LaRouche Groups' Bank Assets Frozen in Fraud Scheme

Times Staff Writers

Bank accounts of two Lyndon H. LaRouche-affiliated groups backing Proposition 64, the AIDS initiative, were ordered frozen by a federal judge after a lawsuit charged LaRouche and his extremist followers with a scheme to defraud elderly people of more than $2 million, it was disclosed Saturday.

U.S. District Judge Thelton E. Henderson issued a sealed order in San Francisco on Oct. 10 after an 83-year-old widow claimed that elderly people in 10 states had become victims of "high-pressure tactics and manipulative devices to extract loans the defendants have no intention to repay."

The suit was unsealed late Friday. Attorney Dan Bookin, who filed the suit on behalf of Margaret M. P. Beynen of Berkeley, announced the action Saturday.

The new charges are not related to a 117-count indictment returned on Oct. 6 by a federal grand jury in Boston against the LaRouche organization. Five LaRouche organizations and 10 of his associates were indicted on charges of wire fraud, obstruction of justice and contempt of court in connection with a nationwide credit card theft conspiracy. LaRouche was not named.

Hard-Sell Tactics

But court records and testimony filed in support of the indictments allege that LaRouche heads an empire of companies and committees that uses hard-sell tactics on potential donors, including promises of repayments that are never made.

Beynen's lawsuit was brought under the Federal Racketeer Influenced and Corrupt Organizations Act. It cites a "pattern of racketeering activity" that has repeatedly targeted the elderly, using mail fraud and wire fraud.

LaRouche and three groups under indictment in Boston were named in the San Francisco suit, which seeks a $64,000 repayment to Beynen and $5 million in punitive damages. The groups--Caucus Distributors Inc., Campaigner Publications Inc. and the Fusion Energy Foundation--have been named in other recent suits alleging that contributors were defrauded, including some who are elderly.

The San Francisco suit also names the Prevent AIDS Now Initiative Committee (PANIC), the campaign committee established by veteran LaRouche aides in California to qualify the AIDS initiative for the Nov. 4 ballot and promote its passage.

Two officers of PANIC, Khushro Ghandhi and Theodore J. Andromidas, were named in the suit. J. Philip Rubinstein, the president of Caucus Distributors, and Michael Billington, a LaRouche organizer in Virginia who was indicted by the Boston grand jury, were also included in the lawsuit.

Only One Account Frozen

A writ of attachment freezing the bank accounts was issued against both Caucus Distributors and PANIC after Bookin argued that the Proposition 64 committee received most of its money from Caucus Distributors. However, Bookin said the freeze order was carried out only against PANIC's Glendale bank account. "This is the only one we were able to locate in California at this time," Bookin said.

PANIC has reported raising about $250,000, most of it spent to qualify Proposition 64, which seeks to compel health authorities to keep records on people infected with AIDS antibodies and to remove them from certain jobs.

According to the suit, Beynen--whose only family is a blind, diabetic son--was induced by multiple phone calls in late 1985 and early 1986 to make four loans to LaRouche organizations. Beynen claims she was told that her money would be used to fight international drug trafficking and that she would be paid 10% interest. All four loans are now past due.

Beynen said Saturday that she believes that LaRouche aides got her name and phone number from lists of contributors to various charities. At first, she said, it sounded like a patriotic organization.

"A woman with a lovely voice called me from their headquarters in Leesburg, Va.," Beynen said. The calls then became more rude and insistent, she added.

"They (the calls) became a great nuisance," she said.

The tactics are identical to those described in court documents and testimony around the country this year. Telephone calls begin by saying that loans are needed to stop AIDS or fight drugs, then the calls become more frequent and demanding. An undercover Virgina state police agent said recently that he received more than 20 calls in a week after posing as a potential LaRouche donor.

'Campaign to Defraud'

The lawsuit, filed pro bono (in the public interest) by the San Francisco law firm of Farella, Braun & Martel, charges a "systematic, nationwide campaign to defraud the public through a loan solicitation scheme" that targets the elderly, often pressuring them to surrender their life savings.

Typically, elderly people are told that their money is safer with LaRouche than in commercial banks and are promised regular interest payments, according to the lawsuit. As soon as a person agrees to make a loan, "the defendants insist on the use of overnight couriers or wire transfers to avoid any delay in the remittance of funds that might give concerned relatives or advisers a chance to intervene," the lawsuit says.

The cases of 19 individuals in 11 states are detailed, including that of Grace M. Lindros, 71, of Los Angeles, who lost more than $135,000 or "substantially all her life savings."

In an unrelated lawsuit, Lindros sued LaRouche's Fusion Energy Foundation and won a judgment earlier this year, but she still has not received her money.

Loaned $30,950

Other elderly Californians cited as examples in Beynen's lawsuit include a widow, Ordel Bradley, 76, who lives on Social Security in a Modesto trailer park. Initially, Bradley loaned $950 to a LaRouche affiliate in May of 1984. During the next two weeks, the lawsuit claims, she was continually solicited for loans, receiving two to three phone calls a day and finally loaning an additional $30,000, none of which has been repaid.

Unrelated to this suit, a bank in Florida filed a lawsuit earlier this year on behalf of 80-year-old Charles H. Zimmerman, a retired steel executive who gave or loaned $2.6 million to the Fusion Energy Foundation and other LaRouche organizations. The suit alleges that Zimmerman was pressured into turning over the money.

Also this year, First Fidelity Bank of New Jersey sued several LaRouche organizations under the federal Racketeer Influenced and Corrupt Organizations Act. That suit stemmed from allegations of credit card fraud against LaRouche groups that had carried some accounts with the bank.

Brian Lantz, vice president of PANIC, said Saturday the newly filed suit was a "political dirty trick" orchestrated by Assistant U.S. Atty. Gen. William Weld in Washington and California Atty. Gen. John Van de Kamp.

'Temporarily Stolen'

"The account has been temporarily stolen but we'll get it back," said Lantz, who denied that PANIC is responsible to Caucus Distributors. "We can't be defeated because we won't stop fighting."

Weld is the Justice Department official who instigated the federal investigation of LaRouche's activities in Boston. He has been a frequent target of attacks published by LaRouche newspapers and magazines, and an FBI agent testified recently that an informant quoted LaRouche as saying that Weld "should get a bullet between the eyes."

Van de Kamp's office has cooperated with the federal investigation and is looking into allegations of election fraud by PANIC in qualifying Proposition 64 for the ballot.

Last week, a PANIC spokesman blamed Van de Kamp for disconnecting the group's Los Angeles telephones--which are in the name of Caucus Distributors. But a Pacific Bell spokeswoman said the phones were cut off because $5,000 in checks bounced.

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