My name is Todd-Ellis; Swanson.  For those who don’t know me I was a CPA from November 1995 until December 30, 2005.  I was trained about 7 years ago by another CPA, Tom Schauf, to be an expert witness regarding bank loans, specifically, whether the bank actually loaned you any of their money when you got your mortgage loan or car loan.  Tom is the author of America’s Hope: To Cancel Your Bank Loans Without Going To Court, The American Voters vs. The Banking System and Top Secret Banker’s Manual.  I will explain this banking system by briefly summarizing the 6 page banking letter I have provided to people who have requested it, to trustees who have requested it on behalf of trusts and then tell you what has happened to me for exposing the truth.  Regardless of what has happened or may happen, it is my conviction as a Christian that I am to obey God and leave the consequences to Him.

When a bank makes a loan they must follow Generally Accepted Accounting Principles (GAAP).  Title 12 of the United States Code, § 1831n (a) requires all Federally-insured (FDIC) banks to follow GAAP.  GAAP requires the use of double entry bookkeeping journal entries.  Double entry bookkeeping journal entries work like this.  When a bank accepts cash, checks, negotiable instruments, promissory notes, or any other similar instruments from a customer and deposits or records the instruments as an asset, they must record an offsetting liability that matches the asset they accepted from the customer.  The liability shows they owe the customer the money they accepted from the customer.

You see, money is not limited to just cash.  Money is anything that has value and banks or people accept as money and money does not have to be issued by the government per Federal Reserve Bank of New York publication I bet you thought… by David H. Friedman Fourth Edition 1984.  Page 9 explains that cash and checkbook money have equal value.  Page 27 explains that the banks create new money by depositing IOU’s, promissory notes, offset by a bank liability called a checking account balance.  Page 5 says, “Money doesn’t have to be intrinsically valuable, be issued by a government or be in any special form…”.  Federal Reserve Bank of Chicago publication Modern Money Mechanics by Anne Marie L. Gonczy, revised June 1992, shows standard bookkeeping entries from pages 7 to 33 proving that money is recorded as a bank asset and a bank liability is evidence of money a bank owes.  The bookkeeping entries prove that banks accept cash, checks, drafts and promissory notes as money deposited to create checkbook money, which are bank liabilities, which show that the bank owes money to the one who deposited money at the bank.  Federal Reserve Bank of Dallas publication Money and Banking page 11 explains that when banks grant loans, they create new money.  The new money, new “loan becomes a new deposit, just like a paycheck does.”  Modern Money Mechanics page 6 says, “What they do when they make loans is to accept promissory notes in exchange (an exchange or swap is not a loan) for credits to the borrowers’ transaction accounts” (emphasis added).  Federal Reserve Bank of Chicago publication Two Faces of Debt by Anne Marie L. Gonczy and Timothy P. Schilling, revised September 1992, discusses how deposit liabilities arise.  Page 19 says, “But a depositor’s balance also rises when the depository institution extends credit—either by granting a loan to or buying securities from the depositor.  In exchange for the note or security, the lending or investing institution credits the depositor’s account or gives a check that can be deposited at yet another depository institution.  In this case, no one else loses a deposit (at that point in time) (emphasis added).  The total of currency and checkable deposits—the money supply—is increased.  New money has been brought into existence by expansion of depository institution credit” (emphasis added).  

So what happened is the bank accepted your promissory note as money and deposited the money/promissory note into a checking account with your name on the checking account without disclosing this to you.  This means that the bank recorded the promissory note as a loan from you to the bank.  When the bank deposited your $100,000 promissory note into a checking account, the bank created $100,000 of new bank credit money (the bank did not loan money, they loaned the credit of the bank). I believe the bank, either out of ignorance or deceit, concealed the substance of the transaction, the bookkeeping entries, that would prove you were the lender and the bank was the borrower and the bank uses the form, the promissory note, to try and convince you that the opposite occurred and that you were the borrower and not the lender.

For those interested in learning more, I unreservedly recommend reading the books Money¹ and The New Economic Disorder².

1.  Ewart, James E.  Money.  Seattle, Wash.: Principia Publishing, 1998.
 (ISBN 0-9663570-0-0.)

2.  Bates, Larry.  The New Economic Disorder.  Lake Mary, Florida:  Creation House, 1994.

 (ISBN 0-8841938-3-7.)

