Investment gurus decry 'terrifying' raid Feds launched 'major military' attack on Arizona couple

By David M. Bresnahan

Organizers of an international, offshore investment pool had their Arizona homes raided in what they claim was a terrifying and illegal military-style seizure by federal law enforcement agencies.

Federal agents dressed in black and carrying heavy arms raided two private homes in Arizona on May 10, seized many items, interrogated the occupants at gun point and left without making any arrests.

The victims claim the tactics of the Securities and Exchange Commission, Federal Bureau of Investigation, Internal Revenue Service and local drug task-force agents terrified them. Information obtained from the SEC indicates action was taken to protect investors who may have been fraudulently enticed to participate in what the SEC claims is an illegal investment scheme.

"It appears to be just like a major military thing; 15 or 20 people come down on you with such enormous force -- and so suddenly -- it was a terrifying moment," John Wayne Zidar told WorldNetDaily.

"I now know what it is like when a woman is brutally violated by a group of men, and she has no way again of having the same reality before it happened. It is a real violation of your sense of humanness. It just makes no sense at all," Zidar said.

The Zidars run the World Community Educational Society, which they say is a college. It provides information and courses dealing with a variety of subjects, including the Federal Reserve System, taxes, alternative health care, offshore banking and other topics. They believe their real offense is teaching what government officials do not want the public to know -- and that they are now paying the price.

According to Zidar, he and his wife were pulling out of their driveway in a Gilbert, Arizona, neighborhood when, without warning, federal agents in full assault gear surrounded them with automatic weapons drawn -- some pointed at their heads.

The two were taken into their home, searched and handcuffed, then taken to separate rooms for interrogation.

"They went through an immediate attempt to interrogate us under some pretty incredible terms. I could hear my wife weeping in the other room and I couldn't do anything, of course, because I was held in a different place," Zidar explained of the ordeal that would last for eight hours.

Zidar told WorldNetDaily that federal agents used extreme fear and intimidation throughout the ordeal. He claims he was not given an opportunity to examine any warrant or legal papers and was denied an opportunity to call his attorney.

"One of the female officers standing right there waved a group of papers in her hands and said, 'We'll present you with this when we're done. And, do you want to talk to me now or not?'" Zidar said.

"I simply said to her, 'Look, I haven't even got a clue at this juncture what's going on, let alone the time to read all those papers you've got in your hands. There's no reason to talk to you without at least an attorney present.' She got very tense, took the papers she had in her hands, instead of leaving them with me to at least look at and know what in the world was going on. She walked away with them, went in and closed the door and proceeded to take my wife and attempt to do exactly the same thing to her. "I could hear my wife finally say, 'I haven't got a clue. I'm not going to answer any questions.'"

After it was determined that the Zidars would not talk with the federal agents, they were given two choices.

"Either we would sit in the premises in one spot, under guard for the entire period of the seizure, or we could walk out and walk down the street and were not allowed to return until they had vacated the premises," explained Zidar of the unusual circumstances. "So we chose to simply sit there under armed guard for the eight hours, including each of us having two trips to the bathroom with a guard with us."

Armed guards worked in two-hour shifts, keeping watch on the Zidars, while other agents spent the day removing everything they could find in the home, including motorcycles that were in the garage but which belonged to friends of the Zidars.

They took "everything and anything," Zidar said. "I didn't know what they were taking." He was not permitted to observe the agents as they conducted the search. "At the end of the day, they supplied an inventory and had me sign-off on 32 inventory sheets."

Zidar claims the agents wore black uniforms with no visible identification and did not identify themselves by name or agency. He saw some with a badge on their belt but he was unable to read what was on the badges. The men who guarded the Zidars did tell them that they were helping-out and were from the local drug task force. Insisting that none of the officers or agents gave their name or wore any identification, he also said they wore dark sunglasses and hats to make it difficult to recognize them again.

The Zidars were not given any legal papers until the agents were leaving.

"When they were ready to leave, the one lady, who I believe they referred to as the chief, she came up and said, 'Did anyone give you the search warrants and all of that information?' I said, 'No.' And she said, 'Oh, I'm very, very sorry. You should have received it.'"

