GOVERNMENT'S RESPONSE TO DEFENDANT LAROUCHE 3/3
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IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA ELMER YODER, Plaintiff
vs. EIR, EXECUTIVE INTELLIGENCE REVIEW, LAURENCE HECHT, MICHAEL BILLINGTON, EIR NEWS SERVICE, INC., Defendants
CIVIL ACTION NO. 88-1656
VERDICT AND JUDGMENT AND NOW, this 30th day of January, 1990, following trial, a verdict and judgment is entered in favor of plaintiff, Elmer Voder, and against the defendants, Michael Billington, Laurence Hecht, EIR News Service, Inc. and Executive Intelligence Review, in the sum of $261,039.75. The Clerk of Court shall close this file.
William W. Caldwell United States District Judge FILED JAii30i39
Campaigner:- Publications, Dear 31rs»
Th* only recognition I receive in paymeht of the 1_ loan I lenb you In Juno 1993 is your magazine SIR ao I feel no obligation to ray for the aubacrlptioni Payment'was'duft In June 1985
I promised delayed payment'of $3000. ln September with ' \,'; another of $110') plus interest at b% in November'would be O.K. l''1 Oenereua terma If I do say 90 myaalf - but ao fir nd repaymnnt.';. Perhaps since the debt la owed by,you you would be interested *V; enough to hasten tho payment. I am % years ofjBgej my expenses have gone up and I have a partially dependent doru ; I hfled the1'.' money Thank you
Gconoe CONHAO CONSULTING MINING GEOLOGIST til OOUGLANE AVENUE AN JOSE, CALIFORNIA 95117 PHONE (401) 247-3961
Ulber, 1826 Noriega Arenue, 3an Frsnoisco, California 9<U'22. VY .,-. Suaaai f I received a letter from the La flouohfc Campaign'[
dated nor. 6th about anne of. the difficulties th->y hare had;./ Ii ,dorift'think any "eting" operations hav»:ta)ten place*'with any'of'' e loans or contributions that 1 hare mnds, but for the purpose of your own records and those of the Audit Division in Mew Tork l-hare Hated them as followai n .
lv,8/^L2/fl5. Bank of America Check BA **297 to Campaigner Publioatlone v v i^toV.jl'OAJI of $2000 O 10^ for two years, due 8/12/85j;§igned by '
2* ,^/38/93;BA t»033 to Fusion Energy Foundation LOAN $2000 0 12?* (.y v.for 12 months, dus 3/2'»/0** aigned by Susan lilberj San: f'i Francisco. 5/20/8^ agreed to roll orer 6 months to 9/28/8^. 3. %/ll/03 DA(f055 to Fusion Energy Foundation LOAM $1000 0 12V./ . for 12 months, due b/ll/Bb signed by SusAn ^ilbsrA'i/ry' :%'-' ' :1' On 10/9/6^ I received a check for $150.00 Interest payment.
^.10/25/05 BA^»'»53 $1000 « Q% to San Francisco Labor Committee for 30 days signsd by Suoan Ulber. PAID IM FULE 12/27/05* 5. 11/10/83 BA '»50J to San Francisco Labor Committee $1000 9 12^. for six monthn LOAM fignod by Susan Kilber, dujj; 5/18/8^. : .6.. 3/7/8^ BA ^6^0 S750 O1 % LOAM ttquostbd Br-BuoiUt iltitie^foP.-V ,th« La Rouche Oaipaign. 7* 5/7/0'f BA'»6>1 $250 « - t LOAM 7 requested by-'Susan'rilberV 'iV.
250 .for thf San Francisco Labor Committee* 8,-ii/15/8^ BM961 $200 COHTRIBUTIOM to Undependeht, Democrats' for LaRouoh* requested by Susan Kilber. - "" ' CROCIER MATIOHAt BAHX MASTER CARD phoned by Susan kilber. }VJ >' 9. 12/9/83 Fusion Energy Foundation Contribution ,:.$500) 1/5/8^ Campaigner Publications, How., Tork . La Rouche Campaign contribution C'2501.; 2/21/8^ Fusion Energy Foundation contribution ..500 13* '*/5/0^ ^* Rouche Campaign oonttlbution 14< 5/16/0^ La Roucho Campaign contribution 1% 6/26/8^ Campaigner Publications, Hew Torit ' 16. 7/l'*/9** La Rouche Campaign contribution 17* 7/17/8^ La Bouche Cumpnign contribution 19. 8/30/8^ La Rouche C^jspaign contribution
atomic CONRAD HCIKIB, MININQ oKOLoatrr, Ml DOUOLANC AVENUE. sAH JOSK, cALirortMiA 15117
Mre. DftTld tilber Deo. 8» 198^ CROCKER NATIONAL BANK MASTER CHARGE phoned by Susan tilber (Continued) 19* 8/30/8** La Rouche Cnmpnlgn LOAN FOR* JO DATS'': 20. 11/15/8** BAV961 Indopendent Democrats for La Rouche $100 contribution plua $100 for partial paymentU to Executive Intelligence ReTlew"subscription. V.f*
Loana by Bank of America oheoka added up to fs66p of which $1000 hae been paid plua $150. in intereat.
