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LaRouche, 6 Aides Indicted in Mail Fraud : Charges Cite Conspiracy to Deceive Creditors on Paying Off Loans

Times Staff Writer

A federal grand jury on Friday returned new criminal charges against political maverick Lyndon H. LaRouche Jr. and six associates, alleging that they conspired to commit mail fraud by lying to creditors about how his organization would repay $30 million in loans.

In a continuation of LaRouche’s legal troubles over the last two years, the grand jury in Alexandria, Va., also accused LaRouche in the 13-count indictment of conspiring to defraud the Internal Revenue Service by concealing money spent on his behalf.

LaRouche, if convicted on the charges, would face a maximum penalty of 65 years in prison and fines totaling $3.2 million.

Face Additional Charges

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LaRouche, a four-time presidential candidate, and some of his aides already are facing trial in Boston in December on conspiracy charges similar to the allegations brought Friday. The defendants in the Boston case are charged with conspiring to obstruct an earlier federal grand jury investigation into allegations that his 1984 campaign raised money through credit card fraud. Four of his organizations also face fraud charges.

The December trial was set after a previous six-month trial there ended in a mistrial in May when four jurors sought to be excused from the long and complex case.

The prosecution of LaRouche and his associates in Boston cited about $1 million in allegedly fraudulent credit card disbursements used for his presidential race. But documents filed in U.S. Bankruptcy Court in Alexandria show that this amount represented only a fraction of the funds raised by LaRouche, officials say.

The documents suggest that before federal and state agents confiscated 16 truckloads of records from LaRouche’s headquarters in Leesburg, Va., in October, 1986, creditors were becoming agitated over the failure of his organizations to repay millions of dollars in loans. Many threatened legal action, and state securities agencies across the country were beginning to enjoin LaRouche’s agents from soliciting additional funds.

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Restraining Order Denied

LaRouche spokesmen have described the bankruptcy case as part of a series of efforts by the government to ruin LaRouche’s publishing enterprises and his political aspirations. They renewed the same arguments Friday in asking U.S. District Judge Stanley Sporkin to delay the latest indictment until after the Nov. 8 presidential election. But Sporkin denied their request for a temporary restraining order.

U.S. Atty. Henry E. Hudson disputed claims by the LaRouche organization that the indictment was politically motivated, saying that LaRouche “is being treated just as any other citizen would be who is charged with committing a crime.”

On the tax charges, the grand jury said that LaRouche had not filed a federal income tax return since 1979 and had conspired to hide sums of money spent on his behalf by arranging for living expenses to be paid out of corporate accounts associated with his principal organization, the National Caucus of Labor Committees.

Paying of Expenses Cited

Hudson said that LaRouche “conspired with others to have all his expenses--including lodging, clothing, food, gifts and travel--paid on his behalf out of the funds of various corporations he controls, rather than receiving a salary or other form of compensation.”

Between late 1983 and early 1987, publishing concerns controlled by LaRouche borrowed more than $30 million, often through telephone solicitations in which lenders were allegedly promised specific dates for repayment, the indictment said.

Records of the Federal Election Commission contain letters and sworn statements from hundreds of political donors complaining that they were tricked into extending “loans” to LaRouche that never were repaid. Some said LaRouche operatives improperly obtained their credit card numbers and used them to get money.

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