色多多

Herman Estes Jr. told a real estate agent that he was willing to pay $1.3 million up front for a home in Old Mill Plantation, an upscale housing community in southwest 色多多 County.

Estes, at the time a 40-year-old from Fieldale, backed up his cash offer by saying he had recently received an $18.3 million tax refund from the Internal Revenue Service.

On April 12, 2023, he tendered a cashier鈥檚 check for $1,307,199.43.

The sale closed two days later, and Estes moved with his family into the six-bedroom house at the foot of Bent Mountain.

It didn鈥檛 take long for the truth to come out: The cashier鈥檚 check 鈥� purportedly drawn from the Federal Reserve Bank in Richmond 鈥� was determined to have been fabricated by Estes in the most unusual of frauds.

Rather than the multi-millionaire he claimed to be, Estes was in fact a convicted felon.

In 2005, he fatally shot one man and wounded another in an altercation at a West Virginia convenience store, according to court records. After serving prison time for manslaughter, he was charged with about a half dozen other offenses, including a felonious assault charge for which he was found not guilty by reason of insanity.

And while in the midst of negotiating the real estate deal, Estes pleaded guilty in 色多多鈥檚 federal court to possession of a firearm as a convicted felon.

He was free on bond, awaiting sentencing on that charge, the day he moved into his new home on Old Mill Plantation Road.

On Thursday, he received a seven-year prison term from U.S. District Judge Elizabeth Dillon for offenses that included bank fraud, mail fraud, wire fraud and filing false tax returns with the IRS.

Prosecutors say the crimes were part of Estes鈥� fringe sovereign citizen ideology. Sovereign citizen is an extremist movement whose adherents believe they can ignore the laws of what they consider to be an illegitimate and tyrannical government.

A large number of crimes, including financial scams, have been attributed to the group, according to the Anti-Defamation League.

鈥淚t鈥檚 one of the craziest cases I鈥檝e been involved with,鈥� said Jimmy Turk, a Radford criminal defense lawyer who has handled many high-profile cases during his 40 years in practice.

鈥淏ut it鈥檚 also kind of scary,鈥� Turk said of the ease in which Estes escaped close scrutiny from real estate, banking and IRS officials. Turk served as a stand-by attorney for Estes, who represented himself.

The scheme was both successful and short-lived.

鈥淏ecause it was so far-fetched, I think it was doomed for failure,鈥� Dillon said in pronouncing a sentence that was about three years short of what the government asked for.

The scam鈥檚 plan

This is what happened, according to court documents and earlier testimony:

In 2022, Estes filed a tax return for the previous year that claimed he was entitled to a $18,325,484 refund. The IRS refused to pay the claim, which contained such nonsensical items as a $12.5 million interest payment to Estes by an assistant U.S. attorney who prosecuted him for illegally possessing a firearm.

But Estes used a form letter from the tax agency, which referenced his $18.3 million claim, as part of his scheme.

In January 2023, he contacted real estate agent Joshua Desforges with MKB Realtors, saying he had a budget of $1.5 million for a home. He supported the claim by presenting to Desforges the IRS form letter and other false documents.

Desforges then agreed to show the Old Mill Plantation home to Estes, based on his stated ability to pay.

About a month later, Estes put Desforges in touch with a man he said was the manager of his trust. That man was Daniel Heggins, a fellow sovereign citizen follower who had twice been convicted of federal fraud charges in North Carolina, where he lived.

In a telephone call, Heggins pretended to be the administrator of a trust that didn鈥檛 exist, telling Desforges that he approved of the sale and that Estes was good for the money.

The two conspirators also created fake documents using a sovereign citizen 鈥渢ool bank鈥� online, prosecutors said.

The scam fell apart when the Federal Reserve Bank, which does not issue cashier鈥檚 checks or act as a retail banker, refused payment. An investigation that followed turned up more oddities.

Informed by Desforges that the check had been refused, Estes told the real estate agent to contact his representative, then-Treasury Secretary Janet Yellen.

Estes said he did not trust public banks, and dealt only with the federal reserve.

鈥楾hey all dropped the ball鈥�

鈥淯ndoubtedly, Estes鈥� mental health played a role in this case,鈥� prosecutors Lee Brett with the 色多多 U.S. Attorney鈥檚 Office and Andrew Ascencio with the Department of Justice鈥檚 Tax Division wrote in court papers.

