settle the claim. !e are raising this claimA (e have not (aive" it. They
have not a""resse" our claims or "efenses, so (e have groun"s for appeal. The la( re>uires
them to "o this ecause they have raise" it. .ne can stop any mortgage on this asis.
They (oul" e etter off if the Gu"ge gave you a reme"y on other groun"s. !e have given them
several groun"s for rescission. They can also allo( rescission ecause the property is in a
floo" plain. Their attorney sai" that if (hat (e are saying is true, it (oul" "estroy the mortgage
market. !e ha" an attorney say the same in her plea"ings fifteen years ago, an" then she (as
taken off the case. I "on:t think they like attorneys saying those things in pulic.
/e"eral court through out our -I$. complaint initially. I rought up the /%S* an" I%S*
stan"ar"s an" regulations in appellate court. I correcte" them from stating that the ank is the
cre"itor. That is only true on the receivale si"e of the le"ger. !e are the cre"itor an" they are
the "etors on the liaility le"ger. That provi"es a reme"y. The 7F has en"orse" it. Ho( (e
are getting into international la(, (ith the I%S* stan"ar"s that they have a"opte". These
stan"ar"s say (e have a right to setoff.
So, like the Iafia, they al(ays have a secon" set of ooks that are not availale to the pulic.
They only use the pulic ooks (hen they make a claim against us to "etermine ho( much (e
kno( aout our claims availale on the other si"e of the accounting. It is up to us to ring this
claim or (aive our reme"y. Iost $8%:s are not familiar (ith these issues, ecause they "on:t
have to "eal (ith them.
*ank .ne uses ,8I7 to au"it their ooksA others use 8rice !aterhouse. They are
international au"iting services. They are e=pert at au"iting off alance sheet accounts. There is
off alance sheet financing, payales an" receivales. These au"itors are the only ones that
are a(are of these issues. Scott Tau is the chief accountant for the S)$ an" his assistant.
They confirme" my information. The S)$ is also the enforcement agent for this practice,
ecause it involves securities. +e a"mitte" that this is their practice. +e (ante" to kno( (ho I
(as, ut I "i" not tell him.
.ne ank au"itor (ante" to kno( (hy I (as asking these >uestions. !hat "oes (hy I am
asking have to "o (ith these >uestionsB %re you going to tell me (hat you are going to "o (ith
my noteB ?on:t I have a right to kno( (hat you are "oing (ith my note if I go into usiness (ith
youB )veryo"y thinks a note is a liaility, ut it is not. #n"er #$$ 4;a<, 154;c<, it says that the
originator is the sen"er of the first fun" transfer. !e are the first fun"s transferor. #$$ &-153;a<
14
;c<, susection ;a< talks aout issue an" ;c< talks aout issuer. It "efines the issuer as the
transferor of the first fun" transfer, (hich is the "ra(er an" the maker.
#$$ '-152 ;12<, ;13< an" ;6< that "efine" (hat an entitlement hol"er is. #$$ '-153 that says
(e are i"entifie" as the person (ith securities an" entitlement right on the ooks of a anking
interme"iary. They call them interme"iaries un"er %rticle '. This practice is all un"er %rticle '
ecause it involves securities. That is ho( they are hi"ing their practices. They are treating
these notes as securities an" not %rticle & paper. #n"er %rticle ' (e are the hol"ers of
entitlement an" possessory rights to the procee"s of the transaction ecause (e are the
originator of the first fun"s transfer on the accounts payale si"e of the le"ger. !e are entitle"
to the fun"s.
% promissory note is an asset to us. !hen (e give it to a eneficiary an" he "eposits it, it
ecomes a cash item to the ank. They issue a cash receipt to the "epositor. The ank gets a
cash receipt that is the e>uivalent of money. It is (hat passes for money in the society. They
(ill tell us that our note is not cash. *ut after it is "eposite" it looks as if (e "eposite" money in
an account.
This is a cash procee" un"er Title 12 of the #S$. !e are the cre"itor an" (e are not ringing
this up as a "efense. This is (hy there cannot e a hol"er in "ue course.