Of the $3150 paid by Heater Charge the $500 for;the fusion Energy foundation of 2/21/0^ is probably taz deductible in 198*1 and except f*»r the $300 thirty day loan <*f $500 of 6/30/0'* ihfe rest Is chiefly political oontributiona and publioations* Aa I mentioned to you over the phone recently, my Haater Charge haa been stoppnd. Alao, sinoe the loans oame out of my -Sarings Account I would deeply appreciate aa much reimbursement'as possible aa soon ao it oan be arranged. ' As I mentioned to yoU* I am over 8*t years old, the mining consulting buaineaa Ii from rkrf quiet to sero, ac that I can't got out in the field ad'much all I would like. Thia puta a burden on the Social Securityijaymentii; ,'^ and other.meagre income< and haa me heatily in debit L worit aiong wiin nim TCFJ oap»Die your ability to raise money orer
I am well pleanedwith what Mr. Laflouohe H4s acobmpllehed and hope he can keep up tho good work along Vith hia Tery capable wife. Alao I oompliment you on the telephone; .".
Copy to i Audit Section The LaRouohe Campaign P.0» Box 2150r O.P.O. He* Tork, H.I. 10116*
GEORGE CONHAD HEIKES CONSULTING MINING GEOLOGIST 112 OOUGLANE AVENUE AH JOSE. CALIFORNIA 93117 PHONE (401) 247-)»GI 11 vi-
October IJi'lW* ^^ \|!;
Hr. Ed Spannous, Treasurer, -., ".ia Rouoh* Campaigns, P.O. BOX 17720, ij .Vaehlngton, B.C. 300^1-720 j Dear Mr* Spannoust
Herewith i§ a copy of toy letter to yoa'of 23, 1905. I urgently need your htlpl Since I wrote that letter, which has not been acknowledged, ny physical and financial situation has worsened considerably. Pleafie pay tip at least One of your 12000 notes ' rrf- "'. as soon as ponsible and let me know hoW you plan to *, _" ,- M pay off the rest of the obligations. '- ,1 Tours truly,
MOTOIl TRANSIT COMPANY 3eneral OlllceB * 6080 Carlisle Pike Mechanlcsburg, Pennuylvanla 17055^ April 2, 1986 '' . "'.:;''^-'."i .' ;.- ji*i ' ;» *a*?.'S i r Vi IHPORTAHT - DO HOT DESTROY OR :' MISPLACE THIS LETTER
This letter Ifl written to certify that you Social Security number / 7d - J f V/ i were employed !'bfj. _ fc*-i» - _^ J ."* * ' _ **» i » -t'lM- W Do not loss or misplace this latter ag you will tubura to xerlfy pravioua employment and -to apply for benefits^ If you disagree with any Information eonta please contact the Human Resources Office at the addr latel T . Your contact ahould be made in writlrtg item(s) with which you disagree. Sincerely yours ;< HALL'S MOTOR TRANSIT Motor Tram through the a permanen Bankruptc U. S. Diat March 10, 1986.
Mr. Wayne Hlntc Publication i General Management, Inc. P.O. Box 836
Leesburg, VA. '22075
March 7» 1986 :.
R»fflr«nc« your letter of Maroh 1, 1986, I will trj to raiternta MB briaflj as poaeibl* the history of the loans I hare made to B1H/CDI, et.al. . from my Chnee (98?, Cauoue account. On - As you will eee from the enoloeedeoplee of bills VISA aooount, between June 22, !985» nnd August 22, Distributor! ohnrged a total of $10,350 to said Ootober 23, 1995. « oredit of $1,000 from GDI -was applied to the *4 count | reducing the original. amount to $ 17 | 350. I believe the S50 charge on August 6, 1985, w«s ny otfn trial subscription to EIR, bringing the amount of the loan to your drganieation to $t 7, 300.
