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Posted on March 16, 2012 | Posted in Collections

     We could just as easily have entitled this article as “Gullible” or “Audacious”.

      It seems that people have been promoting a scheme, through radio programs and hotel seminars, entitled “Sovereign Man”. The purpose of the scheme is to allow its adherents to eliminate debt. The program provides valuable tips and documents on how to avoid payment of debt and, better yet, how to deal with pesky judges when brought up before them on motions or contempt charges.

      Some of the more gullible adherents have put this wonderful scheme into practice and have learned, to their disappointment, that the only people who get rich on harebrained schemes are the promoters who convince other people to pay money to learn the schemes.

 Exhibit 1

      Our first adherent surfaced in the courts in Mercedes-Benz Financial v. Kovacevic, a 2009 decision of the Ontario Superior Court of Justice. The schemer purchased a Mercedes for $120,000 by way of a conditional sales agreement. The dealer assigned the contract to the financial institution (the “FI”). The schemer made 7 of 84 payments and then defaulted. The FI obtained a judgment against the schemer for $125,000 and an order requiring the schemer to deliver up possession of the car to the FI. However, the schemer refused to do so. The FI then moved for a contempt order against the schemer.

      After he received the order to deliver up the car, the schemer entered into correspondence with the FI’s lawyer promising to deliver the car and then reneging. Most of his letters were unintelligible, but the schemer managed to postpone the process for over a year. The judge summed up one of these letters as follows:

 “In sum, in response to MBF’s demands that he honour his contractual obligations, Mr. Kovacevic sent the company sets of documents in which he purported to extinguish unilaterally the debt he owed and to direct MBF to accept as payment paper created by him purporting to draw on some account lodged with the Secretary of the US Treasury. None of these documents has any legal effect. From a legal point of view they are worthless garbage.”

      Further, deciding that the best defence is a good offence, the schemer provided a group of documents on which the judge commented:

 The main message of this documentation appeared to be that unless the Court accepted the various papers filed by Mr. Kovacevic as settlement of his liability, the Court would transform Mr. Kovacevic into “public property as the result of enticement into involuntary slavery, kidnapping and plunder. I conclude from this documentation that Mr. Kovacevic is not happy that MBF will not let him keep the car without paying for it and he is upset that MBF can seek the assistance of the Court to enforce its rights. Of course, the documents provide no legal excuse for Mr. Kovacevic’s refusal to return the car to MBF.”

      In his defence in the contempt hearing, the schemer handed up 4 documents. The first two gave some indication as to who he was. The third was mostly gibberish; for example:

 “The statements are preceded by the following recital: ‘for this claimant’s-knowledge of this physical-life/sovran-charter-vessel is with this claim of the livebirth-appellation: i,:Ivica-John: Kovacevic… The text continues with Mr. Kovacevic recognizing God as the creator of all things and he then makes the following statements:

(i) He is made in the image of the creator;

(ii) He claims dominion over all the earth;

(iii) He loves the creator, …

(iv) It is a violation of his faith to serve two masters;

(v) He is a child of the creator and “an heir to the [pre-]paid covenant, although not of this world … and,

(vi) He claims “that my volition and relationship with the Creator supersedes the fictitious language(s) of this world.”

      The fourth document was a security agreement signed by the schemer in his capacities as secured party and debtor. In that agreement, he attempted, through a series of gobbledygook statements sprinkled with legalese, to split himself into two separate persons: a flesh and blood living man and a juristic legal entity. In it, he transfers, as a juristic legal man, all of his property to his newly created flesh and blood living man.

      He claimed that his debt to the FI was from the juristic man, but that the car was held by his alter ego, the living man, and accordingly, he did not have to deliver up the car.


      The judge gave short shrift to the schemer’s arguments, held him in contempt, and jailed him for 5 days. Miraculously, the car was delivered up to the FI.

 Exhibit 2

      The seminars continued and so did the cases. The next case was MBNA Canada Bank v. Luciani, a 2011 decision of the Ontario Superior Court of Justice.

      The adherent in this case had a touch of bad luck. He managed to come before the same judge who presided in the Mercedes case. The judge opened his reasons for decision stating that the “Sovereign Man scheme raises its head yet again.”

      In this case, the adherent decided that he would like to get something for nothing. He registered a financing statement under the Personal Property Security Act (“PPSA”) claiming that he had a security interest against the bank regarding the bank’s $28 million obligation to him. Given that the bank owed nothing to the adherent, it demanded that the adherent discharge the registration. The adherent graciously agreed to do this – if the bank granted to his wife and himself a $125,000 line of credit. The bank refused and commenced an application to discharge the registration.


      The adherent provided documents that were similar, at least in terms of the gibberish and the tone, to the documents filed in the Mercedes case. The financing statement stated,

“This filing is in accord with UCC Sections 1-103, 1-104. Secured party accepts debtors signature in accord with UCC Sections 4-401(B), 1-201(37). Agreement was witnessed by God (the Almighty-God-Jehovah) and Notary Public (Alison Kelly McCalmont) and secured party/creditor…Rosario Luciani…(living man created by the almighty God Jehovah, with authority and dominion recorded and confirmed in Psalm 8 of the Bible KJV, Attorney-in-fact for the ens legis legal fiction person bailor Rosario Luciani as recorded at the County recorder’s office located at Erie County New York, titled sovereign). Bible KJV Deuteronomy 19.15 “…at the mouth of two witnesses, or at the mouth of three witnesses, shall the matter be established.”

      The judge summarised in part the schemer’s response to the bank’s application as follows: “Mr. Luciani … replied on September 9, 2011 on what appears to be a standard form “Sovereign Man” document — copyrighted no less. The response identified Mr. Luciani as a “living, breathing man…Principal, Canadian Sovereign, Sovran, Secured-Party/Creditor, neutral, non-combatant, son of our Almighty Creator, a living, breathing man, created by Almighty-God-Jehovah…”


      The judge noted that, as far as he was concerned, the adherent’s actions were no more than a shakedown.

      The judge discharged the security and granted the bank damages of $500.00, as prescribed under the PPSA. The judge also awarded the bank its full indemnity costs, which he assessed at $7,000.00. Unfortunately, the bank may have difficulty in collecting the award.


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