Real paper tigers

Anti-government militias don't just bomb buildings and take hostages. Increasingly they're using "paper terrorism" -- fake courts, bogus liens, fraudulent tax forms and kited checks -- to spread the word.


Jonathan Broder
May 5, 1997 11:00PM (UTC)

as a confrontation with fugitive Republic of Texas members turned deadly Monday, and federal prosecutors continued their case against Oklahoma City bombing suspect Timothy McVeigh, law enforcement officials are struggling with another kind of militia terrorism spreading across the nation. Instead of using bullets and bombs, anti-government groups are barraging federal, state and local officials with bogus legal actions, including fake property liens, which can cost thousands of dollars in legal fees to remove.

Self-styled "patriots" and "constitutionalists" often use these liens to issue phony checks and money orders worth millions of dollars, which is then used to fund other militia activities -- some of them violent.

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In addition, militia members, through their own "common law" courts, have issued arrest warrants against judges, tax collectors and other officials with whom they have crossed swords. Last year, a group of militiamen brazenly marched into the Boise, Idaho, office of a federal judge and served him with an arrest warrant before police threw them out. Law enforcement officials fear similar confrontations could turn bloody.

These activities are called "paper terrorism," and some states are starting to take them as seriously as the more violent kind. "They pose security risks," warns Lawrence Wasden, a senior aide in the Idaho state attorney general's office. "They also pose threats to the economic well-being of public officials and anyone who may be a creditor."

Last year, the Southern Poverty Law Center, a human rights monitoring organization based in Montgomery, Ala., tracked 131 common law courts in 35 states -- a growth of 33 percent nationwide since 1995. Drawing on a mixture of half-learned laws, conspiracy theories and archaic and disused legal doctrines, such courts are often the starting point for a twisted paper trail that can tie state and local officials in knots for months.

"Common law court activity is definitely increasing," says Richard Baudouin, who tracks militia activity for the center. "And correspondingly, the incidents of paper terrorism are increasing too."

In the most common form of paper terrorism, disgruntled citizens challenge government bodies or corporations in such courts, which then slap liens against the officials involved. Often the liens are written up on bogus but official-looking documents and then filed in other counties or states to ensure they are recorded without question and become part of the targeted person or company's credit record.

Often the targeted victims don't know there's a lien on their property until they try to sell it. And even through the liens are legally meaningless, they still require legal action to get them removed. And that can be expensive. The Republic of Texas, led by Richard McLaren, filed a $100 million lien against a real estate development corporation, forcing the company to pay $12,000 to get the lien removed.

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"You can stand on principle, declare the liens meaningless and refuse to deal with them. But chances are, a bank or a mortgage company is going to recognize them and demand they be removed before they approve any financing," says Bob Cooper, another aide in the Idaho attorney general's office in Boise. "So the wisest thing is to pay your lawyer to get it removed so you can sell your property."

A related paper terror scam is the use of bogus debt forgiveness to create tax problems for targeted victims. According to law enforcement officials, militias, after slapping opponents with a huge lien against their property, then inform them, usually at Christmas time, that they are "forgiving" a portion of their debt. Then the militia files a bogus 1099 tax form with the IRS, presenting the forgiven debt as income earned by their targets. It can take months before the matter can be cleared up.

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Law enforcement officials say militias also use their bogus liens to generate cash for further anti-government activities. Using their recorded lien documents as collateral, militia activists then issue official-looking checks and money orders to their associates. In one of the largest such cases, a California court recently sentenced Elizabeth Broderick, known as "The Lien Queen," to 16 years in prison for issuing more than $1 million in fake checks against $2.3 billion in bogus liens. Much of the money went into the coffers of the Montana Freemen.

Still another scam of paper terrorists is their use of phony lien credits to win government tax refunds. Typically, as law enforcement officials explain it, a militia member will refuse to pay his taxes, resulting in a government lien against his property. The militiaman then sends an official-looking but bogus lien credit for double the owed amount. If county bureaucrats aren't watching carefully, the credit is recorded. Before the check can bounce, the militiaman informs the state he has overpaid his taxes and deserves a refund. With his lien credit reported, he often gets it.

According to Baudouin, the Montana Freeman frequently used the lien credit scam to pay for their guns and ammunition. By the time authorities caught on, the Freemen already were barricaded in their mountain redoubt. It took a siege of 88 days before they surrendered to federal and state police.

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Over the past year, such acts of paper terrorism have prompted Texas and a half-dozen other Western states to pass laws against the filing of bogus liens and make those who file them responsible for the legal fees to remove them. But such laws don't seem to be having much affect.

"We continue to see examples of it," Baudouin says. "As soon as a law is passed against it in one state, the problem just pops up in another state in another form. The states are getting more savvy, but they've still got a long way to go to catch up with these guys."

As states like Texas, Idaho and Montana start to fight back, the paper terrorists appear to be heading east. Incidents of paper terrorism are now being reported in Missouri, Illinois, Ohio and Kentucky. But according to Idaho's Cooper, Eastern law enforcement officials still seem to think that paper terrorism is purely a Western problem.

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"When the country's attorneys general get together, the Westerns talk about their real concern about this issue, but the Eastern folks just shrug it off. They think paper terrorists are one of those wacky Western things. But I can assure you, if they're not careful, it'll show up in New York someday."


Jonathan Broder

Jonathan Broder is Salon's Washington correspondent.

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