Montana Freemen Trial May Mark End of an Era

Montana Freemen trial may mark end of an era

Wire Fraud and Computers
The whites-only republic won't be the issue before the court in May, however. Old-fashioned wire fraud will be.

Schweitzer, Dale M. Jacobi, Rodney O. Skurdal, Daniel E. Petersen and 10 others are charged with "a scheme to generate hundreds of fraudulent and worthless documents," including many purporting to be financial instruments.

Further, Schweitzer and his confederates allegedly conspired to persuade others to use the instruments "to defraud federally insured financial institutions" and engaged in the interstate transfer of stolen goods. They are accused of then combining forces to avoid arrest.

Simply put, the Freeman sat down at their computers and created their own financial instruments. At weekend workshops, they distributed the documents to hundreds of would-be Freemen from across the country, who then used the checks to buy trucks and other goods and pay off bank loans or taxes. Often, the phony checks were written for twice the amount owed.

The IRS and others actually accepted some of the checks and paid back the "overage" in real dollars, in one case sending a check for $14,000 to a California woman who owed $8,000 in back taxes. The indictment also charges the Freemen with attempting to use more than $1 million in phony checks to buys guns and ammunition from a Montana arms dealer.

In another instance, they allegedly tried to buy six trucks in Wyoming. Both the weapons and truck deals fell through.

According to the indictment, Schweitzer took the first steps in the conspiracy in March 1990, when he filed a civil action against the state of Montana and convinced a judge to open a $100 account at Norwest Bank to receive any possible judgments in his favor. Although the account was closed in 1994, he used paperwork from the account throughout the scam.

In the critical next step, Schweitzer and the Freemen convened so-called common-law courts and issued "criminal" charges against individuals and government agencies. Garfield County Attorney Nick Murnion, for instance, was charged with "treason" and threatened with death.

When Schweitzer's targets didn't respond to the specious charges, he would issue financial "judgments" against them for fantastic sums. Then false commercial liens would be filed at the county courthouse to supposedly satisfy these judgments. Schweitzer also created a thicket of paper "transferring" the fictional value of the liens to the Norwest Bank account.

Then, in the scam's coup de grace, a computer-generated "certified banker's check" or some other fake instrument was written on the nonexistent funds. The fake financial instrument would then be used to try to pay real debts or buy goods.

Taking the Bait
Relatively early in this process, county clerks stopped accepting these bogus liens, and judges issued court orders against them. In those instances where the liens were successfully filed, the Freemen's targets had to take expensive legal action to have clear title to their property restored (see Common-Law Victims).

If the county clerk didn't accept the lien or the government agency refused to accept the paper, they, too, could be hit with a Freemen lien or a "summons" to the common-law court. The intention, according to Toole, was to "intimidate any opposition" to white supremacist activity in the region.

The main target of the funny money scheme, however, was the Federal Reserve banking system, which "Patriots" and white supremacists of every stripe claim is unconstitutional or even satanic.

The Freemen created their own particular blend of right-wing ideology by blending broad-based anti-Fed activism, Posse-derived common-law philosophy and the theology of Christian Identity, an anti-Semitic and racist belief system that has animated segments of the radical right for decades.

In so doing, they found a constituency for their scam that was willing to openly defy the authorities and defraud the unsuspecting at the same time.

Schweitzer and his Freemen followed directly behind another organized swindle run by an organization calling itself We the People. Roy Schwasinger's We the People roiled through farming communities in 1992 and 1993 with a scam pitched directly at financially distressed farmers.

Schwasinger, a Nebraskan who also operated out of Colorado, told his followers that he had successfully sued the Federal Reserve. He claimed to have struck a secret deal with the government to settle the lawsuit that would result in billions of dollars in damages being paid.

For a $300 fee, Schwasinger claimed, farmers could join the lawsuit and receive their portion of the dollars that would soon be distributed.

Over 2,000 people took the bait. Eventually, We the People operatives were indicted in Iowa, Texas and Colorado — leading the anti-Semitic Liberty Lobby's Spotlight tabloid to conclude that Schwasinger was a protester silenced for "objecting to heavy-handed government land grabs."

A History of Scams
Like the Montana Freemen, Schwasinger filed cartons of common-law court documents, liens and fake arrest warrants before he was finally indicted and sent to jail. The link between the two fraud conspiracies is also direct and personal. Schwasinger's operatives included Russell Landers, We the People's emissary to the Southeast, and his wife, Dana Dudley.

The couple, after being indicted with Schwasinger in Colorado, went on to hole up with the Freemen during the Jordan siege. Now, they will go to trial in Billings with the Freemen leaders. In addition, Schweitzer, the Freemen leader, reportedly met personally with Schwasinger in 1992.

Schwasinger's scam, in turn, echoed a similar ideologically tinged fraud perpetrated on farmers in the early 1980s by a Coloradan, Rick Elliott. Elliott told farmers that for a $300 fee they would be eligible for millions of dollars in interest-free loans provided by secret Arab donors.

Before going to jail, Elliott's Primrose and Cattlemen's Gazette routinely published anti-Semitic screeds and advertisements for the neo-Nazi Aryan Nations. Among Elliott's core group of sponsors was Eugene Schroder, who in later years would become a major player in the common-law movement.

What most differentiated Schweitzer from these earlier anti-Fed scams was the central role that white nationalism played for the Freemen. Schweitzer's Freemen argued that the unalienable rights of the Constitution belonged to "we the people," the population mentioned in its Preamble. This specifically excluded "the colored races and Jews."

Indeed, "we the people" translated for the Freemen as "the White race, Adamite People and Israel." Here the word Israel was Identity-speak for whites descended from northern Europeans — the only ones privileged by God to write phony bank drafts.