#$$ &-&52 "efines a hol"er in "ue course. It says in the first paragraph that this section a
hol"er in "ue course is suGect to &-159;"<. That says that (here an instrument is involve",
there cannot e a hol"er in "ue course. The reason they can:t is ecause they are taking it
suGect to the "efenses an" claims that the "ra(er an" maker as the originator of the first fun"s
transfer can ring against the payee, (hich is the ank. The reason there can:t e a hol"er in
"ue course is ecause (e are the cre"itor an" (e can trump any claim that a hol"er might
have on that instrument.
The claim that the originator an" maker can make is setoff ecause they sol" an unregistere"
note. They cannot e a hol"er in "ue course ecause they are taking it suGect to a"ministrative
an" commercial claims, every time there is a clause in the instrument. They create a mortgage
purchase loan ;19 $/- 4&&.1<. This (hole process is not aout mortgages at all, ecause they
sol" the note an" receive" the fun"s an" close" the account y assuming they have repai" the
originator on the loan. If they alrea"y repai" the originator on the loan, the living man (ho
signe" the note, then the (hole thing is close". !e got our money ack.
!e "i" not receive the money or ask for the note ack. So the ank transaction on the
payales si"e sho(s that (e rought the money in, they cre"ite" it to our account so they pai"
it ack, (e "on:t have a claim against the ank. It staye" in the account, ecause (e "i"n:t
claim it. So they assume it has een aan"one". % trustee of aan"one" assets (oul"
normally invest these assets to make money on them. They are e=pecting rent for this property
from us. !e are not paying monthly payments of principal an" interest, ecause the loan has
een pai" off.
!e are paying rent for the asset (e faile" to collect. The S8O is taking all the payments as
profit. It is un"er contract an" has nothing to "o (ith notes an" contracts it en"s (hen the
original contract is finishe".
15
If you stop making payments, no one has een "amage". The only reason the anks continue
to collect for &5 years is ecause you are a fool. !e are responsile for agreeing to this
contract. !e "on:t have a claim for frau".
!e "i" the first fun"s transfer that they transferre" to the receivales as an asset to the ank.
!hen they "i"n:t give the note ack, the ank sol" it or "eposite" it as a cash item. #$$ 1-254
says (e are consi"ere" as merchants at la(, (ho kno( (hat (e are "oing. !e act as though
(e are e=perts at negotiale instruments. That is ho( they get aroun" the "efense of frau" in
the in"ucement.
To prove frau" in the in"ucement, one has to prove he "i"n:t kno( (hat they (ere "oing, an"
"i"n:t have sufficient time to fin" out. *ut in or"er to prove that, you have to learn ho( to "o it
right first.
They call their process "e-recognition. *ut most of the time that is not true. If they pass the
re(ar" an" the risk, a complete sale of the asset, it is "e-recognition. ?e-recognition is "efine"
in accounting as not recognizing it on their ooks any more, or remove" it off the alance
sheet. This means they e=tinguishe" the loan from the ooks. !e are asking for the alance
sheet in "iscovery. The alance sheet (ill sho( that the loan has een e=tinguishe". They are
trying to collect on a note that they have no right title or interest in.
8impco on *on"s, using the real estate is not the mortgage loan. It is use" to securitize the
commo"ities an" securities e=change. They are not using mortgages to attach property,
ecause it only appears that they got an interest to attach the property. !e have the priority.
Their real intent is to create "erivatives to create a security an" on" market to finance all
commercial an" corporate activity. Tying up the lan" is a profitale y pro"uct, ecause noo"y
un"erstan"s that they "on:t have a claim for it. They are calle" eneficial interest hol"ers
;*I+S<. Those are the organizations (ith an account (ith the ?T$ to uy the mortgage-acke"
on"s, (hich are the poole" assets from the +)@.$ or trust.
)H? ./ J)%H T-%HS$-I8T
Victoria Conversation:
There is no "ifference et(een a civil case, a criminal case or a mortgage "ee" an" mortgage
loan purchase. Oictoria ha" a couple of traffic cases ack in the early 1665:s. Oictoria (as in Gail
for a (hile. She (as Gaile" for si= months in 2551 ase" on a personal complaint, ut they
"iscovere" an ol" (arrant for her arrest. She attempte" to get the fe"s to prosecute the county
un"er Title 42 ecause the Gu"ge ha" sai" that the (arrants ha" e=pire". She settle" an"
close" the proation (ith a note.
