Thomas and Michelle Selgas have long disputed owing federal taxes. The former Garland resident even questioned his U.S. citizenship and the legitimacy of his Social Security number in his attempt to thwart IRS collection efforts, public records show.

He and his wife did business in gold coins. And they filed an “affidavit of incompetency,” claiming not to understand what the IRS was talking about.

But they didn’t just hide behind “frivolous” anti-tax arguments, federal prosecutors say. The couple hid money from the government using their lawyer’s client trust account, according to prosecutors. For that, they have been charged with tax evasion and conspiring to defraud the government. As of July, their tax debt had reached about $979,000, prosecutors said.

Their lawyer for civil matters, John Green, also is charged in the case — with conspiracy to defraud the United States — for his role in the alleged scheme. Green paid the Selgases’ personal expenses like credit card bills out of his trust account, the indictment says. The trust accounts are supposed to hold clients’ money for short periods.

Green, a conservative member of the Idaho state legislature who’s licensed to practice law in Texas, holds contempt for the federal government and believes the IRS is corrupt, court filings say. He hasn’t “voluntarily” filed a tax return since at least 2000, prosecutors said.

All three are scheduled to go to trial in January in Dallas.

John Green (YouTube)

The case highlights the growing problem of tax evasion in the U.S., experts say, particularly involving tax protesters, also known as tax defiers. The Anti-Defamation League calls such people anti-government extremists. An April report by the Brookings Institution, a Washington D.C. nonprofit, estimated that the annual amount of unpaid taxes is about 75% of the size of the federal budget deficit.

“People who evade taxes are not just cheating the government, they are also stealing from their neighbors who are following tax laws and regulations,” the report concluded.

The Selgases tax debt stems from a $1.1 million payout they earned from a 2005 patent infringement lawsuit involving MyMail, a tech company in which they were partners, authorities say. The couple did not file a valid income tax return for the 2005 tax year and did not pay taxes on their $1.5 million in income that year, prosecutors said.

The couple used the windfall to buy and sell gold coins to try to hide their income from the government, prosecutors say. The Selgases also bought and sold real estate using gold coins, prosecutors say. For example, they bought an Athens property in East Texas using 1,667 gold coins worth $385,000, authorities said.

“By conducting their affairs in this manner, the Selgases were able to keep money out of bank accounts in their names and impair and impede the IRS in the assessment … and collection of taxes,” said Mara Strier, a Justice Department trial attorney, in a recent filing in the case.

The Selgases also “substantially undervalued their income” using “the face value of gold” rather than its market value, Strier said in court filings.

All three were indicted in July 2018. If convicted, the Selgases face up to five years in prison for tax evasion and up to five years for the conspiracy charge. Green also faces a maximum of five years in prison, if he’s found guilty.

Thomas Selgas (YouTube)

“Ms. Selgas is not guilty of these charges,” said John Helms, her attorney. “She should not have been charged in the first place. We are confident that the jury will see that.”

Attorneys for Thomas Selgas and Green did not respond to requests for comment.

Mark Pitcavage, senior research fellow with the Anti-Defamation League’s Center on Extremism, said the tax protest movement appeals to several personality types.

“Some of the people are just so angry at the notion of the government taking their taxes that they’ll try anything to stop that,” he said. “Or they’re so desperate for the money, they’ll try anything to keep it.”

However, there are degrees of devotion, he said, from dabblers to those who embrace the bogus pseudo-legal arguments wholeheartedly.

“The real true believers are the ones who go down fighting,” Pitcavage said. “If an actual attorney is using tax protest arguments, then you’ve got to think they’re to some degree a true believer; that their ideology has blinded them to the reality of the law.”

Barred

Green, 60, lives in rural Idaho and maintains his law office out of a converted barn on the Selgas’ East Texas property, court records show. He and Thomas Selgas are longtime friends and business associates who are partners in one of Selgas’ companies, court records say. And Thomas Selgas assists Green with his law practice, their attorneys said last year during a court hearing.

Green has compared the U.S. government to Nazi Germany, a federal judge wrote in a December filing.

Robert Kemins, a Justice Department trial attorney, wrote in a recent court filing that Green “held the view that sheriffs have the power to resist federal laws and arrest federal officials they believe are violating the Constitution.”

Green, who has run for sheriff in the county in which he lives, told an Idaho newspaper earlier this year that the IRS is a “criminal organization.”

He was elected to the Idaho legislature after being indicted in Texas.

Green says he’s being targeted because of the many tax cases he’s filed against the IRS. He said in a recent filing that he doesn’t challenge the validity of tax laws but holds a different interpretation of those laws.

A former police officer, he obtained his law degree in 1986 from South Texas College of Law. The conservative Republican says he is a constitutional lawyer who concentrates on “matters related to liberty.”

Green is chief counsel for the U.S. Bill of Rights Foundation, which describes itself as a “non-partisan public interest advocacy organization” that deals with constitutional issues. Thomas Selgas is the president.

“A sound money advocate, John believes many of the ills affecting our liberty are the direct result of a corrupt monetary and tax system,” his foundation biography says.

Workers enter the IRS building in 2014, in Washington, D.C. The IRS alleges that Texas lawyer John Green helped his clients, Thomas and Michelle Selgas, hide their income. (File Photo / TNS)

Green’s work defending tax protesters in Texas has gotten him in trouble before.

A federal judge in the Eastern District of Texas, which includes Collin and Denton counties, barred Green in 2004 from practicing in that district for five years for unethical conduct. The judge ruled that Green falsely accused a federal magistrate judge of lying while defending a tax protester in a criminal case.

In that case, Green also made controversial arguments that prosecutors called “frivolous” and “nonsensical.”

For example, he told the judge that “an entity known as the ‘United States of America’ lacked jurisdiction outside the District of Columbia.” And Green filed court briefs in the case that had been written by a tax protester who wasn’t an attorney, court records show.

Green’s attorney, Michael Louis Minns, told a newspaper in Washington state that federal prosecutors weren’t interested in his client “until he was nominated for the state congress.”

“The government’s heavy burden is to prove that Green had a malicious state of mind,” Minns wrote in a court filing. “To date, its lawyers have neither offered nor hinted at having such evidence.”

Gold standard

Thomas Selgas, 58, is described in various online biographies and articles as a tech industry entrepreneur and inventor who holds numerous patents. He also claims to be a monetary policy expert.

But Strier, the government lawyer, said in court filings that the Selgases espouse “tax-defier theories,” and she asked the judge not to allow the couple to make those arguments during the trial, for fear of confusing the jury.

In upholding a legal judgment against the couple, the Fifth Circuit Court of Appeals in 2007 wrote that Thomas Selgas’ conduct in the case did not appear to be a legitimate attempt to resolve contested legal matters.

“We have no sympathy for Selgas’ behavior or his arguments in defense of what appears to have been a brazen attempt to avoid a few thousand dollars in legitimate tax liability,” the court said in its ruling.

Strier said the Selgases and Green knew their “gold standard” theory had been repeatedly rejected by federal authorities and the courts.

“The defendants repeatedly defied the tax laws despite being told by the IRS and other authorities that their position was frivolous,” she wrote.

Strier says she plans to introduce evidence during trial that Thomas Selgas was a client of American Rights Litigators, which police raided in 2004. Federal prosecutors have described the Florida organization as “the Walmart of tax fraud.” It was started by Eddie Ray Kahn, who is known for providing bad tax advice to Hollywood actor Wesley Snipes.

Kahn and Snipes were convicted of tax evasion in federal court in 2008 and sentenced to prison time.