Trial of ‘Freeman’ Leaders Begins

Two years after a group of impoverished ranchers and small-town businessmen held the FBI at bay for 81 days on the windy plains of eastern Montana, leaders of the Montana “freemen” went on trial Thursday for what government lawyers called “a fraud of truly epic proportions.”

In a case that has almost come to symbolize the economic despair that turned much of the back-country West against the federal government, the freemen stand accused of establishing their own common-law government and a tiny sovereign economy that turned out, in the two years they reigned out of Jordan, Mont., $18 billion in worthless checks, liens and money orders.

Justus Township, the remote ranch compound made famous as the scene of one of the longest standoffs in the history of the FBI, had become the headquarters of a burgeoning political movement that refused to recognize the jurisdiction of the U.S. government, its agencies, its courts or its currency and had proclaimed its own government of “free white men” accountable only to the Constitution and the Magna Carta.

In opening statements before a federal jury, Assistant U.S. Atty. John Seykora said Thursday that the 12 freemen in fact had used their township to set up a massive and intricate network of phony financial documents used to defraud banks, car dealerships, catalog stores--even the Internal Revenue Service.

“This case you will hear involves a fraud of truly epic proportions, fueled by hatred and motivated by greed,” Seykora told the jury, hearing the case before U.S. District Judge John C. Coughenour.

“They bought some computers and they made some fancy checks. They made their own money for their own government,” Seykora said. “They were backed by nothing. Not one dollar, not one dime.”

But attorneys for accused freeman leaders LeRoy Schweitzer, 59, Rodney Skurdal, 45, and Dale Jacobi, 45, said the three were acting in good conscience against a government they believed had disenfranchised them.

“This was a leaderless group of individuals that had become dissatisfied with the government of the United States, dissatisfied with what they felt is a corrupt banking system, what they felt is a corrupt government system, what they felt is a corrupt judicial system--a system they felt would no longer allow them to redress their grievances,” said Anthony Gallagher, acting as standby counsel for Schweitzer.

Schweitzer had come to believe in the legitimacy of his alternative government and the financial instruments it created by “voraciously” reading the history of the nation’s banking laws, the Uniform Commercial Code and the original constitutional intentions upon which they are based, Gallagher said.

“In some cases, he knew the banking laws better than the folks who worked for those banks,” he added.

The unusual trial is taking place with only three of the 12 defendants present in court. The others are watching the proceedings on television in a conference room at the Yellowstone County Jail after refusing to go to court.

All but two of the defendants had to be “extracted” from their cells and dragged to the conference room, a deputy U.S. marshal told the court. Schweitzer and co-defendant Russell Landers, 48, refused to get dressed and sat in the conference room in their boxer shorts. Landers spit in the face of the deputy assigned to him several times.

Since their arrest June 13, 1996, they have repeatedly returned all court documents with scribbled notes saying, “No jurisdiction! No venue!”

Earlier this month, the freeman leaders issued declarations deporting themselves from the United States to their “country of choice, Montana,” and sent writs of assistance to the U.S. Supreme Court, the Joint Chiefs of Staff, the Montana National Guard, the secretary of State and the sheriffs of six Montana counties calling on the military to back their request for “asylum” in Montana.

A few days later, they issued an arrest warrant for Coughenour and a formal notice attaching the wages of two of their jailers to the tune of $45,308,220.

In the trial of a white supremacist movement that holds the right to bear arms as a sacred covenant, every member of the jury--culled from the ranches and farm towns of Montana--possesses several guns in the family. And except for one Native American alternate, all jurors are white.

Perhaps with this in mind, prosecutors are hoping they can focus the case less in political terms and more in the context of a fraud that duped recipients who actually cashed freeman checks of at least $1.8 million.

The method was nearly always the same, Seykora told the jury: The freemen would use their computers to generate a realistic looking check, money order or lien. The document would be sent in payment of a debt in excess of the amount owed. The freemen would then pocket the refund.

One freeman supporter not charged in the current case, for example, was nearly $7,000 in arrears in child support payments in Anoka County, Minn. He mailed the county a freeman “check” for $13,000, and handed the $5,712 refund over to Schweitzer. Schweitzer gave it to Cherlyn Petersen, the 53-year-old wife of alleged freeman activist Daniel Petersen Jr., 55, who deposited it in her own bank account and took out $4,000 in cashier’s checks and $1,500 in cash against it. Cherlyn Petersen says she had no idea the check was fraudulently obtained.

Defendant John Patrick McGuire, 58, allegedly mailed a fraudulent $912 check along with an order to L.L. Bean and got the clothing and a $16.50 refund.

Also facing trial are Richard Clark, 49, the owner of the foreclosed ranch that served as the headquarters of Justus Township; neighbor William Stanton, 67, and his wife, Agnes, 54; and John “Casey” Veldhuizen, 61. Two other defendants, Emmett Clark, 69, and Dana Dudley Landers--Russell Landers’ 48-year-old estranged wife--entered guilty pleas on Wednesday.

Dana Landers and the Stantons’ son, Ebert, will be among the witnesses who will testify about what went on inside the freeman compound during the 81-day standoff that began March 25, 1996, when an undercover FBI agent lured Schweitzer and Petersen, the two top leaders, to the fringe of the ranch compound and arrested them. Two dozen others were left inside as FBI agents blocked off the rugged dirt roads surrounding the ranch and eventually cut off the water and power.

While much of the nation watched the standoff from the remote viewpoint of a nest of news cameras positioned on a hill above the compound, affidavits filed as part of the court case reveal that the FBI could hear much of what was going on inside the ranch by way of a highly sensitive surveillance microphone.

The freemen, it appeared, were primarily concerned with positioning their food supplies: concerned that their two to four years’ supply of food might be inaccessible if the group were split up during a law enforcement assault. Dana Landers told a polygraph examiner that she was asked to serve on guard duty on two occasions with Ralph Clark, another defendant, and the “hardest part was to keep him awake.”

She said the women at the compound were sequestered and made to perform all the cooking and housekeeping duties.