Madison County Illinois

The Assassin’s Brother

Bank robber John Larry Ray fought the law and the law won.

A version of this story first appeared in Illinois Times (Springfield) Nov. 28, 2007. John Larry Ray died in 2013.

John Ray

The lone robber entered the Farmers Bank of Liberty at 9:10 a.m. on Friday May 30, 1980. He didn’t bark any demands, and he didn’t hand the teller a note. The gun in his left hand spoke for itself. He placed a crumpled plastic bag on the counter. As the teller stuffed cash from four tills into the bag, the bandit walked directly to the office of the executive vice president, as if he had cased the bank in advance. He motioned for the bank officer to go to the vault. “Two minutes,” he said, aiming the pistol at the officer and another bank employee. Informed that the vault had a time-delayed lock, the bandit grabbed the loot from behind the counter and fled.

The robbery took three minutes and netted $15,122. Eyewitnesses pegged the stickup man as about 50 years old, 5 feet 8 inches tall, 180 pounds, gray-haired and potbellied. He was dressed in baggy slacks, a tan jacket, and a floppy fisherman’s hat. Though a nylon-stocking mask concealed the robber’s facial features, the traumatized teller noted his “farmer’s tan.”

Three weeks later, John Larry Ray, the brother of the late James Earl Ray, was arrested for the heist. In the town of Liberty, Ill., Ray’s name still strikes terror in the former bank teller, though a jury ultimately acquitted Ray of that crime in a federal trial in Springfield more than a quarter-century ago. These days, the notorious bank robber lives quietly on College Avenue in Quincy in a small brick house with a rickety front porch. Vacant lots dot the neighborhood. Around the corner, on Martin Luther King Memorial Drive, African-American children play on the sidewalk in the autumn dusk.

John Larry Ray moved here from St. Louis three years ago to care for his sister, Melba, who died last November. The 74-year-old brother of the convicted assassin of the Rev. Martin Luther King Jr. has survived a heart attack and a stroke in recent years. He is also hobbled by diabetes. Complications from the disease forced the partial amputation of both of his feet more than a decade ago. In the spring, he hopes to erect tombstones at a local cemetery for himself and his kin.

He is counting on royalties from a book due out in March to help pay the bills. The forthcoming biography chronicles his criminal career and life in prison. It also purportedly reveals his late brother’s alleged ties to the CIA [see “His last score,” page 15]. Because of contractual obligations, he is currently not speaking to the press.
John Larry Ray’s own story, however, has little to do with international intrigue or espionage. His is a cops-and-robbers tale rooted in western Illinois. Illinois law-enforcement authorities charged John Larry Ray with the May 30, 1980 robbery of the Farmers Bank of Liberty in Liberty, Ill.

He was born in Alton on St. Valentine’s Day 1933, the second son of Lucille and George “Speedy” Ray, a small-time hoodlum. During his youth, the family hightailed it from town to town, his father adopting aliases to stay one step ahead of the law. By 1944, the “Rayns” family had moved north to Knox County, where, Ray says, he applied for his first Social Security number to earn money delivering the Galesburg Register-Mail. James Earl Ray borrowed that number in 1967 to get a job as a dishwasher in Chicago after John Larry Ray helped him escape from the Missouri State Penitentiary.

Those acts would bind the two brothers’ fates. But John Larry Ray had already made more than one wrong turn by then. His first serious scrape with the law came in 1953, when a joyride through the streets of Quincy in a stolen Hudson earned him five to 10. After his release in 1960 from the Menard State Penitentiary, in Chester, Ill., he worked as a bartender and Greyhound bus-depot employee. He dreamed of being a seaman but ended up tending greens at a golf course near Chicago. In 1964 and 1965, he knocked around Florida and the Catskill Mountains, in upstate New York, and collected unemployment benefits in New York City.

By October 1966 he had landed in St. Louis, where, he says, he worked as a painter. In January 1968, he opened the Grapevine tavern on Arsenal Street in South St. Louis with one of his sisters. Months later, the FBI showed up at the Grapevine to question John Larry Ray on the whereabouts of his brother, who was by then wanted for the murder of King. He lied, telling the agents that he hadn’t had any contact with his brother for years. The FBI couldn’t prove his participation in the prison break the previous year, but the bureau had John Larry Ray in its crosshairs, and he would remain a target.

