ASHLAND A federal grand jury has charged a Carter County woman with defrauding the Internal Revenue Service of $9.7 million.

Karen D. Smith, aka Karen D. Hable, was indicted July 15 on a single count of wire fraud, after prosecutors said she filed a false tax return for 2018, resulting in a refund of nearly $10 million.

A warrant filed last year stated Hable and her husband, Kenneth Smith, used sovereign citizen logic to justify stealing millions from the federal government.

The sovereign citizen movement is a group of folks who believe federal laws do not apply to them. For more information on how that typically turns out for them, YouTube has plenty of videos showing them getting Tased after getting lippy with police.

According to the warrant, the Smiths filed a 2018 tax return claiming a $10 million income with a $10 million loss for the Karen Denise Hable Trust. That resulted in the government — who by sovereign citizen logic doesn't apply to them — cutting a check for the couple for $9.7 million in U.S. currency, printed by a government sovereign citizens say has no authority.

Of course, an IRS review discovered the return was bogus, according to the warrant.

If convicted, Hable faces up to 20 years in federal prison and $250,000 in fines. The feds are asking for their money back.

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