I googled to find something quickly. Here is some info:
"the Ninth Circuit Court put that issue to rest in 1982 when they adjudicated:
"Examining the organization and function of the Federal Reserve Banks, and applying the relevant factors, we conclude that the Reserve Banks are not federal instrumentalities for purposes of the FTCA, but are independent, privately-owned and locally controlled corporations." [Lewis vs. U.S., 680 F. 2d 1239, 1241]
"We have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks. Some people think the Federal Reserve Banks are U.S. government institutions. They are not government institutions. They are private credit monopolies; domestic swindlers, rich and predatory money lenders which prey upon the people of the united States for the benefit of themselves and their foreign customers. The Federal Reserve Banks are the agents of the foreign central banks. The truth is the Federal Reserve Board has usurped the Government of the United States by the arrogant credit monopoly which operates the Federal Reserve Board." [Congressman Louis T. McFadden, Chairman of the House Banking & Currency Committee, speech on the floor of the House of Representatives, June 10, 1932]
"In the united States we have, in effect, two governments....We have the duly constituted Government....Then we have an independent, uncontrolled and uncoordinated government in the Federal Reserve System, operating the money powers which are reserved to Congress by the Constitution." [Congressman Wright Patman, Chairman of the House Banking & Currency Committee, speech on the House floor, 1967]
HOW DID ALL OF THIS GET STARTED?
Briefly, the Federal Reserve system was created by international banking families such as the Rothschilds, Warburgs and Rockefellers. This international banking cartel creates "money" out of thin air. It only costs them a few cents to print each Federal Reserve Note "dollar bill", and then they "bill" the American people for the full face value of the note. Then to add insult to injury, they charge us interest to borrow their so-called "money". If you or I did this, we would be arrested for counterfeiting and fraud. This system was instituted gradually, starting with the Civil War and culminating with the fraudulent passage of the Federal Reserve Act in 1913."
Info from
http://www.healthfreedom.info/Federal_Reserve_Fraud.htm
That page seems to say some great stuff. You seem to want the nuts n bolts info so I hope this helped. The Fed makes a ton of money in the banking system by creating money out of thin air, charing interest, then using the IRS to confiscate peoples money via taxes to pay down the "debt".