Xezt, you will eee In the oopiee of my American Express locount, between June 25 r 1985, and Augunt 19, 1985. dan Souoi Truvel charged (for SIR) a total of $13,383*38. Flight inauranoe coating $15 vas added to thle, bringing, the total loan tin hy Sign A Travel aooount to It3(398«39»
I an also enclosing ooples of eleven letters from GDI/PGH, dated from July 15, 1985, to September 30»"'1985, thanking me for oontri- butiona/purohases/subsoriptions totaling $l9;550i Ai ydu will note, I did not sign any of these, because I did not make any. such contributions, purchases, etc. I havej'in factj received numerous publications-which, according to Ms i Rochelle Aacher j were sent because I had agreed to loan your drganitation the above entloted amounts on ay VISA'and AHEX accounts* ;f ,. \\-. ]; ^!-^:f.::'>.:^ f ';';ii';V:::'l/S;-:l The last* eoclosureaare copies of the only'three-Unsecured Promissory Rotes" sent to ne by MB- Asoheri1! presume that the reason that no other notes were sent was because the amount was changing from month to month. Perhaps Ms * Asoher could provide some clarification.
The" ibote indicates that I loaned jour organic* tlonj ' Inl tially j a total of $30,690.70. According to' my reeorde , t hura received the following paynents frota your organisation (sppfoiimate datsa)t
1-330, ;450 '.450 750 1.386 1.300 1 »300 00 00 00 00 25 00 00 £ 07-22-85 .08-06-85. 08-29-85 ,09-26-85 11-20-85 12-18-85 02-25-86 $5i966.25 .Total
particular loan not Include the does it Include Ky Chase VISA balance was $4,040.91 before GDI began making loans against that account and the only other charges that hive been added was the annual fee of $35. As of January 24, 1986* the balance oved on this account was $19*696*69, plus interest. This brings your organisation's shire of this dovn to $15,620*78 (plus Interest), yThis does payasnt I Bide in February) however, neither the arrears io your payments to as. V
On By American Express account, the "Sign A Travel** balance was $236.53 before San Souoi Travel begun charging (for EIR) airline tickets. No other "Sign 4 Travel" charges have been ads, and tha balance, ae of February 5, 1986* WAS $11*333.04, plus interest. This leaves your organisation'I ahare of this loan at $11,096.51 (plus interest). Again, this doss not include the Arrears in your payments to ae« ... ','.; ,-: , ?&. '. »'.' ~ -' .. .' ." _v, . -j ." .-«i ; -. . . r. ' * As I have told you and Ms. A sober on numerous occasions* I cannot afford to Bake the payments pertaining tot your ' organ leatlon' s sharS of these 'acoounta.' The loans vsre mtidb at the insistence of KB. Asoher and under the condition that EIH/GDI/POM would ake the Monthly parents in a timely .Banner i, .
I an in desperate need of all money owed to me|[not the least reason of whioh is that I require surgery on m/ left -,.eye «nd y insurance policy does not cover all the expenses* , I have v already shared aany of the other reasons with you
trill b« taor* thin gled to provide you with copies of my monthly sooount atattienta, so that you c*n .verify the status thereof. I rtqutat your tsaiatane* for/financial relief* .-. '
lens L. park«r A'rton K-5 V*lls Arriba Heights Carolina, P.R. 006JO
P.3, . I will be ivny from Puarto Rico until approzima taly Haroh ', 16 or 16, 1906, but would appreciate any paymente you.;' ..' can Bike to my hoae address. Hy son will make any. necaaaary deposits to ny checking account* it.