In 1970, federal agents nabbed him for serving as the getaway driver in a bank robbery in St. Peters, Mo. That charge resulted in his only bank-robbery conviction and an 18-year sentence.

In 1978, however, a congressional panel investigating King’s murder — the House Select Committee on Assassinations — accused Ray of four other bank heists, including an October 1969 stickup in rural Illinois. In an odd twist, Ray would be busted for robbing the same financial institution — the Farmers Bank of Liberty — in 1980, a year-and-a-half after the conclusion of the congressional hearings.

The crime stunned the town of Liberty, population 524. Rumors that the robber was camped in a pasture at the edge of town hiked fears. Police-band chatter crackled with mounting reports of suspicious characters in the vicinity. The robbery garnered banner headlines in the Quincy Herald-Whig, and the Liberty Bee-Times, the town’s weekly newspaper, devoted its entire front page to the story. Less than a week later, Liberty would be jolted again. At 8:30 p.m. on Wednesday, June 4, 1980, a farmer reported a suspicious vehicle west of town, according to the Bee-Times. When Liberty Police Chief Albert “Ab” Viar responded to the call, he found a blue 1969 Pontiac Tempest abandoned beside a gravel road, its engine compartment still warm. The car didn’t have license plates, but a registration application in the lower right-hand corner of the windshield bore the signature of James R. LaRue. Viar drove back to the house of the farmer. As the farmer and his spouse talked to the chief, the farmer’s wife saw a light come on inside the Tempest, which was parked about a quarter-mile away.

By the time the police chief got back to that location, the car was heading in his direction. Viar flipped on his squad car’s emergency lights to signal the driver to stop. Instead the driver sped away, and Viar pursued him. The chase ended a half-mile later, when the Tempest spun out on a curve and crashed into a ditch. The driver jumped from the car and escaped on foot into a cornfield. As darkness fell, the police chief radioed for backup. After his deputy arrived, they conducted a search. About 300 feet from where the Tempest had first been spotted, Viar found a yellow satchel containing $10,803 from the bank robbery.

At 8 o’clock the next morning, a county deputy and state police officer reported being fired upon near the bank, prompting another manhunt. Heavily armed local and state cops swarmed the fields and woodlands surrounding the town. That afternoon, authorities discovered an abandoned encampment about a mile from the scene of the car chase. At the site, police found a hole under a tree, leading them to believe that the robber had unearthed the loot, only to have his plans thwarted by the vigilant police chief.

Meanwhile, the Adams County Sheriff’s Department issued a warrant for James R. LaRue, and the Illinois State Police arrested a man with that name in Cicero, Ill., on June 9, 1980. They released the suspect within hours, however, after he informed officers that a wallet containing his identification had been stolen a month earlier. The investigation appeared to have reached a dead end.

But a week later the sheriff’s department charged Ray with the bank robbery on the basis of a left thumbprint found on one of the Tempest’s side-view mirrors. Ray, who matched the general description of the suspect, had vanished months earlier after being released on parole. Within days the FBI entered the case and, weirdly enough, so did an investigator for the defunct congressional committee. At 5:45 p.m. on June 23, 1980, Sgt. Conrad “Pete” Baetz of the Madison County (Ill.) Sheriff’s Department spotted Ray walking along Illinois Route 140 near Alton.

“As I remember it, he was wearing a dark-blue leisure suit,” says Baetz, who now lives in Two Rivers, Wis. “It was also hotter than hell that day.” Baetz, on a shopping trip with his wife, turned his car around and passed the sweaty pedestrian again to confirm his identity. He then called the sheriff’s department from a nearby roadhouse. An on-duty officer arrived promptly to assist Baetz in the arrest. The two deputies frisked Ray and found nothing. Later, a Madison County jailer discovered a .38-caliber revolver among the personal items that Ray was toting in a shopping bag when he was arrested. The bag reportedly also contained women’s nylon hosiery and coin-roll wrappers from the Farmers Bank of Liberty.