At the end of the day, the Zidars were left in their home with most of their possessions gone. Their clothing and furniture were all that remained.

"They took the vehicles. They took a lot of things that to this day I don't understand. Strange things that were not by my definition any part of what they were looking for, but that's beside the point," said Zidar.

Federal agents also simultaneously raided the home of John Matthews. It was a similar raid in which Matthews, his wife and teenage son were subjected to more rough treatment from federal agents in what was described as a military-style raid. No criminal charges were filed.

The Zidars had been involved in a recent legal action brought by the SEC in the Federal District Court in Denver, Colorado. A news release sent to members of the World Community Educational Society stated:

"The Securities and Exchange Commission (SEC) recently called Mr. Zidar and Mr. Matthews into an inquiry in a courtroom in Denver, Colorado. In a series of court appearances, they were not accused by the SEC of any criminal acts, nor were they presented with any evidence of wrongdoing. They were not detained, and were due to appear for yet another hearing in the Denver courtroom before the judge in June. In point of fact, the judge had made it clear in the most recent court appearance that he failed to see any evidence which would warrant a return to his courtroom by any of the parties involved, and had suggested that the agents of the government were wasting his time. He further admonished the parties to settle their differences as gentlemen."

Without warning, the federal agents showed up in force in what Zidar claims is a desperate attempt to prevent his investment pool from functioning and to place him in a position in which he cannot defend himself.

"They went around the judge, apparently, and decided to make this a full-scale assault. Since they could not get what they wanted legally, they would just do it by force," said Zidar.

"They went around the judge and got a judge in another state (Washington) to execute these orders upon their information. Of course, the judge in Denver didn't know any of this was happening, so we had no clue that this was happening or coming or anything was going on. I will tell you it truly was a surprise. It was a real attack," he said.

A raid also took place in Samoa, where Zidar's group owns a private bank. Federal agents seized the bank and all the assets.

"The interesting part is the corresponding bank is the 25th largest bank in the world, called ANZ, which is Australian-New Zealand Bank. We own a private bank, the Private Development Bank of American Samoa. Our corresponding bank is in Samoa, which is a non-treaty nation with the United States," explained Zidar. "It is apparent now, based on what we now know -- which is not a whole lot because we're getting hit nearly every day somewhere -- that they bought, coerced, convinced, and went around the entire legal system of a free country and attacked a bank."

Zidar claims that federal agents went to Samoa and met with ANZ bank and Samoan government officials to find ways to "go all around their laws."

He said a similar seizure of funds in the U.S. took place in Seattle.

"Our escrow agent operated out of Washington Mutual Bank as a W8 account (a designation by the IRS for a non-reporting account). All funds always flowed through the escrow agent so there could never be any commingling of funds or, obviously, any fraudulent stuff. Each member who became a member of the pool pension fund was a numbered account, was registered and certified, so there was certainly no laundering there." He said the seizure in Seattle was illegal because "the law clearly states that under the bank privacy act if you're not duly notified that there has been ... a suspicious bank report or activity report filed, and that there is going to be an investigation or seizure of records or funds, then you have an illegal search and seizure. They did that as well."

The ANZ bank, headquartered in Melbourne, Australia, does have an office in Samoa. WorldNetDaily contacted bank officials Paul Edwards and Michelle Gibbings who have not responded to requests for information.

Zidar says he has a very simple defense for his activities.

"There is Supreme Court evidence that First-Amendment, non-incorporated associations may form," explained Zidar. "The right of those associations to freely contract with each other is completely legal. It is also very clear to read the exemptions where there is no jurisdiction by the SEC, that it is entirely legal and proper for those in a closed club or society, under the right of private contract, to place funds in an international pool for profit and it does not fall under SEC's jurisdiction by their own exemption rules. If that is as simple as it is, why then are we being attacked? Why would I be suspect that I hadn't done it honestly up front? So, am I naive or am I witnessing the Big Brother you and I read about years ago?"

