Income Tax Evasion Based on Claims of Hawaiian Sovereignty

(c) Copyright 2002 - 2005 Kenneth R. Conklin, Ph.D. All rights reserved

Many people try to avoid or evade paying income taxes.

Avoiding taxes is perfectly legal when accomplished by taking legitimate deductions; or by scheduling income or charitable contributions in such a way as to minimize taxes; or by investing in tax-exempt municipal bonds or drilling for oil and gas.

But evading taxes is illegal. One way some people justify tax evasion is by saying that they are part of a sovereign nation or political entity. Indeed, it is legally correct that enrolled members of federally recognized Indian tribes do not owe any federal or state income taxes on income they earn on tribal reservations. However, non-Indians sometimes organize themselves into fortified private communities behind barbed wire, where they claim to be sovereign; and some individuals claim to have individual sovereignty after "dissolving" all their "contracts" with governments (renouncing citizenship, cancelling social security numbers, etc.).

Hawaiian sovereignty activists, both those favoring Indian tribe status and those favoring total independence, agree unanimously that the overthrow of the monarchy in 1893 was illegal. They agree that the overthrow was the result of an armed U.S. invasion (162 U.S. troops came ashore from a boat in Honolulu harbor to help preserve lives and property during the revolution staged by about 1500 armed local people who were militiamen of the Honolulu Rifles). The U.S. in 1993 passed a centennial commemorative apology resolution for the U.S. actions of 1893, which sovereignty activists regard as a confession to a crime.

The logical conclusion is that Hawai'i is not legitimately a part of the United States. Therefore, citizens (subjects) of (the still-living Kingdom of) Hawai'i should not owe any income taxes to the United States. In addition, if the State of Hawai'i is perceived as an illegal U.S. puppet regime, then State income taxes also would not be owed. Even people who acknowledge that they are U.S. citizens and are not descendants of Hawaiian Kingdom subjects would be entitled to take large deductions from their U.S. income taxes on the theory that income earned in Hawai'i comes under the foreign tax credit because it is income earned outside the United States.

Some people who evade income tax do so as a result of sincere belief in such theories. Many other people who evade taxes merely for personal gain will cynically refer to such theories to rationalize or justify their selfishness. Regardless of motivation, tax evasion is illegal. It forces honest taxpayers to pay higher taxes to provide government services (including services provided to the tax evaders!), it undermines public morale, and it is a direct challenge to the legitimacy of the governments whose taxes are evaded.


Hawaiian sovereignty activist Hayden Burgess, alias Poka Laenui, takes the position that all persons of Hawaiian native ancestry are subjects of a de jure independent nation; and all descendants of immigrants naturalized into the Kingdom before 1893, or descendants of people born in Hawai'i before 1893, are also subjects of that independent nation. Furthermore, he advocates the view that newcomers to Hawai'i can become citizens of this independent nation if they live in Hawai'i long enough, take an oath of loyalty, give up citizenship in other nations (like the U.S.), and register themselves in some way (as by placing their names on his secret regisrty).

For many years Hayden Burgess has been advocating his theories on radio, the internet, and television, including his view that citizens of the Nation of Hawai'i should not owe taxes to the federal or state governments. For his general views about Hawaiian history, citizenship, and sovereignty, see And for his particular arguments regarding income tax and lack of U.S. jurisdiction in Hawai'i, scroll down to the section on "taxation" which includes documents submitted by him in court in his role as attorney for a defendant in a tax case.

Hayden Burgess's constant vicious attacks on the U.S., and the "illegal" State of Hawai'i, are particularly pernicious in view of his position as executive director of a mental health clinic in Wai'anae where he probably receives large federal and state grants and service contracts which pay his salary, and where he sits on the board of directors of a newly established Hawaiian culture immersion charter school under State of Hawai'i taxpayer funding. But, of course, he probably rationalizes taking taxpayer money from federal and state governments as a small part of the enormous reparations owed by those governments for the overthrow and for more than a century of hostile military occupation of his homeland.

Hayden Burgess, alias Poka Laenui, has made public statements for many years regarding his own non-compliance with federal and state income tax laws. For example, he made such statements repeatedly in his regular Saturday night radio program on April 17, 2004, during the hour from 7 PM to 8 PM, on Honolulu radio station KWAI AM 1080. He introduced the topic by mentioning that the income tax deadline of April 15 had just passed, so it's timely to discuss this topic. He referred to the United States as an illegal occupier of Hawai'i. His theory is that the United States lacks jurisdiction in Hawai'i because the overthrow of the Kingdom of Hawai'i in 1893, with U.S. assistance, was illegal; and because the Annexation of Hawai'i to the United States in 1898 was illegal, and because the Statehood vote of 1959 was illegal. Therefore Hawaiians of native ancestry, and descendants of non-natives who were natural-born or naturalized subjects of the Kingdom of Hawai'i, do not owe allegiance to the United States and are under no obligation to finance the continuing illegal belligerant occupation of their homeland by the United States. He also says that the State of Hawai'i is not a legitimate government, being a puppet regime of the illegal occupier U.S. government. He does not exactly advise other people not to pay taxes, saying that that is something each individual must decide for himself in consultation with family members. But in response to a caller who asked him specifically whether he follows his own theory, he clearly stated that he has not paid federal or state income tax since 1979, and he also said that he has stated that repeatedly and publicly for many years. During the program he also spoke admiringly about the Honolulu bus drivers who were recently indicted for non-payment of income tax based on the same theory (see below).


