Deficit spending occurs when Congress approves such act. The U.S. Treasury can then send a Treasury security (bill, bond or note) as collateral to the FRBNY. The FRBNY will then increase the government\'s line of credit (book entry money) by that amount. The act is identified as a "loan" from the Federal Reserve. The source of the loan is never identified as having the value before the "loan" but somehow the money comes from an unknown source. The government pays for services by vendors from the account. When a vendor requests "cash" from a commercial bank after depositing the check, the vendor will receive Federal Reserve Notes (FRN), i.e. an voucher acknowledging debt from the Federal Reserve system identified as a legal tender. A legal tender is an alternate item from that which was contracted. The vendor requests "dollars" when the check is cashed but is given FRN\'s as a substitute which, by law must be accepted for the requested item.

The FRBNY will sell the Treasury security by auction with a superficial appearance by the U.S. Treasury.

AUCTIONS OF MARKETABLE TREASURY SECURITIES

Auctions of Treasury securities are jointly managed by the FRBNY and select government branches. They are open to the public. The bulk of sales is to the Primary Dealers who place bids with the FRBNY.

Each security identifies how much goes for roll-over and how much is for deficit spending. Approximately 85 percent of auctioned securities are used to fund roll-over for maturing or redeemed Treasury securities. Security value for deficit spending is about 15 percent.  In this Complaint, the terms will be used to designate 100 percent of each security for clarity.

ROLL-OVER SECURITIES

Funds received by auctioning securities for redemption of securities in the market are credited to a government account by the FRBNY. Since they are credited to the government, there is no increase in the National Debt nor is there any increase in the amount of currency in circulation. The government balance sheet lists these funds as assets under Marketable securities.

The Treasury makes a list of securities that are being recalled before maturity with the price they will pay. The Primary Dealers are largely responsible for collecting listed or maturing securities for redemption.

The FRBNY has exclusive management and accounting control of redemption accounts for the government. The accounts have never been independently audited nor are they reported to Congress as required by law.

DEFICIT SPENDING SECURITIES

Deficit spending securities are auctioned in the same manner as roll-over securities. While temporarily shown on government balance sheets, the funds are not available to pay for government services. If the funds belonged to the government, there would be no increase in the National Debt nor would there be an increase in money in circulation (inflation). If it were publicly identified that the money goes to the Federal Reserve system, it could lead to great public hostility. The retention of the value within the Federal Reserve is therefore concealed.

Revenue from both deficit and roll-over auctioned securities appears on the government balance sheet as issues under "Marketable" securities. Expenses for roll-over securities are listed under "Redemptions." FRBNY has exclusive control of accounts for redemption. This authority is used to pay the defendants their share of profit from deficit spending.

While the funds from all auctions appear on the balance sheet of the government, the FRBNY has exclusive authority to handle disbursements of redeemed securities. This authority is used to cover paying funds from deficit spending to the owners of the BOG.

Funds received from auctioning deficit spending securities are ostensibly used to pay back the "loan" that created the book-entry money-while concealing the payment from public records. The defendant owners of the BOG advance no consideration for the above "loan" or transactions. If the defendants has advanced value in the "loan," there would have been no increase in the amount of money in circulation (inflation) and there would have been no increase in the National debt.

The owners of the BOG receives the entire value of deficit spending as a net profit by this handling. The net profit of the Federal Reserve system legally belongs to the government.

It is impossible to pay off the National debt that is created by the above transactions. Every "dollar" in circulation has been created as the principal of a "loan" but requires repayment of principal plus interest. The interest is never created; it does not exist. It is a loan that cannot be culminated.

Defendants Primary Dealers, whose ancestors contrived and established the scam to acquire humungous profit, receive funds from deficit spending securities with full knowledge that the money is the fruit of a scam.

Defendant Board of Governors is a full and willing complice in the scam and provides concealment of its action from public awareness.

The National Debt in February 2009 was $10.6 trillion; the debt on February 2015 is $18.1 trillion. Total amount of funds concealed within the statutory limit of six years exceeds $7.4 trillion.