Baetz recognized the suspect so readily because they had crossed paths before. He had interviewed Ray in his capacity as a congressional investigator for the HSCA two years earlier. The Madison County officer had taken a leave of absence from his local law-enforcement duties in 1978 to work for the committee, but the career move turned bad when Baetz came under investigation himself. Former FBI informant Oliver Patterson alleged that the then-congressional investigator had directed him to spy on Jerry Ray, the youngest of the three Ray brothers. The informant also said that he gave false testimony, provided to him by Baetz, to the committee. Patterson revealed his illegal activities at a St. Louis press conference organized by attorney Mark Lane, who then represented James Earl Ray.

Though the committee denied any wrongdoing, the press coverage tarnished the reputations of both the HSCA and Baetz. If Baetz feared that his latest brush with fame would stir up questions about his checkered Capitol Hill tenure, he needn’t have worried. The arrest of John Larry Ray grabbed front-page headlines in newspapers in St. Louis, Alton, and Quincy, but none of the accompanying stories mentioned Baetz’s central role in the HSCA scandal two years earlier.

The Adams County sheriff arrived in Alton the next morning by chartered plane and flew Ray back to Quincy, where FBI agents dispatched from Indianapolis waited to interrogate him about the shooting of National Urban League president Vernon Jordan in Fort Wayne, Ind., on May 29, 1980 — the day before the Farmers Bank of Liberty robbery. Though the agents publicly discounted Ray as a suspect in the civil-rights leader’s shooting, their boss took a different tack. In a front-page story that appeared in the St. Louis Post-Dispatch, FBI director William H. Webster emphasized the similarities between the Jordan shooting and the murder of King — including the possibility that money from bank robberies financed the plots.

The FBI chief’s accusations may have been sparked by memories of his early days on the bench. Like Baetz, the nation’s top cop had encountered John Larry Ray previously. As a fledgling federal district judge in St. Louis, Webster had sentenced John Larry Ray to prison for being the wheelman in the 1970 robbery of the Bank of St. Peters (Mo.). In 1978, the HSCA used that single federal conviction as the linchpin for its theory that the Ray brothers were an organized gang of bank robbers. The committee further alleged that James Earl Ray and John Larry Ray robbed the Bank of Alton on July 13, 1967, and used proceeds from that heist to finance James Earl Ray’s travels in the year preceding the King assassination.

To buttress its theory, the committee cited other bank robberies that were carried out in a similar fashion, including the 1970 Bank of St. Peters robbery, for which John Larry Ray was convicted, and the 1969 holdup of the Farmers Bank of Liberty, for which he wasn’t even charged.

“They all went down in essentially the same way,” Baetz says. “We put James Earl Ray in the area on the day the Alton robbery occurred.”

By the time HSCA called him to testify, John Larry Ray was slotted for parole for his 1971 bank-robbery conviction. After he refused to admit involvement in any of the bank robberies, the committee charged him with perjury and federal marshals pulled him out of a halfway house in St. Louis. He spent the next two months in solitary confinement at the federal penitentiary in Marion, Ill., while Justice Department officials tried to decide whether to pursue the charge.

In comments to the press, Ray accused the federal prison system, the FBI, and congressional investigators of conspiring to deny his release. Attorney James Lesar, who represented John Larry Ray before the HSCA hearings, objected vehemently to the relevancy of bringing up bank robberies that took place after King was assassinated. The committee repeatedly overruled the objections. “They pretended they were a judicial proceeding despite the fact that it was a totally one-sided presentation of evidence,” says Lesar, a Washington, D.C., lawyer. “They were the prosecutor, the judge, and the jury, all in one ball.”

Internal Justice Department memos obtained later by Lesar through the Freedom of Information Act confirmed the HSCA had overreached its authority. Justice Department officials ruled that the committee had improperly slapped the perjury charge on John Larry Ray to force James Earl Ray to testify. The department refused to prosecute the case. Back at the St. Louis halfway house from which he had been yanked, John Larry Ray told the Associated Press on Aug. 24, 1978, that “he would testify about a ‘link’ in the assassination if authorities would permit a nationwide television report about improper judicial action that resulted in his conviction of aiding the robbery of a St. Peters, Mo., bank.”

