LaRouche Criminal Trials - State Trials

State Trials

The Attorney General of Virginia, Mary Sue Terry, prosecuted eight LaRouche organizations on charges of securities fraud relating to $30 million in loans. The first trials were in Leesburg, but later trials moved to the larger city of Roanoke. In order for the prosecutions to proceed, a decision by the State Corporation Commission (SCC) was needed verifying that the loans solicited by LaRouche organizations were securities. Attorneys for the LaRouche organizations argued that a prohibition on raising funds through loans would violate their First Amendment rights. The SCC rejected that argument and decided, on March 4, 1987, that the promissory notes were securities. It ordered six LaRouche organizations—Fusion Energy Foundation Inc., Caucus Distributors Inc., Publication and General Management Inc., Campaigner Publications Inc., EIR News Service Inc. and Publication Equities Inc.—to stop their sale. Five other states had already issued injunctions, and 14 states eventually followed. At least one injunction, by the State of Minnesota against Independent Democrats for LaRouche, was appealed to the U.S. Supreme Court, which confirmed the lower court ruling.

Six of LaRouche's associates were convicted and two pleaded guilty. Rochelle Ascher, a fundraiser, was sentenced in Leesburg to 86 years (reduced to 10 years) for six charges of fraudulently selling securities and one count each of selling an unregistered security with intent to defraud, selling a security by an unregistered agent with intent to defraud, and conspiracy to commit security fraud. In two Roanoke trials, four other associates were found guilty of securities fraud charges: Donald Phau, Lawrence Hecht, Paul Gallagher and Anita Gallagher. Richard Welsh and Martha M. Quinde pleaded guilty and received 12 month and one month terms, respectively.

Michael Billington was charged in a Roanoke court with having knowingly solicited 131 loans that would never be repaid from 85 people, totaling $1.24 million. Represented by a court-appointed lawyer, he rejected a plea bargain that would have limited his prison sentence to the three years he had already served in the federal case. The lawyer, Brian Gettings, doubted Billington's competence and told the court that he believed LaRouche was making the decisions in the case rather than his client. The court ordered two psychiatric tests. The first physician deemed him competent. Billington refused to cooperate with a second examination that was to be conducted by an expert on cults. Billington sought to fire Gettings, who had already tried to quit over competency question, but the judge refused to permit Billington to substitute a different attorney. A LaRouche spokesman said that Billington was prepared for trial. Billington was convicted on nine counts of "conspiracy to fail to register as a securities broker". Under Virginia's court system, the jury determines prison terms although a judge may override the jury's recommendation. The jury in this case recommended 77 years (out of a possible 90); the judge refused to lower it because Billington continued to insist upon his innocence (which the judge deemed lack of remorse) and because he had warned that he would accept the jury recommendation if Billington requested a jury trial. Billington served a total of ten years in prison before being released on parole. The lead prosecutor said the case involved "willful and massive fraud that has caused a lot of people to suffer".

A trial in New York state courts on charges of scheming to defraud resulted in the conviction of Robert Primack, Marielle Kronberg and Lynne Speed.