On January 8, 2005 Hawaiian sovereignty independence activist Hayden Burgess, alias Poka Laenui, published a letter to editor saying that Hawai’i is an independent nation occupied by the foreign power United States; and therefore the people of Hawai’i do not owe taxes to the federal or state governments to pay for the financing of their own colonization.
Honolulu Advertiser, Saturday, January 8, 2005
Letters to the Editor

Hawaiians should not have to pay taxes

Judge Michael Wilson misstates the interrelationship between Hawaiian sovereignty and one's taxpaying obligation ("Tax protester gets a year in jail," Dec. 30).

Ken Kobayashi reports "Wilson said taxes financed (John) Souza's public school education, his pay in Army and the Fire Department and partly the pension he gets. Souza doesn't have to like paying taxes, but should show 'the courage to pay your taxes, even though you don't like it,' Wilson said."

The deeper question is, "Who gave the state or U.S. government the right in the first place to impose itself as the sovereign entity over Hawai'i?" We Hawaiian nationals have no qualms about paying taxes to our rightful Hawaiian government. But through the invasion of Hawai'i and the participation in the theft of our territory and government, the United States, contrary to international law (as well as its own and Hawaiian domestic laws), imposed itself in our lands, making Hawai'i its colony.

Now, through taxation, it requires that we finance our own colonization, paying for its military, which has compelled our service for its wars and for its public education, which has participated in the brainwashing to make Hawaiians into Americans.

Judge Wilson and his judicial system complete the cycle of colonization by trying to legitimize the theft and punish those who are willing to stand firm in their conviction to righteousness.

Poka Laenui


Here is a news story about 30 Honolulu bus drivers evading taxes by asserting Hawaiian sovereignty claims. The story was reported on KITV television in Honolulu on Wednesday November 5, 2003, but not in any newspapers:

30 Bus Drivers Face Tax Evasion
Some Drivers Avoid Taxes For Decade

HONOLULU -- Roughly 30 city bus drivers are under investigation for tax evasion, KITV 4 News has learned. Two bus drivers have already been indicted. They're accused of not paying any taxes for four and five years. Several dozen other city bus drivers are also accused of not paying state taxes, KITV 4 News learned. About 30 bus drivers have not paid taxes for years, some of them evading taxes for as long as a decade, sources told KITV 4 News. Sources said an investigator from the Attorney General's Office went to bus headquarters in recent weeks, asking payroll officials for pay records of the bus drivers in question. Rick Damerville is the deputy attorney general handling the case. "I can't comment on pending investigations. I can tell you that this is not uncommon activity. Any large employer is likely to have some individuals doing this," Damerville said.

Sources said the drivers told the bus payroll department not to withhold taxes from their paychecks. Some of the drivers claimed they didn't have to pay taxes because they believe in Hawaiian sovereignty and they do not recognize the state or federal governments, according to sources.

Two drivers were indicted last week for evading taxes. The state said the two men claimed 99 personal withholding allowances. "If you claim that many allowances, your employer is not going to withhold any state income tax. And then you don't need to file a return, because you've already got all your withholding taxes," Damerville said. One driver, Ernest Fain, a 13-year veteran, is charged with not paying taxes for five years on $246,000 worth of income. Joseph Nuuanu, who has been driving city buses for 30 years, is accused of evading taxes on $201,000 in wages over four years. "Our system relies on honest, average taxpayers to survive, for government to survive. And if large numbers of our small taxpayers think that nobody's looking at them, so that therefore, it's fair to cheat, they're going to be surprised in Hawaii," Damerville said. KITV 4 News called several top officials at TheBus Tuesday for comment on the story, but they did not call back. The two indicted drivers are still on the job and sources said more indictments are expected in the weeks and months to come.


Aside from claims that citizens of an independent Nation of Hawai'i owe no income taxes at all to the federal or state governments, there is a different sort of claim that even acknowledged U.S. citizens can greatly reduce their federal income tax because of the foreign earned income tax credit. If Hawai'i is indeed not a part of the United States, then U.S. citizens living in Hawai'i and earning income from sources in Hawai'i can take large deductions from such earned income. And non-U.S. citizens clearly would not owe any U.S. taxes for income earned outside the U.S.

The Honolulu Star-Bulletin daily newspaper has followed the legal activity related to tax evasion and fraudulent tax preparation at one of Hawai'i's largest tax preparation services, in articles published from February 2000 through at least October 2003. Thousands of fraudulent tax returns have probably been filed based on the theory that Hawai'i is not a part of the United States.

