Reporter’s note: This is the first
in a series of reports about one man’s trip through the Federal
Justice System here in Asheville, North
Carolina.
The Saga of a War Hero
Against The Federal Courts
By Clint
Parker
1/23/03
What kind of Federal Justice System do we have? Many people
ponder just that question and wonder whether there " is any justice
left in the federal justice system?"
Terry Stewart, a
resident of Lewis County, Tennessee, is about to mark his two-year
anniversary in jail. He was convicted a little over a year ago in
federal court in Asheville, NC. He has yet to be sentenced for the
crimes he was convicted of, and he claims that he is innocent. Until
he is sentenced, Stewart cannot appeal his convictions, and
presiding Judge Lacy Thornburg seems to be in no hurry to sentence
Stewart.
Stewart went through the federal court without a
lawyer because his wife, Jeni, said that they couldn’t find a lawyer
in Asheville who had won a case in federal court.
In fact,
according to Jeni, when they were looking for a lawyer to defend
Terry, they called 22 attorneys to check their record of wins at the
federal court level.
Jeni said that not one in the 22 had won a case. Furthermore,
Jeni said the lawyers they spoke with considered a plea agreement a
win. Terry refuses to plea bargain crimes he says he never
committed. So how can a citizen get justice in Asheville’s Federal
Court?
Here’s the first part of a multiple part story in which you can
decide.
Who is Terry Stewart?
Terry Stewart spent 26 years in the Marines. Part of that time
was spent in Vietnam, where he was stationed for almost four and a
half years.
Terry’s military record was impeccable. In fact,
during his career he was awarded two Purple Hearts, a Bronze Star
with combat "V" for Valor, the Navy Commendation Medal, the Vietnam
Cross of Gallantry with Bronze Star, a National Defense Medal, a
Vietnam Service Medal, a Vietnam Campaign Medal with 9 clusters, the
Presidential Unit Award, the Navy Unit Award, and the Marine Corps
Unit Award.
He also got an accelerated promotion, a Combat
Meritorious Promotion to sergeant, a Combat Meritorious Promotion to
staff sergeant, early selection for gunnery sergeant and was a
member of the Superior Performance Group Program. After marrying
Jeni, Stewart retired in October of 1991, as a master gunnery
sergeant from the Marine Corps Air Station Cherry Point, Havelock,
North Carolina, where he was Provost Sergeant.
After leaving the Marines and searching for something interesting
to do, Terry started learning things he didn’t like about the
government he had served for 26 years.
Most of what Terry
learned led him to believe that the government’s taxation of its
citizenry was unconstitutional. Terry also learned how the rich and
famous protected themselves and their assets from lawsuits and
government taxation. "He decided that the domestic enemies [of the
country] were more serious than the foreign ones were," said
Jeni.
Terry wanted to share his newfound knowledge with others, so in
the summer of 1994 he started a business that would help him do just
that and would pay the bills too. Terry and Jeni started conducting
seminars about the advantages of private trusts. Acting as
independent contractors, the Stewarts started selling products
offered by a California-based Commonwealth Trust Company.
During that time Jeni said their tax attorney wrote a series of
letters questioning the IRS about the taxes they might be liable
for. The letters stated that the Stewarts would pay all of the taxes
for which they were liable and to identify which ones they Stewarts
should pay. They received a signed letter from the IRS in 1997
stating the questions were being researched and to take no further
action until they heard back from the IRS. They haven’t heard from
them about their income tax situation since.
Jeni told the Tribune that the seminars she and Terry offered
were informative in nature and anyone wanting to learn more about
trusts could ask. The seminars were also open to the public and
anyone could attend.
According to Jeni, Terry’s seminars
started getting good attendance, including members of the IRS and
the FBI. However, this didn’t seem to worry Terry. "His philosophy
was that he was not saying or doing anything that was untruthful so
therefore he should be safe in what he was doing," explained
Jeni.
Things were going well for Terry until the fall of 1996, when he
met Phillip Mark Vaughan, owner of a Charlotte-based investment firm
named Banyan.
Jeni said that Vaughan told them he specialized
in high yield, guaranteed rate-of-return investments for trusts,
non-profit organizations and other entities.
According to
Jeni, Vaughan claimed his investment group was located offshore and
had no reporting requirements in the United States.
