Easy Money . . . Hard Reality

From Port Hueneme to Alabama, they came by the hundreds for M. Elizabeth Broderick’s homemade checks, the ones that the fiery tax resister tells her audiences are good to pay any debt.

What they got for their $125 and $200 registration fees, federal officials say, are pieces of paper whose only value lies in the minds of Broderick and other members of the so-called Patriot movement, whose anti-government beliefs have prompted them to form their own courts and treasuries.

But politics seems to play no role for most of Broderick’s customers, who set aside their disbelief to chip away at their debt.

“We are poor and we have to believe in Santa Claus,” said Rosalia Gallardo, a janitor from Baldwin Park who was dismayed to hear federal officials say during a court hearing last week that Broderick, 52, may be committing bank and mail fraud.

More than $30 million worth of Broderick’s checks have been used since November, but almost no banks will accept them, according to federal officials. But Broderick, who says the U.S. government is illegitimate, claims her checks are better than cash.

Word of Broderick’s two-day seminars, which continue to be held every other week at the Essex House hotel in Lancaster despite federal scrutiny, has spread nationwide. Neighbors have recommended the classes to each other; family members on opposite coasts have traded information over late-night, long-distance phone calls.

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Now, some are pleading with auto dealerships not to repossess their cars and are contemplating ending their retirements to pay bills they thought were covered. A federal judge has barred Broderick from issuing any more checks for the time being, but for some, it’s too late.

“She can do the same damage as a drive-by shooter to someone who doesn’t really know the system well,” said John Ramirez, a Huntington Beach business consultant who waged a successful three-year civil suit against Broderick over her previous enterprise, the California Gold Co. Authorities say that company remains under investigation as a possible pyramid scheme.

Presenting herself as a virtual bank with hefty reserves, Broderick maintains that the checks are backed by multimillion-dollar lawsuits and liens she has filed against government agencies and officials, among other enemies. She says her largely working-class followers flock to her seminars for good reason: They labor under a government that she says has declared war on its citizenry, shackling them to an oppressive monetary system.

“People come in droves. They come in carloads,” Broderick said in a recent interview. “People want debt relief. People know something’s terribly wrong. Their homes are being foreclosed, they’re losing their jobs.”

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Some of Broderick’s pupils say they’re glad they came, that they learned a new version of American history at her seminars and have had no trouble using her checks. “I do think that our rights are being a little bit compromised,” said a 54-year-old woman who flew from Washington, D.C., for a recent seminar. She declined to give her name.

But others say they feel burned.

“Everybody’s upset,” said a 67-year-old El Monte man who asked not to be named. The man, a veteran of five of Broderick’s classes, said he will have to resume work as a telemarketer to pay his bills. “We want our money back.”

He and others may have to get in line.

In Colorado, Broderick was convicted of a misdemeanor in 1987 for running a pyramid scheme, authorities there said. Investors paid a $1,400 entry fee and were promised profits if they brought in four new investors, said investigator Donna Gordanire, who still recalls one elderly victim.

The man had so much faith in Broderick after recouping his initial investment that he reinvested the remainder after income taxes, said Gordanire, who investigated the case for the Jefferson County district attorney’s office.

Soon afterward, however, Broderick was charged with running an illegal business and the man never saw his money again. “She’s just a good con. . . . If she would put this much energy into legitimate business, she would be very successful,” Gordanire said.

Court documents in Orange County show that three residents there, including Huntington Beach consultant Ramirez, each won $5,000 lawsuits against another Broderick enterprise that folded during a state inquiry.

The California Gold Co., which was based in Santa Ana, promised to double investors’ money monthly by purchasing gold coins at discounted rates on the world market. But an affidavit filed by state investigators says that California Gold was a classic pyramid scheme, deriving its profits from new investors, not gold. It owed as much as $1 million to investors when it was raided in May 1993, according to the affidavit.

Nine investors sued Broderick, who says she’s a paralegal, although all but three dropped their claims rather than fight her countersuits. “I didn’t want to waste my time,” said one Orange County investor, who said she lost $1,500. “She . . . knows her way around the courts.”

