Suspect in Robbery Alleges Conspiracy Against Him : Crime: James A. McGrath’s 300-page tract asserts that banks and a chocolate maker have tried to destroy co-defendant Gilbert Michaels.

One of two men arrested on suspicion of a yearlong bank robbery spree left behind a bizarre document that provides insight into the thinking process of two men who apparently believed that they were being hounded by a Luciferian conspiracy bent on destroying them and, ultimately, the United States.

The 300-page document written by James A. McGrath, 48, also justifies bank robbery as a method of fighting back against the evil forces.

“What if Gilbert were to hold up the Wells Fargo Bank, not as a thief but an honest man?” asks the document, referring to Gilbert Michaels, 47, a co-defendant in the robbery spree. If Michaels held up the bank, he would be “an honest man reclaiming from crooks what is rightfully his.”

Part biography, part polemic, part religious tract, the rambling document tries to explain the life and travails of Gilbert Michaels and outlines the belief of the two men that a massive conspiracy involving banks and a jealous candy maker systematically worked to destroy Michaels’ fudge-making business.

“This case is the tip of that horrible black iceberg of corruption emerging into plain sight for everyone to see. . . . It is my sincere hope and prayer that this report will be used by the people for the exposure and removal of this plague of corruption from our great country,” the report says.

The neatly typed report does not describe any bank robberies or plot their execution. But authorities suspect Michaels and McGrath of carrying out a sophisticated, well-planned series of nine heists, including a $430,000 take in the largest bank robbery in Los Angeles history.

So far, charges have been filed in only one of those cases, the robbery 10 days ago of a Home Savings of America branch in Woodland Hills.

A man who identified himself as McGrath called The Times on Sunday and took credit for the robberies. “We’ve admitted to everything,” said the man, who said he was calling from jail.

The man said he is not bothered by his arrest. “I couldn’t be more happy” about the way things are turning out, he said. He said his and Michaels’ plan all along was to be arrested so that they could expose the conspiracy.

As for the possibility of spending years in prison, he said he is not worried about that. “The Lord has promised us we’ll get out.”

Michaels and McGrath were captured by the FBI minutes after the last robbery. A search of their luxurious, four-story rented house in West Hills turned up a cache of 119 guns, including a Thompson machine gun, and more than 25,000 rounds of ammunition. Under the house, agents discovered a military-style bunker complete with thick fire doors and a shooting range.

The FBI and family members said the two men were preparing for Armageddon by stockpiling weapons that they could share with other people who believe as they do.

Rose Ann Michaels, Gilbert Michaels’ wife, gave tours of the bunker last week and provided copies of the document, which lists McGrath as its author.

Besides detailing the alleged conspiracy against Michaels, the document includes a copy of a petition asking a judge to appoint a conservator for the estate of Michaels. The petition, filed in Los Angeles Superior Court by Michaels’ uncle, charges that he gave away part of his inheritance and spent money on drugs. Rose Ann Michaels denied those accusations.

The McGrath document was written in 1991, about the same time that the robberies began. It details McGrath’s investigation of the circumstances behind the alleged theft of Gilbert Michaels’ inheritance, which Rose Ann Michaels estimates is worth more than $1 million, and his growing suspicion that dark forces were focusing their energies on the family to prevent it from successfully marketing a candy product called Rose Ann’s Old Style Fudge.

The conspiracy McGrath felt that he had unearthed, which began with local banks and lawyers, eventually broadens to include the Hershey corporation, actress Jane Fonda and communists whose ultimate goal is the enslavement of ordinary Americans.

“Luciferian members intend to eliminate the middle class from America and turn the general population into peasants and slaves to do their bidding and be their torture-murder victims,” the document says.

Despite the seeming irrationality of those accusations, the FBI says the bank robberies did not betray delusional thinking.

“They did their homework,” Special Agent Charles Parsons said. “There was a lot of pre-planning. They hit the banks at the right time, they knew the personnel in the banks by name and they didn’t waste a lot of time yelling at people.”

Most robberies took less than a minute, he said. The robbers--usually there were just two, although police are still looking for two other men and one woman--wore disguises. They dressed as painters in one robbery and as postal workers in another. In the last two heists, they wore Army fatigues.

When they left the banks, they never ran and they always ditched their getaway vans, specially purchased for the purpose, a short distance away.

About the only mistake they made, Parsons said, was buying two vans under the same phony name. They had already drawn attention to themselves by the large amount of weapons that they were buying. When federal agents matched the license registration on one of the vans to an earlier bank holdup, they knew that they were on the track of the men they would call the “West Hills Bandits.”

The FBI kept the men under surveillance and was waiting for them the day they robbed the Home Savings branch.

Since the two men’s arrest, McGrath and Rose Ann Michaels have given interviews that are tantamount to admissions of guilt. And Thursday, McGrath addressed the court in his federal detention hearing and admitted all nine robberies.

McGrath told U. S. Magistrate Charles Eick that his reasons for committing some of the most sensational bank robberies in Los Angeles history were explained in the 300-page document, a copy of which had been given to the court the day before by Michaels’ wife.