His only co-defendant in the 1971 St. Peters bank-robbery trial had his conviction overturned on a technicality as Ray remained locked up. Now the judge who sentenced him had risen to FBI director. Guilt or innocence mattered little under these circumstances. Nothing would ever shake his belief that he had been set up to take a fall because he was James Earl Ray’s brother.

The pawn had made his move, but it was as if he wasn’t even on the chessboard. Nobody paid attention to his offer. This must have convinced him that the game was rigged. But that doesn’t explain why John Larry Ray chose to lie to the HSCA. Despite the expiration on the statute of limitation and a congressional grant of immunity, Ray denied involvement in James Earl Ray’s escape from the Missouri State Penitentiary in 1967. He has since admitted picking up his brother after the escape near Jefferson City, Mo. In its final report, the HSCA concluded “that the resistance of the Ray brothers to admitting a criminal association among themselves in these minor crimes is based on a frank realization that such an admission might well lead to their implication in the higher crime of assassination.”

When asked to make a closing statement before the HSCA on Dec. 1, 1978, John Larry Ray cast the blame for King’s assassination on his accusers, appealing to Congress to unlock evidence the government had decided to seal until 2027. “The U.S. Department of Justice and the FBI and a federal judge locked up thousands of pages of evidence concerning . . . Martin Luther King, and the Rays and maybe a person who conspired to assassinate him.

“It is my belief that since I have been locked in solitary confinement for 67 days, in three different federal asylums, and [endured] many physical tortures by this government, that they should release this information, and the person who do [sic] not release the information, it seems to me they would be covering up a murder. They would be covering up the murder of Martin Luther King. . . .”

At his arraignment in Adams County on June 25, 1980, Ray displayed no belated signs of contrition. He argued press coverage of “FBI propaganda” made it impossible for him to receive fair treatment in the United States and requested a trial before the United Nations. Six months later, after more contentious court appearances, the state of Illinois washed its hands of John Larry Ray and turned the case over to federal prosecutors. The rest of the courtroom drama would play out in federal district court in Springfield. It would pit an inexperienced public defender against a phalanx of assistant U.S. attorneys.

Ronald Spears, Ray’s court-appointed lawyer, had been in private practice for less than two years when he went to trial in April 1981. He confesses a degree of youthful naïveté then about outside events surrounding the case, but that doesn’t explain his surprise over the unusual developments inside the courtroom. “There were some critical mysteries in the case that I’ve never figured out,” says Spears, who is now a Christian County Circuit Court judge.
The most mysterious element of the case, says Spears, involved a flashlight that the prosecution admitted as evidence. Twenty-six years later it remains a subject of debate. Baetz, the arresting officer who testified at the trial, says that FBI agents belatedly discovered a roll of bills inside the flashlight, money that the former congressional investigator contends came from the bank robbery.

But Spears remembers it differently.

With FBI agents present, he and Ray examined the physical evidence, including the flashlight that had been found in the shopping bag at the time of his arrest. Ray opened the flashlight and peered into the battery chamber and then put the cap back on, according to Spears. Later Ray took Spears aside and asked him to call for an investigation. Ray claimed that he had stashed money he had earned working in Chicago before his arrest in the flashlight and that it had disappeared. Spears informed the court of his client’s allegation and demanded an explanation. “So the prosecutor brings the thing into open court and takes it out of the box,” says Spears. “He opens up the end of it, [and] pulls out several thousand dollars in cash. All of this evidence was in the custody of the FBI. They had already examined it. They obviously would have identified if they found the money in there. Either there was some not very good work done by the crime lab, or somebody took it [the money] and was going to keep it and got caught.”
 

Other evidence may have been flushed down the toilet. Feces collected near the getaway car contained anal hairs, which prompted the state to order Ray to provide samples. He complied. But when Spears later questioned the forensic specialist at the trial, the witness testified that he had thrown away the evidence. “Again, it points to either what could have been a sloppy investigation or worse,” Spears says.

