Ascher v. Com.

Decision Date13 August 1991
Docket NumberNo. 1011-89-4,1011-89-4
PartiesRochelle Joyce ASCHER v. COMMONWEALTH of Virginia. Record
CourtVirginia Court of Appeals

John P. Flannery, II, Leesburg, for appellant.

John B. Russell, Jr., Sr. Asst. Atty. Gen. (Mary Sue Terry, Atty. Gen., on brief), for appellee.

Present: COLEMAN, KEENAN * and MOON, JJ.

COLEMAN, Judge.

In February of 1987, Rochelle Joyce Ascher was indicted by a Loudoun County grand jury on eleven counts of securities fraud 1 in violation of the Virginia Securities Act, Code § 13.1-501 et seq., occurring from 1984 through 1986. The grand jury later indicted Ascher for conspiracy to commit securities fraud in violation of Code §§ 18.2-22 and 13.1-520(A).

The allegedly fraudulent sales arose out of Ascher's position as a fund-raiser for Lyndon H. LaRouche, Jr., and his political organization, the National Caucus of Labor Committees (NCLC). As a fund-raiser, Ascher solicited contributions and loans from LaRouche political supporters to underwrite LaRouche's political publications and endeavors. She issued promissory notes obligating the LaRouche organizations as evidence of the indebtedness for the loans. After a ten-week jury trial, during which the trial court dismissed three of the charges for improper venue, the jury convicted Ascher on the eight counts of securities fraud and on the conspiracy count. The jury recommended penitentiary sentences totalling eighty-six years. The trial judge suspended certain sentences and ordered that others be served concurrently, resulting in Ascher receiving concurrent penitentiary sentences of ten years to be served and a ten-year suspended sentence.

Testimony from lenders, co-workers, and from Ascher explain her participation in the transactions which led to these securities prosecutions and convictions.

Rochelle Ascher, a college graduate who has almost completed the requirements for a masters degree in education, played a key role in fund-raising for the NCLC. She served as a supervisor of fund-raising, which included personally soliciting loans, training other fund-raisers, and issuing promissory notes. After joining the NCLC in 1973, Ascher began working for NCLC full time in January 1980, when she became head of the phone team in the Baltimore regional office. Ascher solicited loans for several subsidiary companies of the NCLC whose functions were writing, editing, publishing, and mailing political publications. The companies for which Ascher solicited loans were: Caucus Distributors, Inc.; Campaigner Publications, Inc.; Executive Intelligence Review; Fusion Energy Foundation; and Publication & General Management, Inc. Known within the LaRouche organization as "infrastructure loans," the funds were used to support publication costs of the companies and the entire organization's operating expenses, which averaged $600,000 per week. "Infrastructure debt" was kept separate and distinct from the debt created by fund-raising for Lyndon LaRouche's political campaigns. 2

The national headquarters for the NCLC and its operating companies, known as the National Center, moved to Leesburg, Virginia from New York in 1984. Ascher maintained frequent daily telephone contact from Baltimore with her phone team counterparts in the National Center, exchanging names of potential lenders and information on successful fund-raising tactics. The Finance Office of the National Center was responsible for banking the funds, accounting, paying vendors, and tracking and paying debts for the affiliated companies of the NCLC. Ascher communicated frequently with members of the Finance Office, particularly Donald Phau, its director, and William Hintz, whose primary responsibility was to track repayment of the loans and handle complaints.

As head of the phone team in Baltimore, Ascher trained new fund-raisers there and in the National Center. Trainees started as "boilers" who would make cold calls to individuals whose names had usually been obtained through door-to-door and airport fund-raising operations. Ascher helped train the boilers to make "cold hits," which was obtaining small contributions from first-time calls. Boilers were provided scripts, and members of the phone team, including Ascher, would critique their calls and suggest improved techniques. Ascher instructed the boilers to convey a sense of urgency and to ask the potential lender to support a specific organization project. Cold hits were then referred to members of the phone team, such as Ascher, who would attempt to solicit what the fund-raisers knew as "specials," which are loans, contributions, or sales in excess of $5,000.