Zidar said he has always known that his activities would one day land him in court but he never thought that he would face an armed assault by federal agents. Despite the trying circumstances, he said he is still willing to pay the price for what he believes to be right.

"If a guy like me is not willing to put it on the line, what is there for your children in the future if somebody doesn't do it? Who's going to? ... If we don't make the effort, then we assent to government's total control ultimately. And history has proven that correct.

"I don't care what country you talk about, all the way back to Persia or Rome, right up to England or Germany. You will find that ultimately government consumes a people assenting to its control. ... We as an educated people have to come forward and people like me and others have to do some of this. The answer then has to be, yes, I did suspect this would happen some day. But did I expect a military assault on my home, on my rights, on a woman, a doctor, a 20-year veteran professor of a New York state university, to be held at gunpoint because she loves me? No."

Zidar said that not one member of his investment pool has complained and everyone has received the results they were promised. He said the actions against him might have originated with disgruntled employees who were recently fired, not from investors who felt cheated.

The SEC issued a statement about the charges against Zidar and the others. In part, it reads:

"The Commission announced the filing of a civil action to halt an ongoing fraudulent securities scheme that has raised at least $40 million from investors nationwide. The Commission's complaint alleges that John Wayne Zidar, of Gilbert, Arizona, John Wesley Matthews, of Chandler, Arizona, and Elizabeth Anne Phillips, formerly of Ravensdale, Washington, head the scheme, which is run under the names Oakleaf International, Rosewood International and Meliorations Management Teem [sic]. Since 1998, Zidar, Matthews and Phillips have allegedly offered investors the twin objectives of capital preservation and 120% annual returns on their investment without specifying the means by which these objectives would be accomplished. In fact, they have allegedly used investor funds for purposes that make it virtually impossible for them to deliver the promised returns, including the purchase of houses and cars for themselves, transfers of millions of dollars to offshore bank accounts that they control and payments of 25 percent commissions to salespeople."

Zidar insists that the operation of his investment pool is completely legal and that the SEC is wrong in its claims.

There are no criminal charges against Zidar and the others. The SEC has filed a civil suit and seized as many assets as they can find. The Zidars are also prevented from using any of the money from the fund for their legal defense.

"The orders now read that any money used for anything, including paying for an attorney, will be taken, therefore they're also attempting to leave us defenseless," complained Zidar.

He said the SEC is trying to scare away the investors in the fund, create an environment in which Zidar can no longer conduct his business, and prevent him from defending himself. He said it is also an act of intimidation intended to prevent others from engaging in similar activities.

"It is like throwing a large noose around a herd of animals and just pulling on it until they all die because they can't breathe," said Zidar.

The notice sent to World Community Educational Society members concludes:

"We will not be deterred from our mission of peaceful change and education. Education that teaches people the laws of this land and encourages personal responsibility and honor in all matters. Education that is based on the fundamental principles of a free Republic and the documents and legal structures, which support those fundamental principles. Not a "free democracy," but a free individual in a free Republic, where government is a servant of the people and not the tyrant reigning over them. It seems that as a people, we are choosing to awaken, and to take personal responsibility for our own minds."

The Denver office of the SEC has confirmed that their attorneys, identified only as Mr. Hoerl and Mr. Shea, filed the claim SEC v. JOHN WAYNE ZIDAR, ET AL. Hoerl and Shea were unavailable for comment because they were away at a conference. Notice of the SEC charges states, in part:

"Through this scheme, Zidar, Matthews and Phillips allegedly violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Zidar and Phillips also allegedly violated Sections 5(a) and (c) of the Securities Act of 1933. The Commission's action, filed in federal district court in Seattle, seeks a temporary restraining order and preliminary and permanent injunctions to prevent future violations by the defendants, a freeze of their assets and other relief to recover investor funds. The Commission's complaint also names Meliorations Management Teem, a Turks and Caicos Islands trust, as a relief defendant to obtain any additional investor funds possessed by the trust. The Commission thanks the Office of the United States Attorney for the Western District of Washington for assistance with this action."

David M. Bresnahan is an investigative journalist for

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