Following are excerpts from the Honolulu Star-Bulletin's numerous articles about RB Tax Service. The excerpts are arranged in chronological order, and the dates can easily be seen in the URLs.
Richard James Basuel and his son, Richard James Basuel II, who prepare tax returns as RB Tax Service, entered "no contest" pleas for failing to file state general excise tax returns for the years 1995, 1996 and 1997. Basuel II earned more than $550,000 while his father grossed in excess of $330,000 from tax return preparations and commissions over the three-year period. RB Tax Service is one of Hawaii's largest tax preparation firms, says state Tax Director Ray Kamikawa.
An Oahu tax preparer who pleaded no contest earlier this year to charges of not filing his own state general excise taxes has been indicted for allegedly telling clients to declare income earned in Hawaii as earned in a foreign country. Richard James Basuel, 58, also allegedly inflated deductions on the income tax returns he prepared for customers, the state said yesterday. Hironaka said a taxpayer who makes $85,000 a year and declares it as foreign income would only have to pay taxes on $13,000 instead of the full amount, which means less money for state coffers. The latest accusations against the elder Basuel stem from a continuing investigation by the state Department of Taxation. RB Tax Service, with offices on North King Street in Kalihi and Farrington Highway in Waipahu, is among the state's largest tax preparation companies. In 1998, the company filed 4,775 returns from its Kalihi office, including 200 for businesses and 4,575 for individuals, according to Pacific Business News' "Book of Lists 2000."
Oahu tax preparer Richard James Basuel has pleaded not guilty to state charges of fraud and theft for allegedly telling clients to declare income earned in Hawaii as earned in a foreign country.
Tax preparer claims Hawaii isn't part of U.S. A tax preparer convicted of failing to file his own state excise taxes has pleaded no contest to charges that he filed tax returns for six clients claiming Hawaii as a foreign country. To claim foreign earned income credit, a taxpayer must have lived in a foreign country for 330 consecutive days within a calendar year, according to the state tax office. Basuel claimed that his clients, who lived in Hawaii, were eligible for the credit because Hawaii is a foreign country and not part of the United States, tax officials said.
A tax preparer was sentenced to six months in jail and fined $30,000 in connection with filing false state tax returns for six clients claiming Hawaii as a foreign country, authorities said. Richard Basuel also received five years' probation at sentencing yesterday, state Tax Director Marie Okamura said.
"Definitely there's cheating out there," said David Ramirez, a tax consultant and former IRS agent who owns a company called IRS Tax Relief Services. Steven Hiranaka, criminal tax investigator with the state Taxation Department, has worked on a number of high-profile tax evasion cases. "There's probably millions (of dollars) not being addressed but just how much no one knows," he said. "I think perhaps 10 percent or a little more are the people who are not complying." Tax consultant Ramirez said when people run afoul of the tax system, most of the problems he sees fall into about four basic categories.... A third category Ramirez has seen for a number of years in Hawaii is what he calls the "constitutional argument. These are the sovereign nation cases where people believe or have been told they don't have to pay taxes because Hawaii is not part of the U.S.," he said. "There have been numerous cases probably dating back to the 1940s. All of them have failed."
A Circuit Court judge sentenced a 56-year-old Aiea woman yesterday to five years' probation and a $30,000 fine for aiding and abetting taxpayers in preparing numerous fraudulent tax returns. In a plea agreement with the state, tax preparer Vivian Soong pleaded guilty on Feb. 14 to six felony counts of second-degree theft. Soong worked as an independent contractor with RB Tax Services. Judge Michael Town also ordered Soong to pay all delinquent taxes, to serve 150 hours of community service and to write a letter of apology to the director of the Department of Taxation.


An article in the Honolulu Star-Bulletin of March 8, 2003 described the capture of a Hawaiian sovereignty activist who had been a fugitive for ten years. His crimes included a peculiar sort of tax fraud. And his case is interesting because of his connection with Hawaiian independence activist Bumpy Kanahele, who had obstructed justice by interfering with his friend's arrest. The place where the obstruction took place was Mr. Kanahele's Waimanalo Village, a parcel of state-owned land which Kanahele had originally seized without permission or lease. A group of activists built houses on the land and continue to live there ten years later. The name Mr. Kanahele gives to both himself and his village is "Pu'uhonua" which means a person or place who provides refuge to lawbreakers fleeing from severe punishment or a death penalty because they violated the laws of the ruling chief or of the native religion. If a criminal can flee to the pu'uhonua, he is safe and can remain there unmolested while getting purified, and then can return to society without penalty of social stigma. Here is the newspaper article:
Fugitive tax protester is nabbed
Sovereignty activist Nathan Brown was convicted in 1991 of filing false tax returns

A federal fugitive, whom Hawaiian activist Dennis "Bumpy" Kanahele once harbored and helped escape, was captured yesterday morning on the Big Island, ending a decade on the run. Hawaiian tax protester Nathan Brown, 49, was arrested by members of the newly formed Hawaii Fugitive Task Force at a home in Mountain View, said U.S. Attorney Edward Kubo Jr. Brown was unarmed and tried to hide as task force members closed in on the house, which was otherwise unoccupied, Kubo said.

In 1991, Brown was convicted on several counts of filing false federal tax returns, which he said was done in protest of the government claiming native Hawaiian land. He was sentenced to 6 years in prison. He appealed the conviction and lost.

Brown led a group of Hawaiian activists who filed false tax returns and is a former member of the Nation of Hawaii, a Hawaiian sovereignty group.

Brown had been free on bond when he failed to show up to serve his sentence, and an arrest warrant was issued in November 1993. "Upon learning he lost his appeal, he decided it was better for him to be on the lam," said Kubo.

On March 16, 1994, Kanahele, then leader of the Nation of Hawaii, blocked a deputy U.S. marshal trying to arrest Brown as he fled the group's Waimanalo compound. Brown was the last of about six Hawaiian tax protesters, said James Propotnick, interim director of the state Department of Public Safety.

Propotnick had a personal interest in Brown's capture. "He became a fugitive on my shift," said Propotnick, former chief deputy U.S. marshal in Hawaii at the time. Brown was to be held at the federal detention center near Honolulu Airport before serving his sentence at a federal penitentiary. Kubo would not say whether Brown would be charged with fleeing from custody. In 1998 the government had already spent $20,000 pursuing Brown, but officials were not available to update the search costs.

Kanahele, who was charged with obstructing arrests and harboring Brown, pleaded guilty Sept. 12, 1994, to interfering with Brown's arrest. He served his sentence of four months of jail and four months of house arrest.

Kubo would not say what led to the arrest of Brown or whether Kanahele or his group had anything to do with providing information.

Kubo used Brown's arrest to unveil the task force at a news conference. The task force has been operating since the beginning of the year and was formed by the U.S. Marshals Service and the state Department of Public Safety, which coordinates local, state and federal law enforcement's efforts. It targets fugitives whose criminal history includes violent crimes, weapons offenses or drug offenses. Four deputy marshals and two sheriffs from the state Department of Public Safety are assigned to the task force, which also arrested robbery fugitive Samuel Paiaina on Feb. 4.