As time went on, the Stewarts and Vaughan started doing referral
business. If someone was looking for a trust, Vaughan would send
them to Terry, and if someone with a trust were looking for an
investment with a high rate-of-return, Terry would send them to
Vaughan or to someone in Vanghan’s group.
However, Terry provided information regarding other investment
opportunities to individuals requesting that type of information.
Jeni said Banyan was not the only investment contact provided
by Terry. Jeni told the Tribune a trust that was managed by the
Stewarts had an account with Banyan, but no Banyan money was ever
deposited into that account other than interest earned by the
account.
According to Jeni, the only other financial dealings the two ever
had was when Banyan, on approximately six occasions, bought lunch
for attendees of Terry’s seminars. Also, Banyan was given a $200
referral fee for people who had been referred to Terry for a trust
and had bought one, which is a Commonwealth Trust Company
requirement for all referrals.
Jeni said that Terry never received a referral fee, nor a
finder’s fee, from Vaughan or Banyan; nor was he ever a Banyan
employee, officer, account signatory or a part of the decision
making process for Banyan activities. According to Jeni, Terry was
not involved in Banyan’s business, nor was Banyan involved in
Terry’s business.
In November of 1999, Terry and Jeni moved
from South Carolina, where they’d been living, to Lewis County,
Tennessee. In December of 1998, one of the trusts they managed
bought a 40-acre farm with an old house at 761 Grinder Creek Road.
In July of 1999 the trust bought an adjacent 5-arce tract at 765
Grinder Creek Road, and the Stewarts moved to that property.
Jeni told the Tribune that the reason for the move was the fear
and uncertainty surrounding Y2K. The farm was in the country and
offered a means of being self-sufficient if predicted problems
associated with Y2K did come true.
Terry and Jeni had checked
all their money out of the bank and placed it in cash and gold and
silver coins that they kept at their home. The amount of money was
approximately $130,000, and represented their entire savings.
The raid
As Y2K came and went without much notice, life returned to normal
for most citizens who had fears about the Y2K bug. The same was true
for Terry and Jeni. They kept the money at their home and went on as
business as usual.
However, the Stewarts were about to receive a
visit from federal agents.
According to Jeni, unbeknownst to her and Terry, Banyan was under
investigation by federal agencies because Vaughan had been using
United States banks to distribute funds to investors.
On
March 28, 2000, the Stewarts decided to go on a family fishing trip
with their son and his family. They left about 8 a.m. When they
returned in the afternoon, they found federal vehicles surrounding
their home and agents inside. Jeni said that the raid included the
Secret Service, FBI and the IRS Criminal Investigative Division.
"There were cars all over the property. All over," said Jeni. "I
believe it was just divine intervention that we weren’t home."
Jeni said that at the same time their home was raided in
Tennessee, Vaughan’s was raided in Charlotte and his stepmother’s in
Atlanta, GA. Why was the government raiding the Stewarts? According
to Jeni, the government believes that Terry was a part of Banyan’s
operation.
Jeni said the warrant was very specific about what
agents were supposed to seize at 765 Grinder Creek Road. The
warrant identified "All records for Banyan International, Ltd.,
(BIL) and the Commonwealth Trust Company (CTC) for the time period
of January 1, 1995, to the present . . ." and gave more details
about documents, records and computer files.
It didn’t include any money.
However, Jeni said the feds
seized the approximately $130,000, even though cash and coins were
not listed on the warrant. When Terry learned that the Stewart’s
life savings were being taken during the search, he asked the lead
agent, IRS CID Agent Michael Boone, why he was taking the cash,
which was not on the warrant. Boone’s response was that he was
just taking it. Terry then asked Boone for a receipt, which
would include a count of the cash and coins and identification of
all money taken. On two separate occasions, Boone denied the
request and he left without giving the Stewarts a receipt, along
with boxes and boxes of the business papers, which the warrant
allowed.
Terry and Jeni tried to assess what all the
IRS had taken from them besides their money. Business records of
course, that were identified on the warrant, but according to Jeni,
lead agent Boone also allowed his task force to remove files
containing all of Terry’s military retirement papers and legal
research, their marriage license, dog’s AKC papers, Social Security
cards, birth certificates, one son’s dependent military
identification card and many other things too numerous to mention,
none of which were included in the warrant’s description of what
should be taken. They also took letters between the Stewarts and the
IRS about their tax liability.
The agents did not
arrest Terry, but his ordeal with the federal government and court
system was just beginning.