*ut she recently foun" an ol" (arrant poster on her on the Internet. She foun" out that a +ong
,ong investment company purchase" her criminal case on". It is possile that she "i"n:t have
stan"ing to ask for a Title 42 la(suit, ecause she ha" not file" a aileePailor agreement an"
therefore, she (as not a cre"itor. .ne must e a cre"itor to make a claim. )veryone to"ay is
presume" to e an enemy of the state, a #.S. citizen. This game is playe" in a"miralty maritime
commercial la(. !hen you file a #$$1 ailorPailee you are saying that I (ant to e a cre"itor.
% cre"itor in an a"miralty transaction is the same as a sovereign (ith inalienale rights in
common la(. It is a (ay of coloraly stating that I have stan"ing as a cre"itor to get a reme"y.
16
Cou are the cre"itor in their payales ooks. %s a slave, you can only plea" guilty. *ut (ith out
the #$$1, you "i"n:t have any "ocuments to sho( that you coul" come in as the cre"itor on
the liaility account of the corporation. If you can come in (here the "efacto government o(es
you instea" of having the "efacto government claim you o(e them, you have a counterclaim for
a set off. 8atriots (ant to use the common la(, ut the government is focusing on you as a
"etor y a voluntary contract of servitu"e. The government treats you like a slave unless you
kno( enough to un"erstan" ho( a slave can pay off his "et an" get his lierty an" free"om.
They are speaking in a "ifferent language so (e "on:t un"erstan", asking for our lierty
presuming (e "on:t have a "et. !e languish in a foreign Gail ecause (e cannot un"erstan"
the reme"y.
+o( "o I get them to ackno(le"ge this so I can come in (ith stan"ing as a cre"itorB ?o I sen"
a precipe to the clerk seeking his ackno(le"gment an" his appointment of this attorneyB She
has not receive" an ans(er ack from the Secretary of State of 8uerto -ico ackno(le"ging her
filing. If there is no filing numer, (hat "ocument "o I have to sho( there is a *P* agreement to
give me stan"ing in the court to "irect the Title 42 action to appoint an attorney to go after the
state for its unla(ful actions against the stra(man ecause they "i"n:t have a vali" (arrantB
.nce you "o your *P* filing sho(ing the relationship, then you can ring that "ocument in. Just
like the collateral eing the note in a foreclosure case, the collateral in the criminal case has to
e our signature on our note that (e gave them in the criminal case for the settlement an"
closure. That is your claim in that criminal case. The note (e gave the ank (as the claim in
the foreclosure case. That is your asset. .ne shoul" not put the in"ictment in the collateral on
the #$$, ecause it is a liaility to you an" an asset to the corporation. It is their account
receivale. The I*.) that you sent them is your asset an" it constitutes your claim.
Oictoria gave them an I*.) to settle the case. They have not returne" the note or settle" the
account. This is Gust like the ank mortgage. The mortgage "ee" is still recor"e" after you gave
them the note. *ut (hen you gave them the note, they close" the account. *ut then they sol"
the note for other investments to other corporations off the alance" sheet in the ackgroun".
+o( can you sho( them that you have an ongoing interest in that note to settle that accountB
+ave you een making monthly payments to sho( an ongoing interest in the noteB
/or an e=ample: you purchase" real estate. They give you a "ee". They recor"e" the "ee".
Cou got the mortgage "ee", you got the mortgage note an" you got the mortgage contract. The
mortgage "ee" is superimpose" on top of the "ee". The mortgage "ee" has priority ecause it
(as file" last an" it is se>uence" (ith the same party that is on the "ee". The pulic looks at
the mortgage "ee" an" it appears to e a legal, lien hol" interest in the property. It is not a
negotiale note.
% /e"eral -eserve note is a negotiale note that is registere" as a security. So the /-H
passes in the pulic. If you "eposit a /-H (ith a "eposit slip in the ank, the ank accepts the
"eposit as a cash item an" they give you a cash receipt. They "o not "o that (hen you give
them your note, ecause it is non-negotiale an" not registere" in the pulic. So the transaction
"oes not appear on the pulic si"e of the ooks ecause there is no pulic registration. It "oes
appear on the private si"e of the account ecause the note is private. !hen your note comes in
to the ank, they offset the private si"e of the account, ut they can:t offset the pulic si"e
ecause it isn:t registere". So it cannot appear in the pulic si"e to offset the pulic si"e of the
accounting.