The story of Nathan Brown was updated on November 25, 2003 when he claimed in court that "the United States has no authority over the kingdom of Hawaii because the 1893 overthrow of the monarchy was illegal... U.S. District Judge Helen Gillmor disagreed and ruled that she would apply U.S. laws to Brown's case."

Here's the full story:

Fugitive Hawaiian activist pleads guilty

A Hawaiian activist who had been a fugitive for 10 years before being caught in March has pleaded guilty to a federal charge of failing to surrender himself, the U.S. attorney's office announced yesterday. Nathan Keliikui Brown, 49, pleaded guilty to the charge Friday as part of a plea agreement. Authorities said Brown never showed up Nov. 17, 1993, when he was to begin serving a 6 1/2-year federal prison sentence. Brown was convicted of 18 federal felonies and identified as the leader of a group of Hawaiian activists who filed false tax returns to harass public officials. He was captured hiding in a home in the Mountain View area of the Big Island by a county, state and federal fugitive task force. At his hearing Friday, Brown argued the United States has no authority over the kingdom of Hawaii because the 1893 overthrow of the monarchy was illegal, the U.S. attorney's office said. U.S. District Judge Helen Gillmor disagreed and ruled that she would apply U.S. laws to Brown's case. The latest charge carries a maximum penalty of up to five years in prison. Brown's sentencing was scheduled for March 18.


The continuing saga of RB Tax Preparation added another chapter with the publication of an article on March 17, 2003 in the Honolulu Star-Bulletin. Here is part of that article:
State tries to restrain frivolous tax filings -- Some claim they owe no taxes because Hawaii is not a state

The state attorney general is warning the public against tax preparers who are giving incorrect or frivolous advice that could get taxpayers into serious trouble. Some tax protesters have been asserting that they do not have to pay taxes on wages earned in the state of Hawaii.

Five individuals charged with tax crimes have recently changed their pleas and agreed to testify against tax preparer Richard Basuel, of RB Tax Service, at one time one of the state's largest income tax preparation companies with offices in Kalihi and Waipahu.

Basuel, who served six months in prison after he was convicted in July 2001 of filing false tax returns by claiming Hawaii as a foreign country and overstating his clients' itemized deductions, is facing new charges of tax evasion, preparing fraudulent tax returns and theft.

When told by the Internal Revenue Service that his tax return was frivolous, Miranda responded that he did not have to accept their letter because it was not addressed to him, said Deputy Attorney General Rick Damerville at a recent hearing. The letter spelled Miranda's name in capital letters, but he argued he did not spell his name that way. Miranda, however, did not refuse the tax refund check, which was addressed to him all in capital letters, Damerville said.

Jeffries, 48, and wife Elizabeth Aguirre-Jeffries, 45, were charged with five counts of attempted tax evasion, four counts of filing fraudulent tax returns, two counts of second-degree theft and willful failure to file an annual income tax return for 1997 through 2001.

Jeffries, a Gulf War veteran and a member of the U.S. Naval Reserve and Navy SEALs, had notified the Internal Revenue Service that the tax code speaks of the United States, and he does not live in the United States and did not pledge allegiance to the United States, Damerville said.


Another chapter in the continuing soap opera of RB Tax Preparation was reported in the Honolulu Star-Bulletin of September 19, 2003, when Richard J. Basuel was found in contempt of court, had his bail of $150,000 revoked, and was sent to jail, because he refused to acknowledge the jurisdiction of the court on the day when trial on tax evasion was scheduled to begin..
Tax preparer on trial for fraud is jailed for contempt of court
By Debra Barayuga

A state judge has found the owner of a tax preparation service in contempt of court and revoked his $150,000 bail. Richard J. Basuel, who was to go to trial yesterday on charges of tax evasion and preparation of fraudulent tax returns, was taken immediately into custody, and his trial was postponed to Nov. 26. Circuit Judge Michael Wilson charged Basuel with contempt after he remained in the audience and refused to appear at the defense table. Basuel told the court he was appearing before the court under duress and that he was entitled to a hearing proving the court had jurisdiction over him. ... Basuel has made similar arguments in earlier court hearings, prompting the court to order a mental examination to determine his fitness for trial. He was found fit. Wilson said Basuel was not technically present if he was not in the well of the courtroom. "As a condition of bail, you have to be in the courtroom," Wilson said. ... Basuel previously served six months in prison after he was convicted in July 2001 of filing false tax returns by claiming Hawaii as a foreign country and overstating his clients' itemized deductions.
Defendant’s bail revoked for court antics
Vivian Soong is accused of preparing fraudulent tax returns
Associated Press

A local tax return preparer who pleaded guilty last year to six felony counts of aiding in the preparation of fraudulent state income tax returns is in legal trouble again. Vivian Soong, 58, was indicted Aug. 5 for allegedly helping clients evade state tax obligations. She was also charged with first-degree theft for obtaining more than $20,000 in alleged fraudulent tax refunds for her clients. Circuit Judge Michael Town revoked Soong's $50,000 bail Thursday when she refused to acknowledge her identity in court and refused to answer questions posed by the court. Town said Soong could be released again if she posts a new cash bail of $25,000. Deputy Attorney General Ricky Damerville said he believed Soong acted on the advice of someone who is encouraging criminal defendants to obstruct court proceedings. There are a number of such individuals who aren't licensed attorneys who are engaged in the unauthorized practice of law, Damerville said. "There's some people out there that are coming into court, they're using the same script," Damerville said. "They're getting advised or brainwashed or whatever you want to call it by other individuals. And I need the public's assistance to find out who it is. And when I do, I'm going to prosecute them." Damerville said the same people giving out the advice are also encouraging defendants to pepper the court and public officials with nonsensical documents and threatening court officers and public officials with liens unless they dismiss pending criminal charges. Engaging in the unauthorized practice of law is a misdemeanor punishable by up to one year in jail for each offense. In May 2002, Town fined Soong $30,000, placed her on five years probation, ordered her to pay all delinquent taxes and sentenced her to serve 150 hours of community service. One of the charges Soong admitted to last year was helping to prepare a return that claimed the foreign earned income tax exclusion on the premise that Hawaii isn't a state. Soong worked for RB Tax Service, owned by Richard Basuel. Basuel was convicted in 2001 of filing tax returns claiming Hawaii as a foreign country, overstating itemized deductions for clients and failing to file his own excise tax returns.