record H. Berry, Clerk
IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA ELMER YODER, Plaintiff
vs. EIR, EXECUTIVE INTELLIGENCE REVIEW, LAURENCE HECHT, MICHAEL BILLINGTON, EIR NEWS SERVICE, INC., Defendants
CIVIL ACTION NO. 88-1656 FILED
JAN 3 01393 : M i .RAN L_M ::OMALD ?M)T"7Y -2F1.*
This action was brought against the defendants to set aside the transfer of certain property delivered to defendants by-plaintiff Elmer Yoder. On or about August 20, 1988, the plaintiff, then aged 88 years, and who lived alone, was contacted by telephone by a representative of Executive Intelligence Review (EIR), seeking a contribution to support the work of EIR. EIR publishes a variety of material on current world and national issues, mostly of a political nature, including such things as AIDS, hunger, national defense, star wars, etc. It seeks to influence public and governmental opinion and action on the subjects in which it is interested. Although it does not appear that Mr. Yoder had heard of or contributed to EIR in the past, in response to the phone call on the same day he sent EIR a check for $1,000.00. EIR
thereupon solicited Mr. Yoder in earnest, and in the space of eight days, between August 29, 198B and September 6, 1988, plaintiff delivered various stock certificates to representatives of EIR worth approximately $260,000.00.1 As soon as family members learned of these events suit was filed in Adams County to void the transfers based upon the plaintiff's lack of mental capacity, undue influence used against him, and alleged improper high pressure tactics that included misrepresentations. The case was removed to this court, a non jury trial was conducted on January 23 and 24, 1990, and this memorandum is the disposition of the case. After seeing/ hearing and observing Mr. Yoder, and after considering the testimony of a medical specialist concerning his mental condition, there is no doubt whatever that in August 1988 Mr. Yoder lacked the mental capacity to make an intervivos transfer of his property to EIR. While Mr. Yoder may have been somewhat oriented to his surroundings, and to some extent to his financial affairs, this appearance is misleading. For a number of years Mr. Yoder has had a diminished Mental capacity due to primary degenerative dementia, which is a condition in the Alzheimer's family of mental illness. As a result of this condition he would be easily influenced by a designing person, and 1. The contacts at Yoder's home were by telephone, messenger, and personally by defendant Billington. Plaintiff withdrew the stock certificates from his safe deposit box on four different dates and delivered them to EIR.
could not exercise independent judgment concerning his actions, and particularly in managing or disposing of his assets. The evidence showed Mr. Yoder to have a financial concern for his church and college, to whom he contributed generously. Prior to 1988 Mr. Yoder also made many modest gifts from his income in response to charitable solicitations, but he lived a very modest lifestyle, conserving his principal assets. In connection with the purported gifts of stock to EIR it is highly significant, and we accept it as factual, that Mr. Yoder did not know the name or the purposes of the organization to whom the transfers were being made, nor the identity of the individuals to whom he had spoken or delivered the stock certificates. At the time the only point that Mr. Yoder appeared to be cognizant of or concerned about was that the recipient was a charitable organization. His subsequent contact with the defendants related to confirming his belief in the charitable status of the donee, and the deductibility of his transfers for income tax purposes. EIR is not a charity, however, and it incorrectly informed Yoder that his gifts would be treated as charitable contributions. Based upon the evidence we conclude Mr. Yoder actually lacked the mental capacity to make any intervivos gifts and the value of the property turned over to EIR must be restored. Plaintiff also asserts that the defendants engaged in high pressure tactics and used undue influence on him, and he seeks punitive damages for wanton and outrageous conduct. 3
Plaintiff nay be correct, but it is unnecessary at this time to resolve this contention. There were no witnesses and no evidence as to defendants' actual conduct in dealing with Mr. Voder, and we were only informed generally of the fund raising methods and tactics employed by the defendants up to 1986. While it seems fair to assume that these questionable practices continued into 1988, we will not decide if there was sufficient evidence to void the transfers based upon undue influence. We must therefore also decline to award punitive damages. FINDINGS OF FACT 1. Plaintiff is Elmer Yoder of 685 Blackhorse Tavern Road, Gettysburg, Pennsylvania. 2. At all times relevant to plaintiff's complaint, plaintiff was eighty-eight (88) years old and lived alone at 632 Fairview Avenue, Gettysburg, Pennsylvania. 3. Defendant EIR, also known as Executive Intelligence Review, maintains an office and operates a business in Washington, DC and/or in Leesburg, Virginia. 4. Individual defendant Michael Billington (hereinafter referred to as "Billington") was an agent or employe of EIR at all times relevant to plaintiff's complaint.
5. Individual defendant Laurence Hecht (hereinafter referred to as "Hecht11) was an agent or employee of EIR at all times relevant to plaintiff's complaint. 6. Defendant EIR News Service, Inc., is a corporation utilized by EIR to publish the Executive Intelligence Review. 7. On or about August 20, 1988, a representative of EIR telephoned plaintiff to obtain a contribution. 8. On August 20, 1988, plaintiff sent a check of Si,000 payable to EIR. 9. On or about August 29, 1988, plaintiff entered his safe deposit box and withdrew stock certificate number NX163425 representing 1,000 shares of Tenneco, Inc. common stock.