Despite that, Estes has shown 鈥渁 canny ability to understand and exploit the legal system,鈥� a government sentencing memorandum stated. 鈥淭he court should not confuse what may at times appear to be farcical sovereign citizen claims with a lack of sophistication on the part of Estes.鈥�

鈥淎fter all,鈥� prosecutors wrote, 鈥淓stes successfully obtained a $1.3 million home through fraud, all while under court supervision.鈥�

Even after the scheme collapsed, Estes refused to move out of a house to which he still held the title. Eventually, a 色多多 County judge deeded it back to its previous owner, Quality Development Group, which built the custom home and sold it brand-new to Estes.

鈥淭hey all dropped the ball,鈥� Husain Alam, a co-partner of the development group, said of the real estate and banking officials who missed what should have been bright red flags.

Alam鈥檚 business sued Homestead Settlement Services, which as its closing company was responsible for ensuring that the transaction was properly conducted.

Estes mailed his cashier鈥檚 check via a commercial carrier to Homestead; the lawsuit accused of it of failing to investigate his creditworthiness.

鈥淎 basic internet search would have revealed that Mr. Estes was a convicted murderer and had pending federal criminal charges,鈥� the lawsuit filed in 色多多 County Circuit Court states.

A call to Homestead鈥檚 色多多 office was not returned Friday. But in an answer to the lawsuit, the company denied the allegations and contended, among other things, that the seller of the property was responsible for conducting due diligence of the buyer.

After regaining ownership of the home, Quality Development Group found another buyer who paid $1.2 million.

The lawsuit is still pending, according to court records.

Desforges is not named as a defendant. In a brief interview last Thursday, he said he no longer works for MKB and now runs his own real estate firm. Asked for additional comment, he said he would call back later. No call had been received by 5 p.m. Friday.

In the criminal case, Homestead was considered a victim in that Estes was ordered to pay $6,479 in restitution for the company鈥檚 lost fees and unpaid work.

Heggins gets two years

Shortly before Estes was sentenced to seven years in prison, his co-defendant took the same seat at a defense table in U.S. District Court in 色多多.

A jury had convicted Daniel Heggins earlier of aiding and abetting in the wire fraud, but found him not guilty of participating in the conspiracy. He returned to the courtroom Thursday to be sentenced by Dillon.

Defense attorney Paul Beers argued that his client did not profit from the real estate transaction and played a minor role. His only involvement was to take a telephone call from Desforges, the real estate agent, and vouch for Estes鈥� claim to be a wealthy man, Beers said.

Beers also objected to a reference in a government pre-sentence report to Heggins being affiliated with a 鈥済ang鈥� it called the Moorish Nation, an African-American subset of the sovereign citizen movement.

The defense attorney asked Dillon not to consider Heggins鈥� involvement in a religious organization that tells its members that the United States lacks jurisdiction over them.

鈥淲e don鈥檛 punish people for having weird ideas,鈥� he said.

Dillon imposed a two-year sentence. 鈥淚 do take this seriously. But is this the most serious fraud case I鈥檝e seen? No, it is not,鈥� she said, citing the limited duration of the scheme and the relatively small financial loss to its victims.

Estes refuses mental treatment

After a brief recess, Estes was led from a holding cell into the courtroom to be sentenced. He carried with him a large stack of legal documents and a reputation for making forceful 鈥� but often confusing 鈥� arguments as his own attorney.

On this day, he had little to say.

鈥淚 ain鈥檛 got no argument,鈥� he told Dillon, who appeared surprised by his silence. 鈥淯sually you like to talk to me,鈥� she said. 鈥淭hat鈥檚 been my experience in the past.鈥�

In earlier court filings, Estes called the judge 鈥渁rmed and dangerous鈥� and accused her of 鈥渂reach of trust, laundering money ... trespassing tax fugitive, and trespass on private intellectual property.鈥�

Although no one asked Dillon to recuse herself, she considered it on her own motion and decided not to step aside.

鈥淗ere, to the extent Estes鈥� assertions are decipherable at all, his accusations against the court are meritless and would not cause a reasonable observer to believe the court might be biased against him,鈥� Dillon wrote in a Jan. 15 opinion.

As part of her sentence, Dillon recommended that Estes receive mental health treatment in prison 鈥� saying she was concerned about his statements that he planned to move back into his ill-gotten home upon his release.

Estes has received court-ordered mental treatment in the past, but often refused to take anti-psychotic medications or participate in therapy for conditions that include bipolar disorder and paranoid schizophrenia.

He rejected the judge鈥檚 recommendation for treatment, telling her: 鈥淚鈥檓 not going down that road again.鈥