Judge Sandra Simms was one of the judges who presided over the prosecution of some of the RB Tax Preparation staffers and clients. Judge Simms is notorious for giving extremely lenient sentences that fail to deter criminals and make a laughing-stock of the judiciary. Accordingly, when her first ten-year term as a judge came to an end and there was a chance for the public to have input on whether she should be retained for another ten-year term, some outraged members of the public submitted testimony to oppose her retention in office. See:

Pacific Business news, February 9, 2004

Tax firm employees indicted for fraud

A federal grand jury indicted five employees of RB Tax Service on charges stemming from their allege role in falsely claiming more than $4 million in tax refunds from the U.S. government. Each defendant was charged with one count of conspiracy to defraud the United States by obstructing the Internal Revenue Service from collecting taxes. Each also was charged with several counts of willfully preparing false tax returns and aiding and abetting in the preparation of false tax returns. Charged with the tax-related crimes were: Richard James Basuel, Richard James Basuel II, Dina Grace Naui Caleda, Rosalinda I. Tamayo and Vivian Wai Won Soong. The indictment alleges that between Jan. 25, 2000 and April 5, 2000, all five prepared and submitted false 1997, 1998 and 1999 federal tax returns on behalf of their clients. U.S. Attorney Edward H. Kubo Jr. said that all five return preparers promoted a "new way" of preparing tax returns to their clients. They disguised income earned in Hawaii as foreign-earned income, Kubo said. He said this resulted in a reported adjusted gross income of zero and a refund of all of the client's federal tax withholdings, Kubo said. They caused more than 900 false returns to be filed and falsely claimed more than $4 million in federal tax refunds from the federal government. If convicted on the conspiracy count, each defendant will face a maximum penalty of five years in prison and a fine of $250,000. Each count charging the willful preparation of false tax returns carries a maximum penalty of three years in prison and a fine of $250,000.


The story of fugitive Nathan Brown, described previously, came to its long-awaited conclusion on March 19, 2004 when he received additional prison time for his escape.
Honolulu Star-Bulletin, Saturday, March 20, 2004

Activist gets extra prison time
Nathan Brown gets 21 months appended to his earlier sentence in a federal tax case

Associated Press

A Hawaiian activist who was a fugitive for nearly 10 years in a tax protest conspiracy case was sentenced yesterday to one year and nine months in prison for failing to surrender to start serving another prison sentence in that case. U.S. District Judge Helen Gillmor said Nathan Keliikui Brown, 50, must serve the 21-month sentence on top of the 6 1/2-year sentence imposed in 1991 for his conviction in the tax case. After sentencing in that case, Brown was allowed to remain free on bail pending an appeal. The 9th U.S. Circuit Court of Appeals upheld the conviction, and the U.S. Supreme Court refused to hear the case. Brown failed to appear to begin his sentence on Nov. 17, 1993, and remained at large until he was arrested in a shanty in the rural Mountain View area of the Big Island on March 7, 2003. During his trial, Brown claimed to be a citizen of the Kingdom of Hawaii who was immune from state and federal laws because the 1893 overthrow of the monarchy was illegal. Brown was convicted of 18 federal felonies and was identified as the leader of a group of Hawaiian activists who filed false tax returns to harass public officials. Brown said he was seeking redress from the government for lands taken from the Hawaiian people and thought what he was doing was legal. Brown and others filed false documents with the Internal Revenue Service to support fraudulent tax returns that sought refunds of about $5 million, according to court documents.


In April 2004 there were full-page advertisements in two Honolulu newspapers announcing that Lokelani Lindsey is running for Mayor of Honolulu. Lokelani Lindsey is a former Bishop Estate trustee, who was convicted of tax fraud, was released from federal prison in April 1, 2004, and was living in Las Vegas. The expensive advertisement was apparently paid for by another convicted tax-fraud felon Richard Basuel, of the infamous RB Tax Preparation service. The advertisement first was published April 1 in the twice-monthly small-circulation ethnic Filipino free newspaper The Fil-Am Courier (Richard Basuel is Filipino), and got very little attention. But them there were efforts to place the full-page ad in the Honolulu Advertiser, which apparently refused to run it; and then the ad actually was published in the Honolulu Star-Bulletin in its premiere edition of Sunday April 18. In that same edition of the Star-Bulletin reporter Sally Apgar wrote an article severely critical of the advertisement and saying that Lokelani Lindsey had not approved the ad and indeed is ineligible to run for Honolulu mayor both because she is a convicted felon and because she is not a resident of Honolulu.

The newspaper advertisement contained a website URL. The content of the website included the same content that was in the advertisement, plus substantial additional material including a 35-page pdf document consisting of legal documents filed by Lokelani Lindsey and statements made by her, and supported by officials of the "Hawaiian Kingdom", describing racial discrimination against ethnic Hawaiians, alleging fraudulent activities by Bishop Estate, and demanding that U.S. District Court Chief Judge David Ezra recuse himself from hearing her case because of Ezra's alleged bias against ethnic Hawaiians in general and Lokelani Lindsey in particular.

