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Ex-Congressman, Ex-GOP Official Convicted of Bank Fraud

December 12, 1992

BOISE, Idaho (AP) _ An ex-congressman and an associate were convicted of bank fraud in a check- kiting scheme, a case the former lawmaker attributed to government retaliation for his crusades against federal agencies.

George Hansen, an Idaho Republican who served seven terms in the U.S. House, and John Scoresby were found guilty Friday on 45 counts of bank fraud in what the government called a check-kiting plan that left the Bank of Commerce, Idaho Falls, holding $2.1 million in bad checks.

The two face up to 30 years in prison and fines of $1 million on each of 45 counts.

Hansen, 62, and Scoresby, 45, said they would appeal.

The check-kiting scheme was used to bilk nearly 200 investors in Hansen’s anti-government Free America Revolution program, prosecutors said.

Check-kiting is an illegal scheme in which a false line of credit is established by the exchange of worthless checks between banks, building phantom balances.

Prosecutors said overall, more than $21 million worth of checks were involved.

Known for his flamboyance, conservative positions and anti-government philosophy, Hansen calls federal government agencies like the Internal Revenue Service enemies of the people.

Hansen claimed prosecutors were after him because of his anti-government crusades. ″We’re more victims in this case than anyone,″ he said Friday.

According to prosecutors, the investors he duped gave money to promote efforts like the Free America Revolution, which Hansen said would return interest on their money. Instead, the money was used in the check-kiting scheme, the prosecutors said.

U.S. District Judge Edward Lodge allowed the two to remain free on their own recognizance and set sentencing for March 1.

Hansen, who was in Congress from 1965 to 1968 and again from 1975 to 1984, and Scoresby, his one-time aide and a former official in the state Republican party, were indicted earlier this year after a state inquiry into Hansen’s financial dealings.

In February 1991, the state in a civil lawsuit accused the men of violating securities laws in a scheme the lawsuit said bilked nearly 200 investors of $18 million between 1985 and 1990 through bad checks. Hansen signed an agreement admitting the violations and promised an effort to repay the money.

Earlier this year, another Hansen associate, Brad Neibaur, pleaded guilty to check-kiting. He received probation in return for cooperating with Hansen’s prosecution.

It was Hansen’s third conviction for financial wrongdoing.

In 1975 he was fined $2,000 for violating campaign finance laws. In 1984 he was convicted and fined $40,000 for lying on his federal financial disclosure forms. He later served a total of 12 months in prison.

EST

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