By Clint Parker-
Jan. 23, 2003
Reporter’s note: this is Part One of Two reports about Terry Stewart’s trip through the Federal Justice System here in Asheville, NC.
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.