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Prosecutor says scam was �greed� Klamath suspects base defense on lack of claims By DANI DODGE Assistant U.S. Attorney Bob Thomson said two Klamath Falls men accused of a banking scam weren�t needy. They were greedy, buying luxuries like a lakeside cabin and Cadillacs with their bogus check-like securities. "This case is about greed," Thomson said. "Each of these defendants were trying to get something for nothing." But as their trial began in federal court Monday, Donald Harley Carter, 36, and Floyd Bradley Howe, 61, said little. They face nine counts in all of conspiracy and banking fraud for passing off more than $850,000 in "sight drafts," check-like securities supposedly backed by the U.S. Treasury. The two are representing themselves and declined to make an opening statement. They also said they don�t expect to call witnesses or make a closing argument. They face a maximum of 25 years and $250,000 fines on each of the counts against them. The trial is expected to conclude today. The defendants kept their cross-examinations to three questions of each witness: "Please state your name. Do you have any claims against me? Do you know anyone with claims against me?" Outside court, Howe said he and Carter believe if none of the witnesses has any claims against them, then the charges will have to be dropped. Howe said they weren�t doing anything wrong in writing the checks, although they did make a mistake by saying they were issued by the U.S. Treasury. "As individuals we have as much right to create money as the international bankers," Howe said. A Federal Reserve note has nothing backing it � so an individual can do the same thing, he said. "My paper is just as valuable as the paper over there as long as someone accepts it." And accept it they did, according to witnesses, although the car dealerships, title companies and banks quickly learned there was no actual money backing up the sight drafts. According to witnesses and the indictment, Carter passed off four of the bogus drafts in July 1999. The largest was written for $267,801.94 to Aspen Title and Escrow; the smallest was for $5,198 to D.W. Acceptance Corp. The other two were for $220,000 to Jackson County Title (the only draft issued outside Klamath County) and $76,523.47 to First American Title and Escrow. Howe, 61, issued two more drafts in August 1999. The first was for $219,701.65 to West One Auto in Klamath Falls; the second was for $62,034.81 to Western Bank. "It was a large amount of money, but it was run on the U.S. Treasury so we thought it was OK," said Gary Creese, former manager of West One Auto. Creese testified Howe told him that the money would come from an offshore account "through the back door of the Treasury Department." After writing a sight draft, Howe and his friends drove away with five cars, including two Suburbans and two Cadillacs. Then, the dealership was notified the check wasn�t good. West One Auto got the cars back, but Creese lost his job. FBI special agent Donald Macpherson testified that Carter and Howe told him that Carter had learned about issuing sight drafts at a "Redemption" seminar in Spokane in May or June 1999. According to a Web site maintained by a group known as the Militia Watchdog, the Redemption scheme spread quickly in the spring of 1999, and sight drafts were spotted in at least 26 states. Macpherson said Carter told him he had printed up the sight drafts on his computer at work in July 1999. Outside of court, Howe said that he cares little about whether the charges bring a conviction. They would be convicting the wrong guy: FLOYD B. HOWE, the name printed in capital letters on his Social Security card, he maintained. He, on the other hand, is Floyd B. Howe with only the first letter of each name capitalized. Thrusting his Social Security card at a reporter, he explained: "They can prosecute this man here � but I�m not that person." Reach reporter Dani Dodge at 776-4471, or e-mail [email protected] Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.