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California and the West

Four 'Freemen' Leaders Guilty in Bank Fraud

July 09, 1998| From Associated Press

BILLINGS, Mont. — A federal jury convicted the four top leaders of the anti-government Montana "freemen" Wednesday of engaging in a gigantic conspiracy against the nation's banking system.

The panel said it was hopelessly deadlocked, however, on the remaining eight defendants and other counts in the indictment.

LeRoy Schweitzer, Daniel Petersen, Dale Jacobi and Russell Landers were convicted of a conspiracy to defraud four banks in what prosecutors said was a massive assault on the U.S. banking system.

Those four were among six freemen convicted last week on several other charges in the indictment.

They could face lengthy prison terms and fines when sentenced.

No additional defendants among the 12 freemen on trial were convicted in Wednesday's verdicts. That leaves six defendants for whom the jury could not reach verdicts.

Jury foreman James Coates Jr. gave a firm "No, Your Honor," when U.S. District Judge John Coughenour asked if further deliberations were warranted.

The judge declared a mistrial on all counts still unresolved and gave prosecutors 10 days to decide whether they will retry the six defendants not convicted of any crimes.

U.S. Atty. Sherry Scheel Matteucci said she did not immediately know what the government would do.

Lead defense lawyer Tony Gallagher said, "The government made a mistake in charging these people in the first place."

He expects the remaining defendants to face new trials, but possibly individually.

The jury had been unable to return any verdicts last week on the conspiracy charge, which was the heart of the prosecution's case. The freemen issued 3,432 bogus checks totaling $15.5 billion.

Schweitzer, the mastermind of the scheme, was also convicted Wednesday on an additional count of defrauding Norwest Bank of Butte-Anaconda, which was the main bank targeted by the bogus checks.

Defense lawyers argued that the conspiracy against the banks never existed and that the freemen and their followers genuinely believed their various types of "checks," based on common law liens, were valid. They argued that their clients also were true believers in the alternative "government" they thought the freemen had established.

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