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HUD鈥檚 Office of Inspector General just released a 聽advising contractors, property inspectors, Section 8 housing administrators and Realtors how to recognize antigovernment sovereign citizens occupying vacant properties or using false deeds to support leasing.

The FBI, which considers sovereigns a domestic terrorism threat, and HUD鈥檚 Inspector General both 鈥渉ave noticed a resurgence of sovereign citizen fraud鈥� in federal housing programs, the report says.

In the last four years, HUD investigators have presented a number of cases to federal attorneys for prosecution, resulting in 20 convictions and criminal recoveries of more than $17 million, the report says. Sovereign citizens also have been investigated for not only illegally occupying HUD properties, but also improperly deeding HUD-owned properties to themselves, the report says in detailing various scams.

Frequently, when sovereign citizens occupy a vacant property, they post a warning notice or deed on the door or window. 鈥淚t is often written in legal gibberish,鈥� the government report says.

Sovereign citizens are antigovernment extremists who do not recognize the authority of the federal government. They believe they are separate or sovereign from the United States and therefore exempt from federal, state and local laws as well as taxing and licensing requirements.

In recent years, there have been several instances of violent encounters involving police and sovereign citizens.

鈥淭hese groups take advantage of state laws that require county clerks to accept and file any quit claim deed presented to them as long as the forms are properly signed and fees are paid,鈥� the report says. These sovereign citizen scams are often successful, it says, because no proof of ownership is required.

The report says HUD鈥檚 Inspector General recently has become aware of sovereigns participating in the HUD subsidized Section 8 Housing Choice Voucher program, posing as landlords, using properties that they do not own.

鈥淭hey provide fraudulent deeds to housing authorities to establish ownership rights so they can participate as a landlord,鈥� the report warns.

Sovereign citizens also have been active in 鈥渇oreclosure-rescue schemes.鈥� In these scams, sovereign citizens find homeowners who are in mortgage default 鈥渢o quit claim their deeds to them with the promise of stopping the foreclosure.鈥� Then, extremists collect monthly payments from the homeowners, promising to return the deeds in the future. Desperate homeowners frequently believe these lies, the report says.

鈥淓ventually, banks evict the homeowners, and they have to contend with severely damaged credit histories,鈥� the report adds.

The report also warns people dealing with HUD housing that they likely could have contact with sovereign citizens 鈥渨ho may unlawfully occupy houses you inspect or may fraudulently represent themselves as potential landlords for the Section 8 program.鈥�

鈥淓ngaging in a verbal argument with these individuals could spiral into a violent confrontation,鈥� the government report warns. 鈥淚f you feel that you are in danger, contact local law enforcement immediately."

鈥淯nlike other squatters, sovereign citizens may retaliate if you confront them,鈥� the report warns. Sovereign citizens are known to often file frivolous liens, seeking huge for penalties.

鈥淲hile in most instances, you can get these claims dismissed, it takes time and money to do so [and] the claims may affect your credit or delay financial transactions,鈥� the report adds.