Below is the article by Star-Bulletin reporter Sally Apgar, followed by some of the contents of the website (including the contents of the newspaper advertisement), together with a link to download the 35-page pdf file containing legal documents and opinions (allegedly) written by Lokelani Lindsey and posted on (apparently) Richard Basuel's website. The contents of the website and the pdf file are extremely bizarre, but quite interesting for people who understand the issues surrounding Hawaiian sovereignty.

Honolulu Star-Bulletin, Sunday, April 18, 2004

Ads falsely cast Lindsey as candidate for mayor
The ad campaign is being run without her OK, her lawyer says

By Sally Apgar

Ousted Kamehameha Schools trustee Lokelani Lindsey, who was recently released from federal prison, is not running for Honolulu mayor despite ads appearing in today's paper that urge her to run, said her attorney Friday.

"No one has contacted my client and she has not given authorization to anyone to promote her running for mayor," said Honolulu attorney William Harrison .

"She doesn't know anything about this," he said.

Lindsey was released from a mainland prison April 1 after serving six months for bankruptcy fraud and money laundering .

Lindsey, 65, did not return calls to her hotel room in Las Vegas on Friday. She is on supervised release and is still caring for her ailing husband.

An ad, which asks for people to draft Lindsey as a candidate for mayor, is running in the print edition of today's Star-Bulletin on Page E14.

Earlier this month, a full-page ad appeared in the Fil-Am Courier, a Filipino newspaper, that read: "Elect! Lokelani Lindsey mayor of Honolulu."

The ad included a picture of Lindsey and a full reprint of an affidavit she filed in U.S. District Court dated July 30, 2003, that was placed in the court's overnight box during her bankruptcy fraud case.

In the affidavit, Lindsey portrays herself as a victim who was punished in the judicial system for having "insider knowledge" of corruption at Bishop Estate (now known as Kamehameha Schools), of "corrupt attempts to seize control" of the estate, "grand jury tampering" and "acts of abuse of Hawaiians."

The Fil-Am ad states it is "paid for by Friends of Lokelani Lindsey for Mayor, Christian Filipino Victims Foundation," which has a Web site at

Harrison said Lindsey is not a member of the group and was not aware of the group's existence until he asked her about the ad.

Harrison said he suspected that Richard Basuel, who is also featured in the ad and was recently convicted of fraud, was behind the ads but without Lindsey's consent. Harrison declined to comment on Basuel or his motive.

Basuel did not return repeated calls for comment.

As a felon who has not completed her sentence, Lindsey is not eligible to run for state office, according to the state Office of Elections.

She must also be a registered voter of the county in which she plans to run. The election office said Lindsey was last registered to vote in Maui county.

Lindsey, a former gym teacher and hula dancer, rose through the ranks of the Department of Education on Maui and in Democratic political circles before gaining a seat as trustee. Critics have said that her close management of the schools stoked community unhappiness with the board, investigations of its alleged mismanagement and fueled a scandal that dogged the estate during the mid- to late 1990s.

Lindsey and three others were ousted from their $1 million-a-year jobs as trustees May 1999 after separate state and federal investigations into the alleged mismanagement of the estate's finances and its schools. A fifth trustee, Oswald Stender, resigned from his job at the same time, but not before he fought a lawsuit with trustee Gerard Jervis to oust Lindsey.

In the ad, Basuel states that he and Lindsey "both are political prisoners." He paid cash for the Fil-Am and Star-Bulletin ads.

Campaign Spending Commission Executive Director Robert Watada said Basuel has not registered with the commission. He noted that once someone has raised or spent $100 or more in pursuit of a candidacy and not filed with his office within 10 days, they are in violation of state campaign spending laws.

In February, a state Circuit Court jury convicted Basuel, the owner of a local tax preparation company called RB Tax Service, on 23 tax fraud counts, including attempting to evade taxes and first-degree theft.

Basuel, who remains free on bail, is scheduled to be sentenced May 12. He faces 10 years in prison from his preparation of tax returns for five people during tax years 2000 and 2001.


IRS Scandal

Christian Filipino Victims Foundation

Whether from government or private "masters", if you are a victim you have come to the right place for relief (refer to schedule).

Richard Basuel presents the Bishop Estate scandal which he and many others are victims of.



The friends of Christian Filipino Victims Foundation, led by Chairman Richard Basuel, ask you to elect former Bishop Estate Trustee Lokelani Lindsey as Mayor of Honolulu. Both are political prisoners.

Vote for Lokelani Lindsey for Mayor of Honolulu

After years of preparing for her leadership whistleblowers role, Lokelani bravely exposed Hawaii’s biggest scandal, which was the real reason she was put in jail. Richard Basuel has been and is being prosecuted as a scapegoat for Hawaiian sovereignty issue even though he is neither Hawaiian nor a Hawaiian sovereignist, and as a way to intimidate the Filipino vote in Hawaii, i.e. Honolulu Star-Bulletin, April 19, 2001, published the Richard Basuel and associates were, “claiming Hawaii as a foreign country”.

Contrary to certain allegations, the Filipino Victims Foundation is a Christian based group who promotes agreeing with the government, especially on tax issues. Jesus said to pay taxes, Matthew 22:18-20. Lokelani Lindsey and Richard Basuel are two Hawaii citizens prosecuted for agreeing with the government. The Affidavit of Richard Basuel, filed February 27, 2004 in the Hawaii Bureau of Conveyances as Document No. 2004-040689, states,


) SS:

I, RICHARD BASUEL, am competent to testify herein, have personal knowledge of the herein, and hereby testify and aver that the following is true to the best of my knowledge,

1. Available on the internet is the following document attached hereto as Exhibit “A” Scandal 1 Appearance With Assistance Of Counsel And Request For Recusal Of Judge David A. Ezra; Declaration Of Lokelani Lindsey; Exhibits “1" - “4"; Affidavit Of Lokelani Lindsey; Certificate Of Service (“Lindsey Document”). The last page of this Lindsey Document was filed October 2, 2003 in USA v. Lokelani Lindsey, Cr. S-010318 (DAE RJ) and Cr. S-00-00482 HG, U.S. District Court for the District of Nevada. However, on October 16, 2003 this Lindsey Document was sent by fax transmission from David Alan Ezra to the U.S. District Court for the District of Nevada, which filed it on October 17, 2003, the next day.