The prosecution relied on the testimony of Charles Reeder, a cellmate of John Larry Ray’s while Ray was jailed in Adams County. He told the jury that Ray had confessed to the crime. Under cross-examination, however, Reeder said that he agreed to testify for the government in exchange for a possible reduction in his 10-year sentence for deviate sexual assault.

The defense countered by calling Oliver Patterson, the former HSCA informant, to the stand, prompting the prosecution to object, so Judge J. Waldo Ackerman cleared the jury from the courtroom to ascertain the relevancy of his testimony. Under oath, Patterson said that when he heard that Baetz had arrested John Larry Ray, he immediately wondered whether the former congressional investigator had tampered with the evidence. Moreover, Patterson told the court, his false testimony before the HSCA — which Baetz allegedly condoned — led to the delay in Ray’s 1978 parole.

In short, Patterson maintained that Baetz had a vendetta against Ray and his family. Not surprisingly, Jerry Ray agreed. The youngest of the Ray brothers testified that the FBI had first tried to pin the Liberty bank heist on him. “When it was shown that I couldn’t have robbed it because I was in Georgia, then they said ‘John Ray robbed it,’ ” says Jerry Ray. “If they can’t get one, then they get the other.”

Ackerman, however, ruled that Patterson’s testimony was irrelevant to the bank-robbery charge.
“I’m sure at that point Patterson liked the publicity he was getting,” Baetz says. “I didn’t even know that he was going to testify, but my guess is he would testify to the fact that there was this vast conspiracy against the Ray family.”

The former congressional investigator blames Mark Lane, James Earl Ray’s attorney, for promulgating that idea. “His way of handling things was to throw out as many allegations as you can, as loud as you can, and see if they will stick,” Baetz says. In this case, however, the job of making things stick fell to federal prosecutors, who failed to place John Larry Ray inside the bank that had been robbed. None of the fingerprints at the bank matched Ray’s, plus none of the witnesses, including the teller, could identify Ray.

Instead, prosecutors used circumstantial evidence against Ray, including the thumbprint on the vehicle involved in the car chase — a week after the robbery. In addition, a ballistic expert testified that a .38-caliber bullet removed from a tree at the site where the getaway car was found on the day of the robbery matched the gun discovered in Ray’s shopping bag after his arrest.

After seven hours of deliberations, the jury found Ray guilty. But the judge threw out the conviction. His decision hinged on a handwritten motion submitted by John Larry Ray when he faced state charges in Adams County. Federal prosecutors introduced his motion as evidence so that the jury could compare it with handwriting on the license-plate-application form for the Pontiac Tempest involved in the car chase. But Ray’s motion included detailed information on his prior bank-robbery conviction, which was inadmissible evidence.

In the second trial, which took place in July 1981, Ray was acquitted by the jury after more than 10 hours of deliberations. John Larry Ray, however, returned to federal penitentiary because he had been convicted in March 1981 for contempt of court for not providing handwriting samples to federal prosecutors. Ray apparently balked at the demand after having already given samples to the state after his arrest the previous year. For his lack of cooperation, he received a three-year sentence. He received additional time for the .38-caliber pistol found among his possessions after his arrest. Ray was paroled in 1987 and disappeared for the next five years. U.S. marshals arrested him for parole violation in St. Louis in 1992. The Federal Bureau of Prisons released him for the last time on July 26, 1993. By that time, Ray had spent more than 25 years of his life in prisons in 13 states from coast to coast.

By virtue of his relationship to his late brother, John Larry Ray will always be associated with one of the most heinous crimes of the 20th century. In many ways he has been cast in a role not entirely of his own creation. His legend is really a collaborative work, a crazy quilt of official sources whose pieces don’t always fit. His side of the story has been largely ignored or discredited. Ray is, after all, a felon, an ex-con with a rap sheet that spans five decades. He is known to have lied to the FBI and Congress. But there is another reason that his version of events has often gone unheeded: Ray has a lifelong speech impediment. Words have failed him. He has literally been misunderstood.

