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Life Without Debt Leaves Jimmy Phipps Owing Society

By Mark Stuertz 

On the first Tuesday of every month, Phil Brantley hosts a conference call. He never knows who will be calling in, or from where.

Brantley, a retired liquor store owner and one-time manufacturer of surge suppressors from Maggie Valley, North Carolina, took the baton from his mentor, self-made millionaire Jimmy Phipps. Phipps began these Tuesday calls as weekly jolts of motivation and edification back in the early 1990s. His last call was in April 2006—before federal agents hauled him off to face charges of operating an illegal pyramid scheme.

Brantley has been standing in ever since. He does it to keep people apprised of Phipps' status. "You all know Jimmy is not a quitter," he says. "His spirits are really, really good; a lot better than mine would be, especially with what's happened to him."

Brantley's audience reveres Phipps. They sing his praises without prompting. Darwin Marquardt of Eganville, Ontario, calls him the most honest businessman he's ever met. "The other thing about Jimmy Phipps is he keeps his word. His word is his bond," he says.

Phipps is generous, says Sharon Dennis, a truck driver from Grand Prairie. "Jimmy wasn't about making all the money," she says. "He was about educating everybody so that we would all make money."

Call Phipps an evangelist. He was moved by God to preach against the evils afflicting contemporary American life and to show people the path to salvation. But unlike most preachers, Phipps doesn't rail against lust, envy, deceit, greed and wrath, nor does he preach salvation through repentance and faith. Instead he rails against bureaucratic ignorance, political malfeasance and, most especially, the evils of the Federal Reserve and its cabal of international bankers. He preaches salvation through knowledge, cash flow and freedom from the fetters of debt and compound interest.

It isn't long before the call shifts and the conferees trade bits of information culled from lawyers and rights activists, discuss legal loopholes and swap stories on judicial corruption, all focused on one objective: freeing Phipps.

These are the blackest of days for Phipps. On May 4, a jury convicted him on 19 counts of mail and wire fraud, money laundering and tax evasion spiraling out of a multilevel marketing program called Life Without Debt. Phipps operated Life Without Debt and various other MLM programs out of his homes in Alexandria, Alabama, and Colleyville, raking in nearly $25 million.

It all ended outside an Alexandria post office on April 18, 2006, when federal agents brandishing semiautomatic weapons surrounded and cuffed him as he was picking up a postal tub of envelopes stuffed with cash. Phipps was in the midst of making a run for Alabama governor with a promise to establish a statewide retirement system based on Life Without Debt. He faces up to 27 years in prison and is scheduled to be sentenced March 12.

Who is Jimmy Phipps? How did he end up facing—at the age of 60—what is essentially a life sentence on a string of infractions worthy of a counterfeiter or a drug dealer? By all accounts, except the government's, Phipps is honest, hardworking and faithful to friends and family and in his business dealings. He pursued a Spartan lifestyle, giving away most of what he accrued. His only real brush with the law came in 1997 when he whacked a neighbor's aggressive 80-pound dog with a shovel, knocking its eyeball out.

Phipps was railroaded, these callers insist. The government made an example of him because he exposed the lies driving its brute authority and refused to knuckle under, even when faced with spending the rest of his life behind bars. "Jimmy is being fraudulently incarcerated," Marquardt says. He was a threat to the status quo. He was a thorn in the side. It's no coincidence, they say, that Phipps was cuffed and carted off to an Alabama jail the day before President Bush landed in the state to bolster Republican Governor Bob Riley as he headed into a contested gubernatorial primary.

"As soon as he put his hat in the ring, by golly, the man was arrested," says Phil Austin, a retired Toronto real estate broker. The callers view Phipps as a martyr, maybe even a prophet. The conference call takes place a little more than a day after a panic in the credit markets, something they say Phipps saw coming.

"The banks are running scared," says Sophia Newsome, a Phipps devotee from England. "The whole thing is about to blow. In fact, it has already blown. It's just that the public doesn't know. The whole world is on the brink of financial disaster."

James Phipps has a quirk that intensifies as his monologues gather steam. Speaking at a normal gait, he unreels his words in a droning monotone buoyed by a slight, carefully measured West Texas twang. "They call me governor here, even the guards," he says with a low, resonant laugh.

But when he courses over words he wants to underscore, or if he senses his demagoguery isn't penetrating your thick skull, he slows down and annunciates each syllable, dragging out the consonants.

Why did you drop out of the race for governor? Phipps leans across the table in one of the flat white visiting rooms at Seagoville Federal Correctional Institution. "Because they kidnapped me and took me off the campaign trail," he says in a slow, loud drawl, pounding his finger into the table like a pile driver. "It's like I'm in a coma, waiting for someone to rescue me. I've been kidnapped by the government."

Phipps is tall and lean with a piercing glare rimmed in wire frames. The scythe-like lock of gray hair on his forehead adds to his intensity. He's a self-described evangelist, a crusader charged with saving the people from the ravishments of debt. "I hate debt with a purple passion," he says. "Debt, to me, is like drugs."

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