Sean and Melissa Morton arrested

        Passing on gossip is not the most noble of this blog's raisons d'être to be sure, but this is too good to pass up. Yesterday, an anonymous Wikipedia editor using the name "Nofway" added the following content to Sean David Morton's article. The text was sourced as copied from http://www.justice.gov/usao-cdca/pr/hermosa-beach-couple-arrested-federal-charges-related-tax-scam-and-passing-false-checks, which looks authentic but it is just possible that it's spoofed.

        So I make no claim to the authenticity of this information, but enjoy it anyway. It's plausible because the Mortons are known to be in deep shit with both IRS and SEC^{note 1} (read the the article if you need to know why.) Bear in mind that the Mortons are very good pals of both Mike Bara and Kerry Cassidy. Remember this pic from the Summer of 2012? Sean and Kerry swanning around Europe, leaving Melissa to interview Mike on the Internet radio.

photo credit: Project Camelot

        Strange synchronicity -- that four year old interview also covered Ken Johnston's accusation of Apollo negative tampering, that I wrote about again yesterday. But I digress — here's the dirt.

Two Hermosa Beach residents were taken into custody yesterday after being indicted by a federal grand jury on a host of charges related to a scheme to defraud the Internal Revenue Service, which included passing bogus checks and bonds as a way to pay off debt for themselves and others.

On February 1, 2016 Sean David Morton, 58, and his wife, Melissa Ann Morton, 50, were expected to be arraigned in federal court in Los Angeles on a 56-count superseding indictment that was returned by a grand jury on January 27. The couple was arrested by special agents with IRS - Criminal Investigation in San Pedro Sunday morning after disembarking from a “Conspira-Sea Cruise.” According to the superseding indictment, Sean David Morton filed a series of false income tax returns for the years 2005 and 2010 that sought millions of dollars in refunds. Melissa Morton allegedly filed several false tax returns for the year 2007. The couple “caused multiple copies and multiple versions of their income tax returns to be submitted to various IRS service centers throughout the United States in 2009 and 2010,” according to the indictment, which alleges they attached false Forms 1099-OID to support their claims for refunds. The indictment specifically alleges that Sean David Morton filed a false 2006 income tax return 2010 that requested a refund of $2,809,921, and that in 2012 he filed a document that sought a tax refund of $1,560,634 for 2006.

In relation to the scheme, the indictment alleges that Sean David Morton on multiple occasions submitted to the IRS documents he called “Coupon for Setoff, Settlement, and Closure” in the amounts of $5,286,867 and $8,429,763. “These fictitious financial instruments were a purported bond in exchange for the refunds they sought from the IRS,” according to the indictment.

Melissa Morton allegedly presented to the IRS in 2010 a “Coupon for Setoff, Settlement, and Closure” in the amount of $44,450 as a purported bond in exchange for a $14,450 refund that she sought. And, in 2013, both defendants allegedly presented to the IRS two “Non-Negotiable Discharging Bond and Indemnity” in the amounts of $10 million for Sean David Morton and $600,000 for Melissa Morton.

If they are convicted of the charges in the superseding indictment, Sean David Morton would face a statutory maximum sentence of 650 years in federal prison, and Melissa Morton would face a statutory maximum sentence of 625 years.

Update 1:
The story is now confirmed.

Here's the full 56-count indictment.

Update 2:
        A reporter who is legally trained has now reported from the ConspiraSea cruise, and it's well worth reading. An excerpt:

"Winston Shrout and Sean David Morton were the subjects of my Day 2 post. That post was much more critical and aggressive than I expected any of my writing to be. To the extent that it earned me a little browbeating from a Shrout fan who was upset that I criticized him....I couldn’t hold back. As I’ve said I’m a lawyer, and I know that what Shrout and Morton were teaching was absolute crap. It wasn’t arguably right. It wasn’t thinking outside the box. It wasn’t creative reinterpretation of the law. It was complete nonsense, in that it literally did not make any sense."

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[1] See the SEC's 4 March 2010 complaint filed in US District Court, and the judgement issued on 15 February 2013.