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Grand Jury Indicts 16 Followers Of LaRouche

February 18, 1987

LEESBURG, Va. (AP) _ A state grand jury Tuesday indicted 16 followers of political extremist Lyndon H. LaRouche on felony securities fraud and other charges.

A state prosecutor said the charges stemmed from the sale of notes and other securities on behalf of LaRouche-related organizations and involved a portion of $30 million in allegedly fraudulent solicitations over several years.

State and city police and Loudoun County Sheriff’s deputies began arresting the LaRouche followers Tuesday evening at their homes and at LaRouche’s headquarters in Leesburg, about 30 miles outside Washington.

Also indicted were five LaRouche-related organizations, said Sheriff’s Lt. Terry McCracken.

LaRouche himself was not charged, authorities said.

McCracken said all were charged with multiple counts of securities fraud, sale of unregistered securities and selling securities as an unregistered agent.

Prosecutor William Burch said each was a felony carrying a maximum two to 10 years in prison.

Burch said he did not know how much money was involved in the charges but that investigators had found $30 million had been raised by LaRouche fund- raisers ″through similar transactions″ over several years. He said they involved soliciting a loan or sale of a promissory note in which the person selling the note was not registered with the state and made false or misleading representations.

Burch said that figure and the arrests were based on financial records and other evidence seized by state and federal agents in a raid at LaRouche headquarters last Oct. 6.

Dana Scanlon, spokeswoman for LaRouche, charged that the arrests were part of a ″political vendetta.″

″The only victims here are victims of a fraud of justice,″ she said, standing outside the county jail as the LaRouche followers were brought in.

One of those arrested, Lawrence M. Hecht, said as he was brought to the jail in handcuffs, ″It’s political harassment.″

McCracken said the arrests involved money solicited from people across the country. The indictments were sealed and the names of those charged were released as they were arrested.

Scanlon described those arrested as political fund-raisers and organizers for LaRouche. She described the arrests as part of a government effort ″to shut down his political movement.″

Authorities said five were thought to be outside Virginia, including three arrested on Virginia charges in Baltimore. They were identified as Rochelle Ascher, Fred Haight and Keith Levitt.

Those arrested included: Michael Billington, George R. Canning, Richard E. Freeman, Martha Quinde, Lawrence M. Hecht, Richard Welsh, Kathy B. Wolfe, Paul and Anita Gallagher, and David M. Shavin. Paul Gallagher is executive director of LaRouche’s Fusion Energy Foundation, and Canning is secretary of Caucus Distributors Inc., one of the groups that raises money and distributes publications for the LaRouche organization.

A frequent fringe candidate for president, LaRouche espouses eccentric theories of world conspiracies. He has said he is running for president again in 1988 as a Democrat.

Two federal grand juries are also investigating the LaRouche operation. A grand jury in Boston has indicted 13 followers, two of his 1984 presidential campaign committees and three other LaRouche fund-raising groups on charges of federal wire and mail fraud, conspiracy to obstruct justice and criminal contempt.

Another federal grand jury in Alexandria, Va., is investigating the LaRouche organization, and state authorities in New York and California have investigations. Federal prosecutors have filed court papers saying LaRouche and other follower failed to file income tax returns.

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