Ramirez, himself a paralegal, said he stayed in the fight to teach Broderick a lesson. Still, he has yet to see a penny of the money he won in Orange County Small Claims Court because Broderick’s California Gold assets remain frozen as the state attorney general’s office continues its investigation.

In Colorado and Orange County, according to investigators, court records and Broderick herself, she filed lawsuits and liens against those who challenged her business dealings.

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Today, it is those claims that allegedly bankroll her checks or “comptroller’s warrants,” which bear the words “Payable on Sight” and may be ordered after attending one of her Essex House seminars. The hotel’s management says it simply rents space to Broderick and does not endorse her teachings.

Some participants at her last two-day seminar, which began Easter Sunday and drew people from as far as North Carolina, said they couldn’t care less about becoming “sovereign citizens.” Maria Gonzalez, a 36-year-old cosmetology student from Port Hueneme who drove to Lancaster hoping to find help with her mortgage payments, found the dense political lecture baffling.

“I don’t know,” she said, shaking her head and sighing. “We can dream, can’t we?”

Speakers began the seminar by guiding the audience through an unorthodox version of American history: Congress has been illegal since Abraham Lincoln declared war on the South. The government has placed citizens under martial law. The Federal Reserve is bankrupt.

“How many of you feel like you live in a free country?” said a man sporting an American flag necktie and calling himself Johnny Liberty. “How many of you feel like you’re master of our government agencies? Do you feel like you’re master of the DMV? The master of the IRS?”

Outside, vendors peddled books with titles such as “Allodial Land Patents” and “Concentration Camps in the USA for US Citizens” for $30 each.

“This is one of the best books,” said one vendor, holding up a comb-bound volume to a prospective customer. “They’re using that in some universities. Oh, excuse me,” he said as a cellular phone rang under his sport jacket.

Broderick did not appear at the Easter class and, honoring a judge’s order, did not distribute the forms for one of her checks that are included in the seminar’s fee. Additional checks cost $100 each, as does the computer program used to write them, according to fliers passed out at previous seminars.

In them, Broderick also recommends the $15 tapes of Montana tax resister and self-declared “freeman” LeRoy Schweitzer, with whom she studied. Schweitzer is himself the subject of a federal investigation for check fraud.

Pointing to the ethnic diversity of Broderick’s staff and the many black and brown faces at the Easter seminar, speakers said the Patriot movement has been unjustly smeared with charges of white supremacy. Broderick, an immigrant from Canada who believes she has been repeatedly persecuted by law enforcement, said she sympathizes most with immigrants and minorities.

“They go against the immigrants, against the poor people,” Broderick said in an interview, referring to police and prosecutors.

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Advocacy groups say that even if their limited English makes some of Broderick’s clients particularly vulnerable, it is economics, not race or ethnicity, that appears to be the strongest factor drawing people to her seminars.

“In tough times, every community tends to be more susceptible to these kinds of frauds,” said Thomas A. Saenz, regional counsel for the Mexican American Legal Defense and Education Fund. “Desperate people act desperately, regardless of race [or] immigration status.”

Esperanza Cardenas was desperate. A Baldwin Park mother of three and a clothing saleswoman, she heard of Broderick’s seminars through a friend, and hurried to Lancaster last winter. She told her friends and family about the classes, introducing them to Broderick’s checks and using seven to stem her own flood of bills.

The last check issued by Broderick, Cardenas said, was for $17,000, and she used it to pay for a Toyota Tercel. But last week the auto dealer, with FBI agents in tow, repossessed the car.

Cardenas attended a federal court hearing last week anxious for information and help in getting her car back.

Gallardo, one of Cardenas’ friends, said they both were hampered by language difficulties and didn’t fully understand the paperwork Broderick distributed. Gallardo never received her check, but sympathizes with Cardenas and others who she believes were bilked.

“It’s not fair what she’s doing with all the people,” Gallardo said. “She made us dream very beautifully.”