17
!e use monthly payments to sho( the pulic that (e have interest in that property. @egal title
to the note has een transferre" to the S8O. So you no longer have legal title to the property.
!e must use the monthly payments to sho( (e have claim to the property, ecause it (as our
o(n note. !e make monthly payments on the mortgage an" the utilities an" yearly payments
on ta=es. If (e (ere not paying those, (e (oul" have no receipts to sho( that (e ha" any
continuing interest in the property.
If (e file" an interest in the property as a cre"itor, (e (oul" not have to make all those monthly
payments in the property. !e can choose to e a cre"itor or "etor. *ut if you are a "etor an"
stop making payments, the presumption (ill e that you are aan"oning your interest in the
property for possession an" use. Cou alrea"y aan"one" the legal title. The ank can step in
an" take over ecause of another level of aan"onment.
!hen the mortgage "ee" is still recor"e" in the register ut (hen you gave them the note they
close" out the account. Then they sol" the note for other investments to other corporations off
the alance sheet in the ackgroun". +o( "o they prove that you have an ongoing interest in
that note that you gave them to settle that account. That is (hy you make monthly payments on
that note that you aan"one" to sho( that you have an ongoing interest.
Cou have to provi"e an application (ith a name, a""ress an" an SSH to sign up for a utility on
the property. The SSH is the trust account that is prepai". So you sign up for your utilities (ith
your prepai" account. !ithin &5 "ays, instea" of giving them a *.) on the prepai" account,
you keep coming in (ith liaility notes to keep sho(ing a "etor interest rather than a prepai"
interest on the account ecause you fail to register. The application for the utilities is the
e>uivalent of signing a negotiale instrument or a private note, ecause your unrestricte"
signature (ith the account name an" numer is e>uivalent authority for the utility to keep
"ra(ing off of your prepai" account to run their corporate utility usiness. Cou sho( a
continuing monthly interest y your ill paying (ith liaility notes. If you try to pay (ith a *.),
you shoul" register the original contract you signe" ecause that is the e>uivalent of the
unlimite" cre"it access to the prepai" account. That is your asset in that transaction. If it is not
registere", you can:t sho( that the pulic shoul" settle the pulic si"e of that accounting. If you
sen" them a *.) that is unregistere", they (ill not accept it. They cannot see any pulic si"e
to your *.).
Oictoria has not een making monthly payments an" she put the three criminal cases on a
#$$ filing. The *.) that you gave them in the criminal case is collateral. The case is not an
assetA the case is a forum to settle the transaction. The note shoul" e put on the #$$. The
criminal case is not settle" ecause you have not ma"e a claim. Cou have not put the note as
collateral on the #$$.
Cou are like a person in a mortgage foreclosure case that stops making payments an" has not
sho(n a continuing interest in the property y any filing in the pulic. Ionthly payments (oul"
have een a monthly filing of a notice of interest. % notice of interest (ill e=pire if you "on:t
rene( it. The ank is foreclosing on you for presume" aan"onment of the property. Cou "i"n:t
recor" your asset, (hich is your mortgage note that you gave them to egin (ith. The mortgage
note is an asset to you an" a liaility to the ank an" you "i"n:t recor" the note, to make it a
security registere" in the pulic. Therefore it is not cognizale y the pulic court system to give
you a reme"y (hen the ank "i" not close the full accounting (ith you at your escro( closing
(hen you rought the property an" (hen the note (as close" off the anks ooks on their
liaility si"e, you have no pulic claim.
18
+o( can you claim the note as an asset (hen you give it to themB The note is an asset, like a
la(nmo(er. If you give it to someo"y, they o(e you something ack. Cou are the cre"itor in
the transaction. Cou (ere the originator in the transaction. !hen you uy a house, you sign a
mortgage note to the ank. Cou are the cre"itor. ?i" you give the court a *.) to settle the
account in the current caseB That (as an original instrument therefore you are the cre"itor.
