McLarens face federal charges

The Dallas Morning News/May 6, 1997

By Thomas G. Watts

Jailed Republic of Texas leader Richard Lance McLaren was named Monday in a 25-count federal fraud and conspiracy indictment that accuses him of issuing about $1.8 billion in bogus "warrants" for cash, goods and services.

U.S. Attorney Paul Coggins in Dallas also said that Mr. McLaren's wife, Evelyn, was charged with six counts. A grand jury in Dallas returned the indictments last Tuesday, but they remained sealed until Monday.

Five other people also were indicted, but their indictments will remain sealed until they are taken into custody, Mr. Coggins said. He said authorities expect to make the arrests within a few days.

Mr. McLaren, 43, the self-styled ambassador and consul general for the separatist group, and Mrs. McLaren, 50, remain jailed in West Texas after surrendering to the Texas Department of Public Safety on Saturday after a seven-day standoff. Mr. Coggins said they would be brought to Dallas, possibly this week. U.S. District Judge Joe Fish has been assigned the case in Dallas.

A hearing was scheduled in Alpine on Monday for Mrs. McLaren, but it was postponed until Friday, at which time prosecutors will seek to have her transferred to Dallas. Her attorney, Terence O'Rourke, argued that judicial proceedings in Dallas were not part of the agreement reached with authorities that ended the standoff.

"These defendants are not proud Texans, but rip-off artists," Mr. Coggins said in Dallas on Monday. He also described them as "paper terrorists" and added, "Our message to terrorists is: Don't mess with Texas."

Banks and other financial institutions rejected most of the $1.8 billion in warrants issued by Mr. McLaren and the others, Mr. Coggins said.

He said, however, investigators found that merchants and credit card companies had lost "hundreds of thousands of dollars" for goods and services and other payments the group received.

One of those warrants was for $4,569 to Print & Sign Designs in Fort Worth last November to print 5,000 Republic of Texas passports.

The firm's owner, Roger Downs, said Monday that the documents read "Passport" on the cover and "Republic of Texas" on the inside and there was room for a photograph and name of the holder.

Mr. Downs said he was happy that Mr. McLaren was apprehended but would have liked the $4,569.

Another small firm that lost money by working for Mr. McLaren was Kelly's Jewelry in Austin, which made 75 sterling silver "Ranger" badges. Kelly's was stuck with the badges after a warrant for $3,496 was rejected by their bank.

After notifying Mr. McLaren that the warrant had been rejected, owner Kelly Smith said in an interview, Republic leaders threatened to destroy his business if the badges were not delivered. Then he and his wife, Lisa, learned that it would have been against state law to deliver anything that resembled real Texas Ranger badges.

"I just make jewelry," Mr. Smith told The Associated Press in December. "I don't care if you want to play 'Roger Ramjet.' I'll make your insignia, and I'll make it nice."

Most of the warrants went to Bank One ($2,525,000) and NationsBank ($525,000) in Dallas and the First Class American Credit Union ($13,595.72) and the Omni American Federal Credit Union ($19,895.72) in Fort Worth. VISA ($7,835.78) and American Express ($333,000) monthly account charges were paid with the warrants.

The indictment said that one of the still-unnamed defendants used his American Express card to buy "airline tickets to Puerto Rico for others known to the grand jury."

"On or about Nov. 13, 1996," read the indictment, "others known to the grand jury" attempted to open a commercial checking bank account at Banco Bilboa, Guaynabo, Puerto Rico, using Republic of Texas warrants in the amount of $5 million.

It said those who traveled to Puerto Rico were known to be carrying warrants with a face value of more than $1 billion.

Mr. Coggins was asked whether Mr. McLaren would be treated as a diplomat from a foreign nation, and he answered simply, "No."

"The McLarens said they wanted to get to federal court," he said, "and this is their opportunity to get to federal court."

Mr. McLaren has said that he will continue to seek Texas' independence in the federal courts.

Reaction from the three Republic of Texas factions was fast and varied.

Mr. McLaren's supporters said the sealed indictments were illegal and that any trial would have to be held in Washington, D.C., because that was the only jurisdiction where laws passed by the U.S. Congress could be adjudged.

"Mr. Coggins is going to be in for a heck of a surprise," said Tim Perkins, who holds the title of "common law judge" in the Dallas area for the McLaren faction of the Republic.

On the federal use of purportedly illegal sealed indictments, Mr. Perkins said, "They do it all the time because the stupid people in this country let them get away with it."

Other factions, however, were not sympathetic.

Ray Wanjura of Cuero, Texas, the "secretary of judicial affairs" in the faction headed by Archie Lowe of Rice, said he agreed with "most of those charges."

"The whole thing with Rick was really idiotic," Mr. Wanjura said. "It was the biggest amount of bull that I ever heard."

He said the Lowe faction "impeached" Mr. McLaren earlier this year after he refused to stop issuing the warrants.

"It wasn't only wrong," he said, "but immoral as well."

Jesse Enloe of Fort Worth, the vice president of the third faction, headed by David Johnson of Odessa, said Mr. McLaren was thrown out of the Republic last fall after developing the warrant theory.

"We wanted to make it crystal clear that we had nothing to do with it," Mr. Enloe said.

Staff writer Pete Slover in Alpine contributed to this report.