2. Exhibit “B” hereto is a reprint of the October 4, 2003 Star-Bulletin article, describing the Lindsey Document. Apparently Judge Ezra jailed Ms. Lindsey primarily on the basis of the Lindsey Document, which he refused to consider as filed even though Ms. Lindsey filed it prior to the hearing which jailed her. The Lindsey Document was filed AFTER the ten day motion for reconsideration and other deadline(s) that would have allowed Ms. Lindsey to stay out of jail at least until her properly filed, but ignored, motions were given a fair hearing. Probably to this day, nether Ms. Lindsey nor her attorney do not know her motions were docketed and should have been given a fair hearing based on being docketed (however improperly.

3. My circumstances are like those of Ms. Lindsey addressed in the Lindsey Document in that are both victims of abuse. For example, in my circumstances I was accused in the newspapers of promoting Hawaiian sovereignty even though there is nothing in writing that shows this. Obviously, I have been and am being persecuted as a Hawaiian sovereignty promoter as a warning to Hawaiian sovereignty supporters, but without risking an organized backlash from actual members of the Hawaiian sovereignty movement.

Richard Basuel

The Foreign Intelligence Surveillance Act Court is responsible for abuses against Hawaii citizens, including Hawaiians and Filipinos targeted to scare Hawaiians, such as Richard Basuel.


See also:


The "Exhibit A" referred to on that webpage is the 35-page pdf file containing bizarre legal documents and opinions by Lokelani Lindsey. That 35-page document can be downloaded directly from Richard Basuel's webpage by clicking on the following URL:
OR, in case that link goes dead or that webpage is taken down, the 35-page document can also be downloaded by clicking here:

Honolulu Star-Bulletin, Tuesday, October 26, 2004

Tax scheme results in prison time for preparer

By Debra Barayuga

A Honolulu tax preparer convicted a third time of tax offenses was sentenced to 10 years in prison yesterday for filing fraudulent tax returns after incorrectly advising clients they could get back all their taxes because they were not U.S. citizens.

Circuit Judge Michael Wilson rejected Richard Basuel's request for probation, saying he had been placed on probation for a similar conviction in 2001 but continued to violate state tax laws and advise individuals that they do not have to pay taxes.

"The facts establish that you have created some enormous problems for people who come to you for tax advice, but you also continue to perpetuate the theory that it's not really necessary for a vast number of people to pay taxes in our community because of what you as a professional has decided," Wilson said.

Basuel, 63, was convicted in February of first-degree theft, 11 counts of tax evasion and 11 counts of making false statements that defrauded the government out of about $23,000 between 1999 and 2001.

Basuel felt he could take on the tax system and was willing to pay the price to attract clients to his tax preparation business knowing he would get a percentage of the returns, Wilson said.

Basuel said he would not accept a jail sentence or a monetary fine. "I order you to dismiss this case without prejudice and without recourse to me for failure to state a claim on which relief could be granted," he told the judge.

Defense attorney Reginald Minn argued that probation was appropriate given that Basuel has been a law-abiding citizen for most of his life, operated a profitable business, provided a valuable service to many immigrants and has contributed to the community in various ways.

"Mr. Basuel is not someone who could have come up with these theories on his own," Minn said, noting that Basuel relied on the advice of purported law professors.

While Basuel has prepared thousands of tax returns, only a relative few -- some who were Hawaiian or part-Hawaiian with nationalist ties and were exploring other ways of preparing taxes -- agreed to use the alternate method he was touting, Minn said.

Deputy Attorney General Larry Goya said Basuel was the "mastermind" behind the scheme, in which he told clients they were not required to pay taxes based on his interpretation of federal tax provisions that do not apply to state tax laws.

The difference in the latest case from his 2001 conviction for tax evasion and aiding in the filing of fraudulent tax returns is that he told clients that he would be entitled to 10 percent of whatever refunds they received.

Basuel was convicted of misdemeanor counts in 2000 for failure to file his personal income tax returns.

POSTED: 5:54 pm HST September 12, 2005

Tax Preparer Sentenced To Prison

A judge sentenced a tax preparer to prison time Monday for helping people claim that Hawaii was a foreign country so they did not have to pay U.S. taxes.

Richard Basuel was convicted of helping 12 taxpayers file illegal returns, but the government estimates his tax service may have given the same advice to 3,000 others.

He had already served about 19 months in state custody. Visiting Judge Wallace Tashima sentenced Basuel to another 40 months in federal prison. Prosecutors wanted nearly double that much.

Tashima gave one of Basuel's employees a reprieve. He overturned a guilty verdict against Vivian Soong.

Tashima said it was unreasonable for the jury to believe that Soong knew what she was doing was illegal. Three other Basuel employees pleaded guilty.


It has become distressingly common to hear about ethnic Hawaiians evading income tax on grounds of Hawaiian sovereignty. The RB Tax Preparation case shows that many people with no native ancestry have used the sovereignty claim that Hawai’i is not part of the U.S., to claim the foreign incom tax credit. But a different sort of claim was asserted for the first time in summer 2004 -- a claim that someone with no native ancestry is automatically a subject of the Hawaiian Kingdom simply by virtue of being born in Hawai’i.