10. On or about August 29, 1988, an EIR courier picked up the stock certificate and a letter of authorization. 11. On or about August 31, 1988, plaintiff withdrew from his safe deposit box certificate number C940881, representing 1,000 shares of Consolidated Natural Gas Company common stock. 12. On or about August 31, 1988, a courier from EIR picked up the Consolidated Gas stock certificate and a letter of authorization from plaintiff. 13. On or about September 2, 1988, defendant Billington visited plaintiff in Gettysburg. 14. On or about September 2, 1988, plaintiff entered his safe deposit box and withdrew stock certificate number 17715
representing 5,629 shares of CCNB Corporation common stock (CCNB Stock). 15. On September 2, 1988, a representative from EIR picked up the CCNB Stock certificate and a letter of authorization from plaintiff. 16. On or about September 6, 1988, plaintiff entered his safe deposit box at the Gettysburg National Bank and withdrew stock certificate number C3338314 for 2,000 shares of Consolidated Natural Gas Company common stock. 17. On or about September 6, 1988, a representative from EIR picked up the Consolidated Gas stock certificate and a letter of authorization from plaintiff. 18. On or about September 7, 1988, Billington telephoned plaintiff. 19. On or about September 13, 1988, Billington telephoned plaintiff, and also spoke with plaintiff's daughter. 20. Defendant EIR News Service, Inc. traded the aforementioned stock certificates through its account with Baker Watts & Company, a brokerage house located in McLean, Virginia. 21. EIR News Service, Inc. received the proceeds from the sales of the stock certificates. 22. On or about September 15, 1988, a complaint was filed in the Court of Common Pleas of Adams County, Pennsylvania against the defendants in this action.
23. On or about September 15, 1968, the Court of Common Pleas issued a temporary restraining order prohibiting the transfer of ownership of the aforementioned stock certificates. 24. On or about September 20, 1988, after a hearing on plaintiff's motion for preliminary injunction, an injunction was issued by the Court of Common Pleas prohibiting the transfer of ownership of the stock certificates. 25. On or about October 5, 1988, defendants removed this action to the jurisdiction of this court. 26. At all times relevant to plaintiff's complaint, plaintiff suffered from diminished mental capacity due to primary degenerative dementia. 27. As a result of his condition, plaintiff could become the victim of designing persons. 28. Defendants utilized repeated calls and visits in order to encourage plaintiff to contribute funds to EIR. 29. Defendants solicited contributions from elderly persons as a practice.
30. Defendants' solicitation tactics emphasized an urgent need or emergency that required contributions. 31. Defendants represented that the contributions were necessary to produce publications regarding various imminent national and world problems such as defense, AIDS, hunger, star wars or SDI.
32. Plaintiff's contributions were not necessary or even utilized to accomplish the publication and distribution of any specific periodicals. 33. The defendants represented in correspondence dated September 3, 1988, that contributions by plaintiff would be used to send publications to public libraries and that such contributions constituted charitable contributions. 34. Defendants suggested, or knew that plaintiff believed, that the contributions labeled as charitable contributions were tax deductible. 35. Any suggestion or representation Bade by the defendants that contributions were charitable or tax deductible gifts was a misrepresentation. 36. The alleged gifts of stock to the defendants were not the result of free, voluntary or knowing acts by plaintiff.
37. The corporate defendants are corporations that do not have tax exempt status. 38. The defendants solicited contributions under the guise of charitable contributions without filing a registration statement as is required by the Pennsylvania Charitable Organization Reform Act, 10 Pa. C.S.A. § 161.6(a). 39. Defendants made misrepresentations of material facts concerning the status of contributions from plaintiff.
40. The defendants intended that plaintiff would be induced to act based upon the misrepresentations as to its charitable status. 41. Plaintiff relied on the misrepresentations. 42. Plaintiff suffered damage as a result of defendants' actions. CONCLUSIONS OF LAW 1. This court has jurisdiction over the parties and the subject matter of the dispute. 2. Defendants have failed to demonstrate valid gifts made by plaintiff to defendants. 3. The alleged gifts of stock are void because plaintiff lacked the mental capacity to make the transfers outlined in plaintiff's complaint. 4. The alleged gifts of stock by plaintiff to defendants are void as against public policy because they were achieved at least in part through a violation of the Pennsylvania Charitable Organization Reform Act, 10 Pa. C.S.A. 5 161(a) (Supp. 1988). 5. Defendants are required to return to plaintiff the value of the stock conveyed.
6. In August/September 1988 the stock certificates wrongfully obtained by defendants had a market value of $261,039.75. 7. Plaintiff is entitled to a verdict and judgment against each of the defendants in the sum of $261,039.75.
William W. Caldwell United States District Judge
A 073 A
Date: January 30, 1990