Berryville man faces prison for defrauding government

Thursday, October 9, 2008

By E. Alan Long

Carroll County News

FAYETTEVILLE -- Wayne A. Hicks Sr., 52, of Berryville and Branson, Mo., pleaded guilty Tuesday in federal court to conspiracy to defraud the United States of income taxes, according to Robert C. Balfe, U.S. Attorney for the Western District of Arkansas.

Hicks faces a maximum penalty of five years in prison and a fine of $250,000, with the possiblity of restitution remaining. He is free on $10,000 bond, but was ordered to turn over his passport and restrict his travel to parts of Arkansas and Missouri without prior approval from the U.S. Probation Office.

The case came to light locally in May 2006 when Internal Revenue Service agents raided two businesses in Berryville.

The Arkansas Securities Department (ASD) in February 2007 issued a cease and desist order, saying customers nationwide had complained that they were unable to access more than $1.6 million in investments and deposits.

Hicks' businesses, ICIS  Inc., and Americans for Lawful Financial Independence and Information (ALFII), operated in a log cabin across the highway from Walmart Supercenter in Berryville.

Hicks previously operated the Liberty Tree Restaurant on U.S. Hwy. 62 on the east side of Berryville, and promoted the sale of the Liberty Dollar from a downtown Berryville storefront.

In the plea agreement, Hicks has admitted that from July 19, 2002, through April 30, 2007, he conspired with others to impede the lawful operation of the Internal Revenue Service.

He created ALFII in 2002 for ICIS, also known as MYICIS, members, along with an alternative banking system. ICIS is an acronym for several names, including Integral Currency Interchange System, Interactive Currency Interface System, and Internet Check Issuance System, and used bank-like accounts and the use of electronic money orders to pay bills and transfer funds, concealing financial transactions from the IRS.

Hicks admitted that ALFII members were persons involved in the Patriot Movement, whose members are generally anti-government and did not participate in paying federal taxes.

Bank accounts for the operations were kept at Bank of the Ozarks, Bank of Eureka Springs, Security Pacific Bank and ANB Financial for short periods of time before each became suspicious of the transactions being conducted and asked Hicks to close them.

Between January 2005 and April 2007, membership in ALFII and MYICIS grew from 800 to 3,000, and drew in approximately $100 million in deposits between April 2003 and October 2006.

The scheme commingled the funds, concealing the true ownership of the moneys from the government, with Digital Money Orders being used like traditional checks.

Arkansas law requires registration and licensing for such an operation by the Arkansas Securities Department, but Hicks never submitted an application.

Through the plea agreement, Hicks admitted that the last tax return he filed with the IRS was for tax year 1992, and agreed that he owes the IRS for taxes incurred on income between 2003 and 2006.

In May 2007, three separate court filings named Hicks and his wife, Lori Hicks, for defrauding clients out of more than $3.5 million. In a Carroll County Circuit Court lawsuit, plaintiffs said that Hicks provided false and misleading information on his Web site, stating that the accounts were being frozen by the government and banking officials because of suspicious activity, and that the couple had devised a fraudulent scheme to funnel funds toward the Hicks' other business operations in Missouri.

In April 2007, a Missouri judgement was filed in Taney County awarding $590,650 to Isaac Wiley after the couple failed to respond and were found to be in default.

In December 2006, a Delaware company, N.R. Smith LLC, won a civil suit against MYICIS claiming breach of contract, and involving $700,000 deposited by Smith, and claiming damages in excess of $500,000.

JP Morgan Chase Bank won a judgment for $157,599, plus interest and attorney fees, in a fraud case against Hicks and another person. A $1 million lien against Hicks was stayed when ANB Financial went into recievership in May.

Other victims include persons in Oregon, Arizona, California, Virginia, New York, Missouri, Washington, Florida, Pennsylvania, Ark­ansas and Colorado, as well as Mexico, many charging the couple with breach of contract, negligence, conversion, actual fraud, deceptive trade practices and unjust enrichment, and asking for relief for "all economic, monetary, actual, consequential and compensatory, damages caused" by Wayne and Lori Hicks and their businesses.

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