Fund-raisers, including Ascher, had a uniform method of soliciting loans. They discussed various political issues with the potential lenders before seeking a contribution. If it appeared that the contact would not make a contribution, the fund-raiser would then solicit a loan, usually promising a higher interest rate than banks. Ascher and other fund-raisers told the contacts that the banks were a "bunch of crooks" and "drug money launderers." When a lender would inquire about the loan repayment history of the organization, the standard procedure was to inform the potential lender that his or her money would be completely safe. When a contact committed to make a "special," to avoid any delays or change of mind, a courier was dispatched to receive the money. The lender was issued a promissory note at the promised rate of interest.

As head of the Baltimore region, Ascher also supervised progress toward meeting regional and national quotas, which had been set by the National Executive Committee (NEC) located in Leesburg. The National Center held daily morning and evening briefings to announce the progress toward the quotas, which information was disseminated to the regions throughout the day. Ascher also kept records of each fund-raiser's progress toward individual quotas set by the NEC.

Ascher was also responsible for issuing many of the promissory notes for the loans solicited from the Baltimore office. She retained a copy of each note and sent a copy to the National Center. When the Baltimore Office was not to issue the promissory note for a particular loan, Ascher would execute a loan voucher form which was sent to the Finance Office at the National Center to issue the note. The National Center would issue a blank promissory note signed by an officer of the organization, usually William Hintz, on terms contained in the loan voucher form prepared and submitted by Ascher or from her counterpart in the other regions.

In early 1985, after the National Center had moved to Leesburg, promissory notes were generally issued from the National Center rather than from regional offices. By August 1985, the organization began using letters of indebtedness. The letter of indebtedness contained the terms of the loan, but was written in the form of a letter so as to appear less like a promissory note. Hintz testified that the National Center changed to a letter of indebtedness, and also shortened the term of repayment to eight or nine months, in order to make the loan not have characteristics of a security.

As early as 1984, Ascher became aware that loans were being repaid on a selective basis. She reviewed lists of loans owed to lenders; she knew the weekly budget allotted for repayment of loans was less than the amount owed and that funds did not exist to repay all the lenders in the Baltimore region. Since only a few lenders would be repaid, the Finance Office established a system to prioritize lenders into categories. For example, the "legal" category were lenders who filed lawsuits, had threatened legal action, or had retained an attorney. The "hardship" category included lenders who demanded repayment because they were in financial straits. A third category was politically active and influential people with whom the NCLC wanted to maintain a good reputation.

Ascher regularly contacted the Finance Office about ranking individuals for repayment, and she kept her own ranking of those lenders she considered important. As early as June 1984, Ascher personally received numerous and regular complaints about nonrepayment from lenders. Despite ongoing complaints and daily communication with the finance office at the National Center regarding the organization's inability to repay, Ascher continued to solicit loans as late as November 1986. Although Ascher claimed to have been forthright about the organization's difficulties, others testified that she continued to promise lenders that "we always ... pay back every person," and that for "thirteen years" the organization never had any problem repaying loans. Transcripts of her telephone solicitations made to an undercover investigator during September 1986 confirm that she made these representations. Ascher continued to solicit loans after federal and state search warrants were executed on the organization's headquarters in Leesburg in October 1986.

In 1985, Lyndon LaRouche and his organizations came under scrutiny from various law enforcement agencies in Virginia and elsewhere. Extensive publicity regarding Mr. LaRouche and his organization's dealings appeared in newspapers and news broadcasts in the Leesburg, Loudoun County, and Washington, D.C. areas. In July 1987, two years before her trial, Ascher filed a motion to change venue on the ground that extensive adverse pretrial publicity would make it impossible to seat an impartial jury in Loudoun County. The trial court deferred ruling on the motion before it attempted to seat a jury. During the ensuing months until trial, publicity increased about the case and the LaRouche organization, since, in the interim, Lyndon LaRouche had been tried and convicted in Loudoun County, and was scheduled to be sentenced around the time that Ascher's trial was to begin. Jury selection began on January 23, 1989. It lasted eight days, during which one hundred and...

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