Use of ‘Freemen’-Style Checks Probed in Ventura County

Lacing their words with anti-government rhetoric from the militia movement, they try to pass bogus checks to pay off big bills, stock their bank accounts with piles of cash or post bail to get out of jail.

More than a dozen residents of Ventura County are under investigation on suspicion of attempting to negotiate millions of dollars in fraudulent checks that were designed by the Montana-based “freeman” anti-tax group or other militia-style organizations.

When confronted by the law, they have threatened investigators and slapped liens or lawsuits on judges assigned to hear their cases.

“They’ve threatened me already,” said Sheriff’s Department Det. Bill Stovall, a major-fraud investigator looking into several cases. “They have given me 10 days to apologize. And if I don’t, they say they are going to make life miserable for me and my wife.”

The Ventura County Grand Jury recently indicted a Thousand Oaks man on charges of buying six assault rifles c.o.d. with what the indictment calls fake money orders. He remains in jail on grand theft and counterfeiting charges.

Meanwhile, the bogus checks keep popping up at banks, government agencies and local shops--attracting the attention of district attorney’s investigators, the Secret Service, FBI and other police agencies.

A local woman used a fraudulent check to post $2,500 bail and pay court fines, investigators say. An Oxnard man tried to pay his property taxes with a bogus check, making it out for double the amount owed and requesting a cash rebate. Others have tried to pay hospital bills or pay off their mortgages.

“This is just the scam du jour, capitalizing on the anti-government, anti-tax attitude in this country,” said Ventura County Dist. Atty. Michael D. Bradbury. “They’ve got some incredulous story that this is backed by liens. But, of course, it is a fraudulent scheme.”

Bradbury warns merchants to scrutinize each check before accepting it. “If it looks a little out of the ordinary, they shouldn’t accept it,” he said.

Many of these checks circulating in Ventura County have been inspired by seminars in Lancaster conducted by Elizabeth Broderick, a pupil of “freeman” anti-tax protester LeRoy M. Schweitzer.

Schweitzer’s arrest on federal bank fraud charges prompted his armed followers to hole up on a ranch in Montana, where they have been surrounded by federal agents in a monthlong standoff.

Broderick continued Schweitzer’s method of pushing “comptroller warrants” as checks backed by liens against the government--until ordered to stop by a federal judge.

Some people have purchased at her seminars computer software that allows them to print their own endless supply of bogus checks, investigators said.

Broderick was arrested Thursday on a 30-count indictment and ordered held without bail because authorities believed that she was about to flee the country.

A day before her arrest, Broderick said that thousands of people had flocked to her seminars from across Southern California. About 550 people paid $150 apiece last weekend to attend the two-day event, she said.

“We are teaching people how to live free and be out of the chains of a government that has gone mad,” she said.

Broderick’s seminars dip into the “common law” legal theories espoused by many members of the so-called patriot movement.

These theories, as tangled as the movement’s notions of government conspiracies, are based on obscure biblical passages, kernels of historical truth, and their own interpretations of the Constitution and common law.

Their common law courts and related documents surfaced two decades ago as an intimidation tactic by an anti-government militia group called the Posse Comitatus. The trend faded as the group dissolved and its leaders were jailed or died in firefights with police.

They have resurfaced again, with a few isolated clusters of local residents renouncing their U.S. citizenship. They claim that they are sovereign American citizens. They live in the Republic of California. They claim they are not subject to state or federal law.

Timothy Paul Kootenay, 35, of Thousand Oaks filed a rambling document stating that he is a “freeman” who falls outside the jurisdiction of the courts when he was cited last year for riding a motorcycle without a helmet.

Now, he sits in jail awaiting arraignment on forgery charges for allegedly buying semiautomatic assault rifles with bogus money orders given to United Parcel Service.

The money orders that Kootenay allegedly used came from the Family Farm Preservation, a modern-day spinoff of the militant Posse Comitatus in northern Wisconsin.

Kootenay helped another Thousand Oaks man formulate a similar defense strategy to beat a citation for driving with a suspended license in 1994.

Richard D. Chapel, representing himself at trial, argued that California traffic laws did not apply to him because Congress has been operating illegally since Abraham Lincoln declared martial law at the beginning of the Civil War, court records show.

A jury convicted him in a matter of minutes after a three-day trial.

Toby Chanel, a Westlake woman, has been among the most prolific freemen, filing court documents and demanding millions of dollars from authorities who she claims have violated her rights.

Chanel’s legal battles began with a series of traffic citations for driving an unregistered automobile with a suspended license in 1992. She failed to appear in court and a $5,000 warrant was issued for her arrest, court records show.

Two years later, she was again pulled over in the same unregistered vehicle. This time, she produced an “international driver’s license” issued from the Caribbean islands of Turks and Caicos, court records show. She was arrested and jailed on the warrant and later found guilty and fined.

As part of her own defense, she filed with the court “Notices of Dishonor,” claiming that sheriff’s deputies, five judges and three prosecutors owed her nearly $22 million for “attempt[ing] to induce me by trickery and gross misrepresentation through fraud and deceit to deprive me of my inalienable right to travel.”

Chanel also filed two civil lawsuits related to her arrests. They were both quickly dismissed.

A similar lawsuit is pending in U.S. District Court in Los Angeles. In that action, her list of defendants include the Ventura County Board of Supervisors, and various sheriff’s deputies and county judges.

Alan Wisotsky, an attorney defending county officials, said he last saw Chanel at a federal court hearing in Los Angeles in July.

“It was spooky,” Wisotsky said. “She had quite a following. It was very cult-oriented. They got there before she did. They marched her in and were very protective of her.”

More recently, Chanel has escalated the paper war, using a new strategy that has incensed local judges and other targets. She has sent them notices of multimillion-dollar “liens” against their properties.

Not only do the purported liens target judges, sheriff’s deputies and others, they often are mailed to their homes to the attention of their spouses.

Wisotsky said his wife received the notice of such a lien, as has the widow of Sheriff’s Deputy Mike Gillette, who died of a heart attack last year. Gillette was a patrol officer who wrote Chanel a traffic citation.

Some judges have received notices of a lien and then received a second document forgiving them a portion of the purported debt. Attached is an IRS Form 1099, carbon copied to the IRS and the State Franchise Tax Board.

Since a forgiven debt is taxable just like income, some judges fear that the filings could trigger an IRS audit.

“I teach that,” Broderick boasted in a telephone interview Wednesday. “We do the same thing to them as they do to us. . . . We send them a lien for $50 million and then release them from $10 million of it, so they can pay taxes on it.”

Assistant County Counsel Robert Orellana believes that the liens are meaningless. He has a growing collection of bogus liens targeting local judges.

“These aren’t real liens,” he said. “They misuse legal terms. They make up the law as they go along.”

But other county officials believe that the liens could pose a real problem if attached to homes or other real property.

“Once liens are attached, they are difficult to remove,” Bradbury said. “It becomes a cloud on one’s title. You cannot refinance and you cannot get a loan. They are a tremendous nuisance.”

So far, County Clerk and Recorder Richard Dean believes that none of the bogus liens have made it past his deputy clerks onto the books.

Broderick vows that the liens will have an impact in the patriot revolution, showing up on the targeted person’s credit history.

“We attach the lien to a credit report,” she said. “I have a company that pulls up their name and plops it on.”

Broderick faces 15 years in prison if convicted of the 30 charges against her.

Bradbury sees some of those involved in the phony check scheme as true believers expressing genuine, albeit misguided, frustration with the government.

But then, he said, “there is another group who sees this as an opportunity for a new swindle.”