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LaRouche Groups' Bank Assets Frozen in Fraud Scheme

October 19, 1986|KEVIN RODERICK and CLAIRE SPIEGEL | Times Staff Writers

Bank accounts of two Lyndon H. LaRouche-affiliated groups backing Proposition 64, the AIDS initiative, were ordered frozen by a federal judge after a lawsuit charged LaRouche and his extremist followers with a scheme to defraud elderly people of more than $2 million, it was disclosed Saturday.

U.S. District Judge Thelton E. Henderson issued a sealed order in San Francisco on Oct. 10 after an 83-year-old widow claimed that elderly people in 10 states had become victims of "high-pressure tactics and manipulative devices to extract loans the defendants have no intention to repay."

The suit was unsealed late Friday. Attorney Dan Bookin, who filed the suit on behalf of Margaret M. P. Beynen of Berkeley, announced the action Saturday.

The new charges are not related to a 117-count indictment returned on Oct. 6 by a federal grand jury in Boston against the LaRouche organization. Five LaRouche organizations and 10 of his associates were indicted on charges of wire fraud, obstruction of justice and contempt of court in connection with a nationwide credit card theft conspiracy. LaRouche was not named.

Hard-Sell Tactics

But court records and testimony filed in support of the indictments allege that LaRouche heads an empire of companies and committees that uses hard-sell tactics on potential donors, including promises of repayments that are never made.

Beynen's lawsuit was brought under the Federal Racketeer Influenced and Corrupt Organizations Act. It cites a "pattern of racketeering activity" that has repeatedly targeted the elderly, using mail fraud and wire fraud.

LaRouche and three groups under indictment in Boston were named in the San Francisco suit, which seeks a $64,000 repayment to Beynen and $5 million in punitive damages. The groups--Caucus Distributors Inc., Campaigner Publications Inc. and the Fusion Energy Foundation--have been named in other recent suits alleging that contributors were defrauded, including some who are elderly.

The San Francisco suit also names the Prevent AIDS Now Initiative Committee (PANIC), the campaign committee established by veteran LaRouche aides in California to qualify the AIDS initiative for the Nov. 4 ballot and promote its passage.

Two officers of PANIC, Khushro Ghandhi and Theodore J. Andromidas, were named in the suit. J. Philip Rubinstein, the president of Caucus Distributors, and Michael Billington, a LaRouche organizer in Virginia who was indicted by the Boston grand jury, were also included in the lawsuit.

Only One Account Frozen

A writ of attachment freezing the bank accounts was issued against both Caucus Distributors and PANIC after Bookin argued that the Proposition 64 committee received most of its money from Caucus Distributors. However, Bookin said the freeze order was carried out only against PANIC's Glendale bank account. "This is the only one we were able to locate in California at this time," Bookin said.

PANIC has reported raising about $250,000, most of it spent to qualify Proposition 64, which seeks to compel health authorities to keep records on people infected with AIDS antibodies and to remove them from certain jobs.

According to the suit, Beynen--whose only family is a blind, diabetic son--was induced by multiple phone calls in late 1985 and early 1986 to make four loans to LaRouche organizations. Beynen claims she was told that her money would be used to fight international drug trafficking and that she would be paid 10% interest. All four loans are now past due.

Beynen said Saturday that she believes that LaRouche aides got her name and phone number from lists of contributors to various charities. At first, she said, it sounded like a patriotic organization.

"A woman with a lovely voice called me from their headquarters in Leesburg, Va.," Beynen said. The calls then became more rude and insistent, she added.

"They (the calls) became a great nuisance," she said.

The tactics are identical to those described in court documents and testimony around the country this year. Telephone calls begin by saying that loans are needed to stop AIDS or fight drugs, then the calls become more frequent and demanding. An undercover Virgina state police agent said recently that he received more than 20 calls in a week after posing as a potential LaRouche donor.

'Campaign to Defraud'

The lawsuit, filed pro bono (in the public interest) by the San Francisco law firm of Farella, Braun & Martel, charges a "systematic, nationwide campaign to defraud the public through a loan solicitation scheme" that targets the elderly, often pressuring them to surrender their life savings.

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