January 13, 1997 in Nation/World

Freemen Standoff Spurs Investigations Twenty-Three States Probing People With Ties To The Group

Thomas G. Watts Dallas Morning News
 

The freemen of Montana have unwittingly helped prosecutors across the nation target anti-government lawbreakers.

Authorities in at least 23 states have charged or are investigating people with ties to the freemen - who surrendered last June after an 81-day standoff with the FBI for conspiracy and fraud.

The Dallas Morning News identified 65 criminal cases or investigations involving 151 people with freemen ties in those 23 states through government records, reports by monitoring agencies, and other sources.

The cases examined by The Morning News involved phony financial instruments that could have totaled $2.17 billion if they had been used successfully. Most were not.

U.S. Justice Department spokesman John Russell said the agency’s fraud section is aware of 18 investigations throughout the United States. In addition, he said, there may be probes by other federal agencies and state agencies.

Federal prosecutors, who are handling most of the cases, declined to discuss details of what evidence they have gathered.

Freemen prosecutors in Montana, however, have readily shared the information with other law enforcement agencies around the country.

“There is evidence that has been developed in our case that has been made available to other jurisdictions,” said Sherry Matteucci, the Montana U.S. attorney who is prosecuting the freemen.

“We have, of course, a system of coordination between U.S. attorneys and other law enforcement agencies … and regularly share information,” she added.

In some cases, the freemen ties were discovered during investigations that were already under way.

Freemen leader LeRoy M. Schweitzer, who taught the classes, said he believed that the money orders he could spin out of a home computer and laser printer were as legitimate as those purchased at a bank. He claimed the banking system was illegal and not supported by real money since the nation went off the gold standard in 1933. He also asserted that the Federal Reserve system was unconstitutional.

That philosophy is shared by many in the anti-government or Patriot movement - particularly tax protesters.

Some money orders that were printed in the freemen mold were used to pay federal, state and local taxes. Others were passed to businesses and individuals to pay bills and cover purchases.

Some of the liens were filed against property owned by public officials or private companies.

One of those who reportedly attended a freemen class was former Waxahachie developer F.R. “Johnny” Johnston.

He was sentenced by a Dallas federal judge last year to eight years in prison for his role in distributing $61 million in phony money orders. Five other men from Texas, Pennsylvania and Kansas also received jail terms in that case.

Johnston also was indicted by federal grand juries in Austin, Texas, and Milwaukee for similar scams.

In Austin, he and six other men are charged with attempting to use phony money orders to defraud the IRS.

He was dropped from the Milwaukee case recently because of questions of double jeopardy. Eight other people, however, were convicted of distributing $64 million in bogus money orders in exchange for donations of $100 to $500 to the Family Farm Preservation of Tigerton, Wis., federal prosecutors said. State and federal officials are looking at another potential Texas case.

A spokesman for state Attorney General Dan Morales said the agency is looking at a transaction by leaders of the Republic of Texas movement last fall.

Republic officers contracted with an Austin jeweler to create silver badges for their “rangers.” As final payment, they sent the jeweler a “warrant” for $3,946. Banks have refused to accept the “warrant.”

Russell of the Justice Department said one of the most notorious freemen students was M. Elizabeth Broderick of Los Angeles, who reportedly attended a Schweitzer class in October, 1995.

Back in California, she dubbed herself the “lien queen” and started her own series of classes. By the time she was arrested last summer, federal authorities said, she was making about $300,000 a month from running the classes. And she claimed to have amassed $180 million through the liens and money orders and had another $800 million of the instruments ready to sell to her students and others.

Some of those money orders were co-signed by Schweitzer - who also signed similar financial instruments that are being investigated in other parts of the country.

Broderick was convicted of 26 counts of conspiracy and fraud in October and faces about 20 years in prison.

Since arrested last year, most have refused to work with their court-appointed attorneys and have disrupted pre-trial hearings.

They also have refused to allow themselves to be fingerprinted - though the judge recently approved a request that federal marshals be allowed to use “reasonable force” to obtain the prints.

“I’m still trying to figure out what reasonable force is,” Matteucci said. “But we will get the fingerprints.”

Joe Roy, the head of the Southern Poverty Law Center’s Klanwatch unit that monitors extremist groups, said prosecutors are right to target the freemen disciples.

“The big thing is that a lot of these guys are potentially dangerous,” Roy said. “They are at war with the United States and the government is starting to take them seriously.

The associate director of the Anti-Defamation League’s Washington office, Michael Lieberman, urged the Justice Department to establish a task force to concentrate on freemen activities - similar to one set up in the 1980s to target the then-growing skinhead movement.

“It’s certainly an effective deterrent,” Lieberman said.

Russell of the Justice Department agreed that the threat of freemen and their fake financial instruments was real.

“There is a Freemen tentacle throughout the country,” he said.

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