They o(e you a receipt or a cancele" check. @ike -oger )lvick use to say, you shoul" receive
a check. They "i"n:t give the *.) ack to you, ecause first, they close" the account on one
si"e other(ise they (oul" e involve" in frau". *ut you "i"n:t ask for the note ack an" they
presume you "i"n:t make a claim, it is a valuale asset, so they sell it to someone else. So
someone else has a claim on that note that Oictoria use" to settle her criminal case. Someo"y
is hol"ing it. They ought it from the state.
*ut they close" your account, the charges in criminal courtA ut only on one si"e. The case isn:t
settle" ecause they haven:t applie" the fun"s from the note to the other si"e. They have not
given you cre"it for your asset on your liaility to close the full account. Cou have not ma"e a
claim. The receivales si"e is still open ecause the note "oes not sho( any pulic registration.
They close" the private si"e that you gave them the note for, ut you "i"n:t get it ack, ecause
you "i"n:t claim it so therefore, they sol" it again. So they are still trying to collect the
receivales, they sol" her asset to another company that hol"s her asset, so she "oesn:t hol" it
an" they are using the asset to create even more fun"ing to run the corporations (ith.
This is ecause they "i"n:t ask them to give the note ack an" you "i"n:t sho( that you have a
pulic claim. Cou can ask the ank all you (ant to give your note ack. The ank is not going to
listen to you, ecause they assume that you are a "etor an" they have no "ocument of
stan"ing to sho( you are a cre"itor to ask for the note ack. If (e ha" registere" it, (e coul"
certify it out of a pulic office, (hich they are re>uire" to accept.
Just like you tol" the la"y in the foreclosure suit, put the note that you gave to the ank that
they are using in the foreclosure, as collateral on the #$$ filing. !hen she sho(e" the filing to
the Gu"ge, it sho(s I have a continuing pulic interest in the property. If you are not making the
monthly payments, you have to have a instrument that sho(s you are still making a claim on
the property. I am a cre"itorA I have this #$$ lien. It sho(s that I am a cre"itor (ith the property
as collateral. I am the highest-level cre"itor on the property. The Gu"ge sai", .k, it looks like
you have priority.
The reason they still have a (ante" sign for Oictoria is ecause you gave them the note, they
settle" the private si"e, so she "oesn:t o(e them any more for the crime. They settle" on the
private si"e, they "i"n:t give her the note ack, (e hel" it, she "i"n:t sho( she ha" a claim to
get it, ut (e have settle" the sustance of the criminal charges. So they settle" the one si"e
(hich is their liaility si"e, (hich means they "on:t o(e her any more, (hich means they
recognize the sustance of (hat she gave them. *ut if they gave it ack to her, none of the rest
of the transactions coul" continue, ecause everything is ase" on her cre"it line. So they ha"
to create a presumption that they "i"n:t have to give it ack to her. .ne, she "oesn:t have a
registration that sho(s she is a cre"itor an" ecause it isn:t registere", (e can:t close out the
pulic si"e. Since (e can:t close out the pulic si"e, (e may as (ell not give her, her note ack
an" (e (ill sell that note to another corporate entity that can use it again any(ay ecause she
"oesn:t kno( to ask for it.
They close" the one si"e Gust like the ank "i" the mortgage at closing in escro(. They "on:t
(ant to hol" any money any more. This (hole thing is "one, ut she never came an" aske" for
19
her money (ith stan"ing, ie, the note that got cancelle", so conse>uently (e (ill sell this
liaility to some other corporation as their asset. Ho( you have the right to make the claim that
you are the ultimate claim on the closing on the criminal account. I (ant the case settle" an" I
(ant the (ante" poster "o(n.
They cannot take the (ante" poster "o(n yet, ecause there is a silent party in the ackgroun"
that hol"s the note. Cou "on:t hol" it. Someone else hol"s it, so someone else has a claim, an
account rea"y for collection as a cre"itor. The company in +ong ,ong that ought the account
receivale is the cre"itor (ith a claim in this case. The (ante" poster is still up to sho( the
investor:s pulic interest in Oictoria to give pulic notice that they have a claim. If you "on:t
sho( a pulic interest that you have a claim, you have aan"one" it an" they are going to
come in for collection in court. If Oictoria isn:t making the proation monthly reports, the +ong
,ong company (ill ring her in. They are not going to sho( up in court. The county (ill sho(
up in court to press charges as the servicing ank on the account that (as purchase" y an
S8O. The S8O is the con"uit to funnel the money to the +ong ,ong investment corporation.
