An Examination of the American Far Right’s Anti-Tax Financial Crimes

• Author: Joshua D. Freilich,Brandon A. Sullivan,Steven M. Chermak
• Published date: 01 December 2019
• DOI: 10.1177/0734016819839772
• Date: 01 December 2019
• Subject Matter: Articles

Article

An Examination of the American

Far Right’s Anti-Tax Financial

Crimes

Brandon A. Sullivan

1,*

, Joshua D. Freilich

2

, and Steven M. Chermak

3

Abstract

Little attention has been paid to ideologically motivated tax protesters who use frivolous legal

arguments as moral or legal justification for committing tax fraud and related financial crimes. These

crimes have defrauded private citizens and governments and are associated with violent far-right

extremism, negatively impacting public safety and stability. Using data from the U.S. Extremist

Financial Crime Database, we provide an exploratory, descriptive analysis of the composition and

motivation of financial crime schemes associated with the American far-right extremist anti-tax

movement. Our innovative open-source database permits systematic empirical research into con-

nections among tax avoidance, anti-tax, and anti-government belief and related criminal behavior,

which is necessary for the advancement of scholarship on the causes and consequences of these

frauds and the development of sound intervention and prevention policies and practices.

Keywords

far-right extremism, tax fraud, ideologically motivated financial crimes, white-collar crime, paper

terrorism, sovereign citizen

This study focuses on a sparsely examined problem at the intersection of financial crime and

political and religious extremism: the far-right extremist (FRE) criminal anti-tax movement in the

United States (U.S.).

1

Financial crimes receive less attention than other types of crime (e.g., violent

incidents). Specifically, tax evasion and avoidance remain a persistent p roblem not prevalently

studied in criminology and criminal justice research (Levi, 2010). Research on tax fraud has typi-

cally centered on wealthy individuals and large corporations due to the vast scale and impact of their

crimes (U.S. Government Accountability Office, 2008). However, tax and other financial crimes are

attractive to all areas of society, including FRE with an ideological belief system outside of the

mainstream’s generally accepted political and religious views.

1

Michigan State University, East Lansing, MI, USA

2

Department of Criminal Justice, John Jay College, New York, NY, USA

3

School of Criminal Justice, Michigan State University, East Lansing, MI, USA

*The author is now affiliated to School of Social Sciences, Indiana University Southeast, 4201 Grant Line Road,

034 Crestview Hall, New Albany, IN 47150, USA. Email: bsulliv@iu.edu

Corresponding Author:

Brandon A. Sullivan, Michigan State University, 655 Auditorium Road, Baker Hall, Room 557, East Lansing, MI 48824, USA.

Email: sulli388@msu.edu

Criminal Justice Review

2019, Vol. 44(4) 492-514

ª2019 Georgia State University

Article reuse guidelines:

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DOI: 10.1177/0734016819839772

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FRE crimes have resulted in many fatalities, injuries, property damage, and financial losses. FRE,

and most prevalently anti-tax extremists, have committed over 600 financial schemes in the U.S.

from 1990 to 2013 (with over 100 more identified since 2014), 59%(n¼359) of which involved tax

refusal and avoidance, resulting in a conservative estimate of over US$1 billion in losses (Sullivan,

Freilich, & Chermak, 2015). Anti-tax proponents utilize various “frivolous arguments,” or alterna-

tive theories of the Constitution and tax law, as a moral or legal justification for not following the

law (Anti-Defamation League [ADL], 2005).

2

Many of their crimes are ideologically motivated,-

stemming from a desire to disrupt the U.S. financial system (e.g., tax avoidance, check, and bank

fraud).

3

These crimes cause tremendous harm to both private citizens and governments while

supporting violence in some cases, representing an area of growing conce rn. State police have

reported FRE as a persistent threat to public safety (Carter, Chermak, Carter, & Drew, 2014;

Chermak, Freilich, & Simone, 2010; Freilich, Chermak, & Simone, 2009).

Since 1990, FRE have committed over 210 ideologically motivated homicides claiming close to

300 fatalities (including close to 50 police officers), as being involved in foiled plots that aimed to

attack over 500 specific or general targets (Freilich, Chermak, Gruenewald, Parkin, & Klein, 2018).

4

Despite the threat to public safety and stability, nonviolent crimes and their relationship to terrorism

have received less attention. Most research on extremism and terrorism focuses on a small number of

high-profile violent incidents while rarely mentioning financial crimes, material support, terrorism

financing, or preparatory crimes committed by ideologicall y motivated offenders (Gruenewald,

Freilich, & Chermak, 2009). This is an important omission in the literature, as these non-violent

crimes committed by FRE should no t be overlooked. Our study address es this knowledge gap

through an empirical assessment of financial crime schemes involving FRE tax protesters in the U.S.

We utilize an innovative open-source database to provide an exploratory, descriptive analysis of

the characteristics of crime schemes and offende rs associated with the American FRE anti-tax

movement. The U.S. Extremist Financial Crime Database (EFCDB), the Financial Crimes section

of the Extremist Crime Database (ECDB), is the only available data we are aware of on financial

crime schemes committed by political and religious extremists. It consists of rich quantitative and

qualitative data on known criminal cases, allowing for systematic empirical research into connec-

tions among tax avoidance, anti-tax, and anti-government beliefs and behaviors. This is necessary

for the advancement of scholarship on the causes and consequences of these frauds and the devel-

opment of intervention and prevention strategies to curtail them (Braithwaite, 2010; Leighton, 2010;

Levi, 2010).

We first provide an overview of the beliefs and criminal behaviors shaping the FRE anti-tax

movement. We then outline our open-source approach, followed by the results of our descriptive

examination focusing specifically on motivations for engaging in extremist financial crimes. We

conclude with the implications of our study for theory and policy, including areas of future research.

Anti-Tax Belief and Criminal Behavior

Anti-tax extremists (also referred to as tax protesters or tax deniers) are a subsection of FRE

ideologically opposed to taxation who use various frivolous legal arguments to justify their criminal

behaviors. The development of extremist beliefs and behaviors is shaped by many factors. Some are

driven by personal political grievance or victimization, while others are motivated by feelings of

strain and oppression from an externa l force threatening their values or identity (McCauley &

Moskalenko, 2008, 2011). Extremists often express feelings of grievance or victimization, where

an individual perceives some injustice has been inflicted on them, someone they know, or a larger

identity group. In this view, the individual adopts extremist views or joins an extremist group to gain

a measure of vengeance against their oppressors. Among anti-tax extremists, the oppressor is an

illegitimate government authority that imposes illegal tax and other laws on American citizens. This

Sullivan et al. 493