Former Associate Willis Carto Illegally Diverted Millions, Judge Says
November 18, 1996
A California Superior Court has ordered former associates of the Institute for Historical Review (IHR) to pay the controversial history research center and its parent corporation $6.43 million, plus several years' interest.
In a just-concluded court case, Judge Runston G. Maino declared that former IHR associate Willis Carto and other co-defendants illegally diverted millions of dollars from Legion for the Survival of Freedom, Inc. (LSF), parent corporation of the Institute. The civil case (No. N64584) came before California Superior Court, Dept. 11, in Vista, north San Diego County, California. The non-jury trial began October 31 and concluded November 12.
In his November 14 “Statement of Decision,” Judge Maino found that $7.5 million from the estate of Jean Farrel, an American-born woman who died in Switzerland in 1984, belonged to plaintiff IHR/LSF, and that “all defendants have substantially interfered with the plaintiff’s property rights as to this $7.5 million.”
The defendants “were grossly reckless and grossly negligent in their handling of the Farrel estate,” and their “interference was intentional and without any justification,” Judge Maino declared.
Willis A. Carto, 70, a resident of Escondido (Calif.), is the principal defendant in the case. He is founder and chief executive officer of Liberty Lobby, a Washington, DC-based “populist” institution that publishes a nationally distributed tabloid weekly, The Spotlight (Tel. 202-546 5611). His relationship with the IHR was terminated in September 1993 after he attempted drastically to change the Journal’s editorial direction.
Other co-defendants in the case are Carto’s wife (Elisabeth), Henry Fischer, Liberty Lobby, Vibet corporation, and Lewis and LaVonne Furr of Hot Springs, Arkansas.
Defendants Carto, Furr and Fischer were ordered to pay $6.43 million, with interest since January 1991, and defendant Liberty Lobby was ordered to pay $2.65 million, with interest from January 1993. Judge Maino allowed a deduction of $1.07 million in “reasonable, necessary and provable” costs incurred by defendants in securing Farrel estate assets.
Rejecting all the defense arguments, Judge Maino ordered the defendants to refrain from transferring any LSF corporate assets or records, and to refrain from claiming to represent themselves as LSF corporate officials. He also ruled that IHR/LSF is entitled to costs in the case.
Given Carto’s record of deceit and hiding money, collecting the award will be difficult, predicts LSF President Greg Raven. Carto is expected to appeal the Court’s decision, and otherwise stubbornly resist.
Institute for Historical Review, a “revisionist history” think tank with offices in Costa Mesa, is often criticized for publishing books and articles contending that numerous World War II Holocaust claims are exaggerated or untrue. Since 1980 it has published the scholarly Journal of Historical Review.
In an eight-page letter of November 13 to all the attorneys in the case, Judge Maino evaluated evidence presented in the trial. Along with his Statement of Decision, this letter is a complete vindication of the Institute’s position throughout this legal dispute, says IHR Director Mark Weber.
Judge Maino was scathing in his criticisms of Willis Carto. “I did not find him to be a witness who can be relied upon,” Maino wrote. “His demeanor when he testified was evasive and argumentative.”
"I found that much of his [Carto’s] testimony made no sense; much of his testimony in court was different from his previous testimony; much of his testimony was contradicted by other witnesses or by documents. By the end of the trial I was of the opinion that Mr. Carto lacked candor, lacked memory, and lacked the ability to be forthright about what he did honestly remember.”
"Mr. Carto intentionally lied to the Furrs and other actual and purported members of the Board of Directors of the Legion so nobody would know of his illegal acts,” the Judge also declared.
Carto’s “entire attitude” during the trial, he wrote, was “one of arrogance, deceit, evasiveness, and convenient memory.”
Judge Maino criticized LaVonne and Lewis Furr for their actions as LSF directors and officers until September 1993, when they resigned. Lewis Furr acted “with gross negligence and with a wanton recklessness toward his obligations as a director,” the Judge wrote. LaVonne Furr “allowed Mr. Carto, who was not a Director, to draft minutes of the Board of Directors and then to backdate those minutes. She signed her name to false minutes and resolutions.”
"In brief,” wrote Judge Maino, “Mrs. Furr completely abandoned her obligations as a Director of the Legion. She allowed herself to become a pawn of Mr. Carto and allowed him to dispose of Legion assets contrary to her obligations as a Director and contrary to the law.”
Referring to Carto’s heated arguments in the spring and summer of 1993 with the Journal staff over editorial direction, and of his effort to replace Weber as editor, Judge Maino declared that Carto “tried to direct the educational direction of the Legion [IHR] by issuing orders to staff and by threatening to fire them. Mr. Carto had no legal right to do any of these things.”
Representing Carto in this case has been Newport Beach attorney Randall Waier (Tel. 714-545 6060). Representing co-defendant Liberty Lobby is its attorney, Mark Lane. (In 1978 Lane served as attorney and spokesman for Jonestown cult community leader Jim Jones.) Representing plaintiff LSF are Century City attorneys Jacques Beugelmans and Thomas Musselman.
Carto’s association with IHR/LSF was terminated by the LSF Board of Directors in September 1993. Since then, he has refused to turn over corporate assets or records to the lawful officers and directors, and has waged a smear campaign in The Spotlight against the Institute and persons associated with it. Carto insists that the Anti-Defamation League (ADL) and the Church of Scientology are behind his troubles, and that the IHR has been taken over and is now controlled by Zionists and agents of Israel and the CIA.
Carto and Fischer have also been under criminal investigation for embezzlement by the Costa Mesa police. As part of this investigation, Costa Mesa and San Diego police raided the Carto and Fischer residences in north San Diego county on March 22, 1995, seizing a large quantity of documentary evidence.
Fischer has left the United States and is now living in Europe. In March 1976 he fled from Australia after making off with $500,000 as an intermediary between Iraqi officials and representatives of the Australian Labor Party.