A federal grand jury on Thursday indicted five Maui residents on fraud and tax charges, alleging they falsely told people they could eliminate debts by zeroing them out with "special reserves" at the U.S. Treasury.

The indictment charges Mahealani Ventura-Oliver, John D. Oliver, Pilialoha K. Teves, Leatrice Lehua Hoy, and Peter Hoy with conspiracy and 16 mail fraud offenses dating from 2008 to 2010.

Ventura-Oliver and Oliver are also charged with one count of money laundering, based on their alleged usage of funds obtained from participants to pay off credit card debt. The indictment also charges Ventura-Oliver and Oliver with conspiring to submit false tax returns to the Internal Revenue Service and seeking tax refunds based on false information on IRS forms.

Attorneys for the five could not immediately be reached. An e-mail seeking comment sent to Ko Hawaii Pae Aina — an organization to which the defendants belonged — was not immediately returned.

The group’s website claims Ko Hawaii Pae Aina has sovereignty over Hawaii and the state of Hawaii is illegitimate.

Federal prosecutors allege the defendants told people participants in their scheme that all individuals have "special reserves" with the Treasury that could be used to "zero out" their private debts.

The defendants then allegedly prepared fictitious bonds, promissory notes and money orders which they falsely claimed were backed by the Treasury and state of Hawaii, and which became effective if individuals sent them via U.S. mail to the Treasury, the Federal Reserve Bank, the state of Hawaii and their creditors.

The indictment alleges the defendants then told participants to stop paying their mortgages, property taxes and other debts, and falsely promised that the fictitious obligations would eliminate their debts and forestall mortgage foreclosure proceedings.

The defendants collected about $468,000 in fees from those who participated in the debt assistance program, prosecutors said.