On Friday September 17, 2004 John Philip Souza, alias “Pilipo,” was found guilty in a jury trial on four counts of theft and false statements in his State of Hawai’i income tax filings for 1999 and 2000. Mr. Souza claims that the Kingdom of Hawai’i was illegally overthrown in 1893, and therefore the State of Hawai’i is not legitimate and lacks jurisdiction to compel him to pay taxes. He further claims that he is a subject (citizen) of the still-living Kingdom of Hawai’i. Although acknowledging that he has no Hawaiian native ancestry, he points out that under Kingdom law (which be says still remains in effect), all persons born in Hawai’i (including himself) are native-born subjects of the Kingdom. Mr. Souza was imprisoned for about 80 days while awaiting trial because of his refusal to cooperate with court procedure; and described himself as a “political prisoner.”

Hawaiian independence activists are happy to have a martyr, especially someone with no native ancestry who can be cited as an example that the sovereignty movement is not racist. But Souza’s theory poses long-term problems for the sovereignty activtsts, who desperately want to find a way to ensure racial supremacy for ethnic Hawaiians. It it is true that Kingdom law gave full citizenship to anyone born in the Kingdom, and if Kingdom law still remains in force today, then it is logical that the citizenry of today’s still-living nation of Hawai’i is overwhelmingly composed of people with no native ancestry -- ethnic Japanese, Chinese, Filipinos, Koreans, Samoans, and Euro-Americans who have been born in Hawai’i, including some whites whose families have lived in Hawai’i for eight generations. Therefore the activists have devised intricate theories to show that under “international law” most locally-born residents of Hawai’i today (including Pilipo himself) would qualify only for second-class citizenship in a resurrected independent Hawai’i. The basic theory is that when a nation (Hawai’i) is under belligerant occupation by another nation (the U.S.), then the children born to citizens of the occupier, or born to foreigners who entered the occupied nation under the authority of the occupier, remain citizens of the foreign nations of their parents and not citizens of the occupied nation.

Regardless of convoluted theories of “international law,” the case of John Philip “Pilipo” Souza is sufficiently interesting and complex to be worthy of its own webpage. See:


The following letter to the U.S. Internal Revenue Service was circulated on the internet in August/September 2004 by the author of the letter, Isaac Harp of Lahaina Maui. Isaac Harp is an independence activist who clearly wants to get in on the “fun” of “witnessing” for his beliefs and defying the U.S. government, thereby acquiring status among his fellow activists. Perhaps the case of “Pilipo” Souza inspired Mr. Harp. His willingness to circulate such a document on the internet is clear evidence that tax evasion by Hawaiian sovereignty activists is coming to be expected as a rite of passage, perhaps like gang members getting a tattoo or drawing blood from a member of a rival gang. The activists apparently feel the U.S. IRS either lacks the power or the interest to prosecute them for tax evasion. Stay tuned.


Isaac D. Harp, PMB 791, 843 Wainee St., F-5 Lahaina, Hawaiian Islands 96761 (808) 661-4527

Department of the Treasury Internal Revenue Service August 14, 2004

ATTN: ASFR Collection Br. STOP 81401 P.O. Box 24015 Fresno, CA 93779-0048

August 14, 2004 RE: Letter Number 2566(SC/CG)


Regarding your letter dated 07/12/2004, I apologize for this late response. I was in Boston attending the Democratic National Convention as a Hawaii Delegate, followed by presentations to the Environmental Protection Agency, New England, the National Marine Fisheries Service, Gloucester, and two trips to Oahu. Now that I have returned to Maui, Hawaii and am able to respond to your letter, I submit the following in response to your proposed individual tax assessment that implies that I owe the IRS $4,217.94.

As I understand it, the IRS Mission is to “Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.”

I request that your office please provide responses to the following questions and statements.

1. Does your office understand that under international law Hawaii is not lawfully a party to the United States of America? The 1893 overthrow of the Hawaii government was unlawful (see US Public Law 103-150). The purported annexation of Hawaii by the United States was unlawful by process. The subsequent alleged Hawaii Statehood process was unlawful due to illegitimate procedure. Therefore, Department of the Treasury has no lawful basis for collecting taxes on personal income from individuals in Hawaii.

2. Does your office understand that there is no legal requirement for paying federal taxes on personal income even for Americans living on lands called the United States (taken from Native Americans), and that paying such taxes is voluntary for Americans under the language of United States law?

3. Does your office understand that if I voluntarily decided to file a tax claim for 2001 that I had three dependents other than myself in 2001 and that your office would likely owe me money under your law? Please recalculate your figures with three additional dependents to confirm this for yourself. If you would like to refund me what your office believes is due me, then I would happily accept your kind donation.

4. Could your office please provide me with the specific citation of law that requires a Native Hawaiian living under duress of the belligerent United States occupation of Hawaii to pay a US federal tax on my personal income generated as an individual residing in Hawaii?

Until such time that such citation of law is delivered to me and proves beyond any doubt that I lawfully owe the United States Department of the Treasury payment of federal taxes on my personal income, I reserve the right to refuse payment to serve two purposes:

a. To protect my family’s meager assets that are used to keep my family alive, and

b. To avoid wasting my time and IRS legal counsel’s time litigating charges of extortion. (Until money changes hands, no extortion has been committed.)

The Hobbs Act defines "extortion" as "the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right." 18 U.S.C. S 1951(b)(2).

I would be happy to engage the Department of the Treasury in a US court of law if this is your office’s preference. This would provide interesting material for the media and help to disseminate information on the belligerent occupation of Hawaii. Thank you very much for your consideration, and for any responses.

Sincerely, Isaac D. Harp

Attachment: Page 1 of Letter Number: 2566(SC/CG), Dated 07/12/2004, SS# 575-74-3085, 2001


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