Sitting at the dinner table in her house last week, Rose Ann Michaels thanked God for allowing her to get the document to the judge, as though it alone would explain everything and bring the evil forces to their knees.

The disjointed document seems unlikely to do that. But it does portray a family that felt itself hemmed in on all sides by persecutors, with only God as their solace.

Michaels is the son of a business pioneer named William (Bud) Semco, a nationally recognized expert in materials handling who advised companies how to design their plants to increase efficiency.

McGrath describes himself as a close friend of Gilbert Michaels since childhood. He says he spent many afternoons swimming laps at the Semco house in North Hollywood. McGrath later swam on the USC varsity team.

The relationship that evolves between the two men, as described in the document, is one of a spiritual guide, Michaels, and his chronicler, McGrath. McGrath describes Gilbert as a “saint of the highest order” who heads a “specially anointed family consecrated unto the Lord.”

In the phone call to The Times, the man who identified himself as McGrath said both men are prophets. Told many people may believe instead that they are deluded, he replied: “I know that. The Lord says he’ll prove it to the jury.”

It was McGrath who, when the family began to suspect that outside forces were arrayed against it, conducted an investigation that even included a visit to Hershey headquarters in Pennsylvania. There, McGrath said he found more evil, although he provides no specifics.

Rose Ann Michaels is Gilbert Michaels’ second wife. His first wife died of cancer, leaving him with two sons, Isaiah, 15, and Jeremiah, 13. Rose Ann Michaels worked as a waitress at the International House of Pancakes to make ends meet until 1984, when she was fired--which the family sees as part of the plot against it.

That led family members to put all their energy into selling Rose Ann’s Old Style Fudge. They began with a recipe off a box but continued to improve it until they decided that it was good enough to sell.

They took their product into parking lots, malls and beauty parlors around the San Fernando Valley. Several beauty parlor operators recalled seeing the woman or one of the men coming in and selling their fudge out of coolers at $7 a pound.

“It was some of the best fudge we ever had,” the former owner of a Woodland Hills beauty parlor said.

The business grew. At one point, the family worked around the clock, cutting and packaging the fudge between 4 and 7 a.m.

But the McGrath document says the business never took off the way it should have and some beauty parlors began preventing family members from coming in. The family suspected a conspiracy at work.

“Mr. Michaels has developed an outstanding product, Rose Ann’s Old Style Fudge, which is a competitive threat to Hershey chocolate’s dominance of the chocolate bar industry,” the document says. It says Hershey “provided a considerable amount of payoff money to assist in the theft of Mr. Michaels’ inheritance.”

Michaels planned to use the inheritance left him by his parents, William and Anna Semco, to build a factory that would allow Rose Ann’s fudge to compete more equitably with Hershey. But there was trouble with the inheritance, at least as far as they were concerned.

There was no question that the estate was sizable. After William Semco’s death on Jan. 18, 1987, an estate tax form included in the McGrath document listed the gross worth of the estate as $1,589,186.

A co-trustee of the estate, Los Angeles lawyer Christopher Ashworth, said it includes a Texas shopping center and nine Valley condominiums.

Another trustee, Edmund Futterman, Gilbert Michaels’ uncle, states in the conservatorship papers filed with Superior Court on Jan. 24, 1989, that he began in late 1988 to distribute Gilbert Michaels’ share of the estate, which he said was about $225,000.

Futterman said he gave Michaels $90,000 but within 90 days it was gone. Futterman told the court that in a meeting, “the proposed conservatee indicated that all of the money was given away in cash to friends and strangers, used to purchase drugs and used to pay the debts of the people he lives with.”

Futterman asked that a conservator be appointed to oversee distribution of the rest of the money.

Rose Ann Michaels said that was never done. She also denied that her husband ever used drugs.

Another problem occurred when, just before her death a year after her husband, Anna Semco changed her will to give what would have been Gilbert Michaels’ share of her estate to Michaels’ two sons, Isaiah and Jeremiah.

To the Michaels group, the trouble with the estates was proof of the conspiracy.

When asked whether the troubles with the fudge business and other difficulties the family has confronted might have been just bad luck, Rose Ann Michaels demurred. “Not year after year, from the beginning of childhood,” she said. “You can chalk things up to accidents, but accidents don’t just happen.”

Again and again, the McGrath document refers to the satanic forces at work. It also returns again and again to his belief that large banks such as Wells Fargo, where portions of the estate were being held in trust, were part of the conspiracy to cheat Gilbert Michaels out of his inheritance.

In an eerie prelude to real events, the document proposes the following scenario on page 178: “Someone might say, if this happened to me the first thing I would do is hold up the Wells Fargo Bank.”

On page 86, the document states that “embezzlement is a far worse crime than armed robbery.”

Elsewhere, the four-inch-thick document says robbing a bank is “not the will of the Lord.” But it also says “we must remember that it is our constitutional right to rise up in these matters, bearing arms if necessary.”