*ut the investor is the true moving party.
)"gar *ra"ley (as fe"eral proation in (hich he ten"ere" a note to settle an" close. )"gar
kept telling them he (as the cre"itor, (hy haven:t you close" the account. The proation officer
reporte" to the court that *ra"ley (as not meeting the monthly proation re>uirements, an"
aske" to revoke his parole. +e (as rought in riefly to a magistrate in (hich they a"opte" the
recommen"ation of the parole office an" he (as going to sumit it to the Gu"ge. %t that point he
ha" the opportunity to reut, "o affirmative "efenses or counterclaims. The Gu"ge agree" (ith
the magistrate, an" tol" *ra"ley to report ack into fe"eral prison for three months ecause of
parole violations.
)"gar *ra"ley ha" alrea"y sent an I*.) to the fe"s to settle an" close the account. +e ha" not
registere" his *.). So he faile" to make a claim. So they settle" the private si"e, ut ecause
he can:t sho( stan"ing they "i" not settle the pulic si"e of the account. Since they coul"n:t
settle the receivale si"e, they ha" to sell it to a foreign investor to avoi" frau". !hen they
cancelle" the proation, the ne( investor in the ackgroun" (as the moving party.
I assume that they put him in for 65 "ays to see if anyone (as going to prove a claim. !hen
noo"y prove" the claim, they let him out again, (ith three more years of proation. This is
likely the security to protect the investment interest of the purchaser of the pulic account
receivale. This is cause" y the failure to register the note an" file a security interest in the
pulic sector to settle an" close the account.
%"miralty maritime only has authority for e=ecution of sentences for contempt for failure to pay
a "et. +e "i" not recor" his note in the pulic so the accountants can settle their claim.
There is another guy in similar situation as 8ete (ith the state ta= authorities. The state hire"
an attorney to collect the accounts receivale after he ten"ere" a *.). The state nee"e" to
sell the account ecause 8ete gave them the sustance for closing. *ut 8ete is in contempt
ecause 8ete "i" not register his instrument to allo( the account to settle an" close. Therefore,
the punishment is to sell the account to a thir" party investor for collection. They have to put up
some notice of interest to protect the investor, (hich (ill appear to interfere (ith your rights an"
privileges as punishment for you for not allo(ing us to settle the account. They are not
punishing anyone for violating the la(. They are not concerne" aout monthly payments.
20
They cannot take the (ante" poster "o(n ecause there is a silent party in the ackgroun"
that hol"s the note. The (ante" poster is the collateral they are using to support their claim. If
you (ant the poster taken "o(n, settle the claim. They can make a claim (ith an unregistere"
security, ut they "on:t have a "efense if you ring a registere" claim. That is (hy they are not
picking you up, so that you (ill not make that claim. Cour claim (ill close that account "o(n.
They (ant that investor to keep it open an" enGoy the return. They (on:t pick you up ut they
have the pulic notice of interest. % notice of interest "oes not have to e proven unless there
is a claim against it.
Oictoria has een trying to uy a house in %ustralia, ut is hasn:t settle" an" close" yet,
ecause she hasn:t registere" the payment in the pulic. She is concerne" aout a a" cre"it
rating. They give you a" cre"it ratings (hen you "on:t pay your ills ecause you "on:t kno(
ho( the system (orks. Ho one in the #S% shoul" have a a" cre"it rating ecause they have a
prepai" account.
Your Bank Account
Bank Liability
(hidden side)
Bank Asset
(visible side)
Private Off Balance Sheet Public On Balance Sheet
Accounts Payable Accounts Receivable
Promissory Note is Asset Promissory Note is Liability
You are reditor You are !ebtor
Bank is !ebtor Bank is reditor
Livin" La#ful $an%&oman !ead Le"al Personality
Pre'aid Set(Off har"es
21