In June, 2004 I received several letters from the SC Board of Accountancy (Board) concerning complaints that had been filed against my CPA license by several bank attorneys.  These same complaints were also filed against my NC license.  The Board requested I provide them with all the documentation I had to support what I stated in my letters.  I provided the Board with that information.  One year latter I was subpoenaed to appear for a hearing before the Board.  That hearing was postponed until October 27, 2005. 

The hearing lasted approximately 12 hours.  The transcript is 376 pages.  I provided 24 exhibits containing approximately 189 pages and I had more exhibits to submit had there been more time.  Of the exhibits, 25 pages were from 3 college level Accounting/Economic/Banking textbooks; 21 pages were from 2 college level history books; 38 pages were from 3 Federal Reserve Bank Publications; 31 pages were from 2 Continuing Professional Educations courses I took on Bank Auditing and Accounting; and 8 pages were from the Congressional Record.   I was told secondhand that the board reached their decision in less than 30 minutes.  No one rebutted the exhibits, I relied upon for the details in my letter, during the hearing and the exhibits were not rebutted in the order.  In fact, the exhibits are never mentioned and yet it takes a close scrutiny of the exhibits to understand and grasp the subject matter as it relates to my letter.

Two of the Board members are Partners in the same CPA firm.  This firm offers in-house “Mortgage Broker Services”, thus I believe they receive “loan origination fees”.  This is a very apparent and egregious conflict of interest considering the subject matter of the hearing.  It is made even worse by the fact that the transcript shows the CPA who made the motion for my sanctions and the CPA who seconded that motion are the very same two Partners who offer “Mortgage Broker Services”.  Further, the Partner who made the motion is the same one who had direct communication with the State’s prosecuting attorney.  Further, the transcript shows this same Partner did not ask one relevant question of me or any other witness during the entire hearing.

1.  Sometime during a break before lunch, Dr. Larry Bates (my expert witness) overheard Debra Turner (Board member), the female CPA sitting to the right of Chair talking with Mr. Geoffrey Bonham (state’s prosecuting attorney).  She stated something to the effect that she or the board had heard enough and to wrap it up and get it over with.  All this before Dr. Bates or me testified.  Dr. Bates has done an affidavit stating this.  See the Board's own code section below for Debra's violation and penalties.  She put forward the motion for my penalty.  She asked no relevant questions, only where I worked, for how long, etc....

2.  Debra Turner and McRoy Skipper (another board member that was present) are partners in the below CPA firm.  The link will take you to the services they offer.  One of the services is Mortgage Broker Services.  So as Dr. Bates said to me, "They are receiving loan origination fees".  Notice below in the transcript that Turner makes the motion for my penalty and that Skipper is the one to 2nd it.  

http://www.websterrogers.com/services/index.shtml

3.  It also appears from the Board’s website that 2 possibly 3 board members' terms expired on or before June 30, 2005.  If so how could they be there?  The CPA firms own newsletter attachment shows their terms expired June 30, 2005.

SECTION 1-23-360. Communication by members or employees of agency assigned to decide contested case.

Unless required for the disposition of ex parte matters authorized by law, members or employees of an agency assigned to render a decision or to make findings of fact and conclusions of law in a contested case shall not communicate, directly or indirectly, in connection with any issue of fact, with any person or party, nor, in connection with any issue of law, with any party or his representative, except upon notice and opportunity for all parties to participate. An agency member:

(1) May communicate with other members of the agency; and

(2) May have the aid and advice of one or more personal assistants.

Any person who violates the provisions of this section shall be deemed guilty of a misdemeanor and upon conviction shall be fined not more than two hundred fifty dollars or imprisoned for not more than six months.

Here is part of the final board meeting.  Notice she is the one to voice the motion and her partner 2nds it.

                MR. BURKETT:  On the record, there was no

          9     vote taken during executive session.

         10               MS. TURNER:  I want to make a motion that the

         11     Board find that Mr. Swanson has violated the

         12     Accountancy Practice Act, and that his license be

         13     revoked and he not be allowed to apply for re-licensing

         14     for three years.

         15               MR. SKIPPER:  Second that motion.

         16               MR. BURKETT:  Any discussion?  All in favor?

What my expert, Dr. Bates, stated on the record was ignored and twisted in the Final Order.  The order does not accurately reflect the testimony put forward on the record.  My CPA licenses were basically stolen by other CPAs who are in bed with the banks, my character was maligned and I have been damaged monetarily.