In Paper War, Flood of Liens Is the Weapon

“It must be a mistake,” he said, when the loan officer told him that someone had placed liens totaling more than $25 million on his house and on other properties he owned.

But as Sheriff Stanek soon learned, the liens, legal claims on property to secure the payment of a debt, were just the earliest salvos in a war of paper, waged by a couple who had lost their home to foreclosure in 2009 — a tactic that, with the spread of an anti-government ideology known as the “sovereign citizen” movement, is being employed more frequently as a way to retaliate against perceived injustices.

Over the next three years, the couple, Thomas and Lisa Eilertson, filed more than $250 billion in liens, demands for compensatory damages and other claims against more than a dozen people, including the sheriff, county attorneys, the Hennepin County registrar of titles and other court officials.

“It affects your credit rating, it affected my wife, it affected my children,” Sheriff Stanek said of the liens. “We spent countless hours trying to undo it.”

Cases involving sovereign citizens are surfacing increasingly here in Minnesota and in other states, posing a challenge to law enforcement officers and court officials, who often become aware of the movement — a loose network of groups and individuals who do not recognize the authority of federal, state or municipal government — only when they become targets. Although the filing of liens for outrageous sums or other seemingly frivolous claims might appear laughable, dealing with them can be nightmarish, so much so that the F.B.I. has labeled the strategy “paper terrorism.” A lien can be filed by anyone under the Uniform Commercial Code.

Occasionally, people who identify with the movement have erupted into violence. In Las Vegas this week, the police said that an undercover sting operation stopped a plot to torture and kill police officers in order to bring attention to the movement. Two people were arrested. In 2010, two police officers in Arkansas were killed while conducting a traffic stop with a father and son involved in the movement.

Mostly, though, sovereign citizens choose paper as their weapon. In Gadsden, Ala., three people were arrested in July for filing liens against victims including the local district attorney and Treasury Secretary Jacob J. Lew. And in Illinois this month, a woman who, like most sovereign citizens, chose to represent herself in court, confounded a federal judge by asking him to rule on a flurry of unintelligible motions.

“I hesitate to rank your statements in order of just how bizarre they are,” the judge told the woman, who was facing charges of filing billions of dollars in false liens.

“The convergence of the evidence strongly suggests a movement that is flourishing,” said Mark Pitcavage, the director of investigative research for the Anti-Defamation League. “It is present in every single state in the country.”

The sovereign citizen movement traces its roots to white extremist groups like the Posse Comitatus of the 1970s, and the militia movement. Terry L. Nichols, the Oklahoma City bombing conspirator, counted himself a sovereign citizen. But in recent years it has drawn from a much wider demographic, including blacks, members of Moorish sects and young Occupy protesters, said Detective Moe Greenberg of the Baltimore County Police Department, who has written about the movement.

The ideology seems to attract con artists, the financially desperate and people who are fed up with bureaucracy, Mr. Pitcavage said, adding, “But we’ve seen airline pilots, we’ve seen federal law enforcement officers, we’ve seen city councilmen and millionaires get involved with this movement.”

Sovereign citizens believe that in the 1800s, the federal government was gradually subverted and replaced by an illegitimate government. They create their own driver’s licenses and include their thumbprints on documents to distinguish their flesh and blood person from a “straw man” persona that they say has been created by the false government. When writing their names, they often add punctuation marks like colons or hyphens.

A Third Weapon to Save the Euro

The European Central Bank has already promised to use its financial armory to buy unlimited quantities of bonds, and euro zone governments have pledged to fund a bailout “bazooka” worth €500 billion, or $650 billion.

On Friday, Herman Van Rompuy, the president of the European Council, made formal proposals for a third weapon to save the euro — a separate budget for the euro zone, perhaps equipped with a central treasury with borrowing capabilities, to combat sudden economic shocks and promote structural overhauls.

Mr. Van Rompuy did not say how much money such a treasury should manage, and no agreement on that figure is expected when E.U. leaders gather for a two-day summit meeting in Brussels in the coming week to consider his proposals.

The new weapon would differ in important ways from the European Stability Mechanism — the “bazooka” fund that held its first board meeting during the past week — as it would facilitate direct aid, rather than loans, to countries in acute difficulty, said Guntram B. Wolff, the deputy director of Bruegel, a research organization.

“If the money flows from participating countries to a single country in need,” Mr. Wolff said, “then I don’t think this fund needs the capacity to borrow.”

Helping a country like Spain overcome an economic shock might require a sum equal to 5 percent of its annual output, or €50 billion, to support programs like unemployment insurance or subsidies for new infrastructure, Mr. Wolff said.

“But to pay for larger, regional shocks, such a fund would almost certainly need to bulk up its ammunition by going to the markets,” he said.

For Germany, the budget could represent a step toward pooling euro zone finances that does not stir the fears of unlimited liability that poisoned an earlier discussion of so-called euro bonds, which would make euro zone countries jointly responsible for debt.

Mr. Van Rompuy did not rule out euro bonds in his report. But he sounded cautious about the prospects, writing that “the pooling of some short-term sovereign funding instruments” like treasury bills “could be examined further.”

Mr. Van Rompuy also sketched out a separate but related plan to offer countries money or other assistance in exchange for meeting economic targets, the kind of conditionality designed to appeal to Germany.

One “idea to be explored is for the euro area member states to enter into individual arrangements of a contractual nature with the E.U. institutions on the reforms promoting growth and jobs these countries commit to undertake and their implementation,” Mr. Van Rompuy wrote.

“This could include supporting reform efforts through limited, temporary, flexible and targeted financial incentives,” he wrote.

For governments like Spain’s, trying to stave off deepening economic problems, and for France, where many officials are generally in favor of new tools to support the single currency, the creation of a budget, and perhaps a treasury, could be another channel of financial support in the event of a sudden shock.

Mr. Van Rompuy was careful to emphasize the system should “not lead to permanent transfers across countries.”

But Mr. Wolff of Bruegel cautioned that it would be “very difficult to design such a system where such aid transfers do not last for long periods, like five or 10 years, because once money starts flowing, the incentive for countries to carry out reforms does risk being diluted.”