By David M. Bresnahan
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© 2000 WorldNetDaily.com
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 WorldNetDaily.com
David M. Bresnahan News Archive Page
WorldNetDaily.com
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