An intent listener can discern his message clearly enough, however, and it hasn’t changed for a very long time. Ray still harbors an unyielding contempt for authority. The world is his prison, and he has made a career of defying those who run the joint.

Under the Radar

East Side player Gary Fears and his diverse business associates are betting that his military aviation business finally takes off. Whether it will fly is still up in the air.

By C.D. Stelzer

First published at focusmidwest.com in May 2010.

 

“It’s interesting that the guys who came here to help move the plane actually were Russian nationals,” says Cheryl Hill, a prosecutor in Marquette, Michigan.

Hill is referring to a gargantuan Soviet military aircraft worth millions of dollars that has been stranded for the better part of the last year at a former U.S. Air Force Strategic Air Command base in the Upper Peninsula of Michigan.

Gary Fears’ Ilyushin IL-78.

The spring thaw has melted the snow that accumulated around the aircraft over the winter, but mysteries surrounding its presence at Sawyer International Airport remain.

A fuel-leaking Cold War relic, the 94-ton behemoth has been the subject of both curiosity and consternation in Marquette since it touched down in July. Almost immediately, five members of the Ilyushin IL-78’s nine-man Ukrainian crew were deported for visa violations.

Hill, the local official charged with interim custody of the plane, recalls that one of the foreign-born aviators dispatched by the U.S. Customs Service to move the plane off the runway told her that he had flown the same aircraft during the Soviet Union’s war in Afghanistan in the 1980s. She mentions the coincidence as an aside, her prosecutorial inquisitiveness piqued more by the plane’s flight plan from last summer.

“I think that the more interesting question is, what were they going to do with it in Pakistan?” Hill says. “Were they running guns? Were they running drugs? Were they running people? You could drive tanks in there.”

The prosecutor’s suspicions raise a litany of other issues regarding accountability and transparency in the increasingly privatized war on terror, including the extent of U.S. military intelligence involvement, the veil of secrecy enveloping de facto covert operations, the purposes of such clandestine actions and who ultimately is profiting from the expansion of the wars now being waged in Afghanistan and Pakistan.

The covert nature of the aircraft’s mission and those involved in carrying it out would never have come to light if not for a dispute over a maintenance bill.

Victor Miller, owner of Air 1 Flight Services of Sherman, Texas, filed suit against Air Support Systems LLC in June 2009, alleging that the company owed more than $70,000 in maintenance fees accrued during the two-anda-half years the plane was mothballed at the North Texas Regional Airport. After the Ukrainian crew took off with the plane the next month, it was grounded in Michigan, as a result of a restraining order, before it could leave U.S. airspace.

The registered owner of the plane is Gary R. Fears, a former Downstate Illinois powerbroker who now resides in South Florida. Fears dismisses the imbroglio over the plane as much ado about nothing.

“The whole thing was a huge misunderstanding,” says the 63-year-old Fears, who maintains his corporate address at his lawyer’s office in St. Louis County, Missouri.

Gary Fears

The leaseholder of the plane is North American Tactical Aviation Inc. (NATA), a corporation with the same Wilmington, Delaware, address as Air Support Systems LLC, a Fears-owned company with one asset: the grounded plane. That the corporations share the same Delaware incorporation address could easily be attributed to coincidence, but bankruptcy records filed on behalf of Air Support Systems in St. Louis last fall provide more details as to who invested money in the aircraft or lent money for its purchase.

The outstanding creditors listed in the filing include a private mercenary group, a shadowy front company in Gibraltar and an Illinois gambling executive with alleged ties to the Chicago mob. On October 23, a judge in Marquette County, Michigan, ruled in Miller’s favor and awarded him the plane as payment for the unpaid debt. To prevent the tanker from being taken, Fears countered by filing for Chapter 11 protection for Air Support Systems on October 28 in federal bankruptcy court in St. Louis.

“That stayed all of the action,” says Hill, the Marquette County prosecutor. On Dec. 17, Fears reversed his legal strategy and had his St. Louis bankruptcy attorney dismiss the case he had filed less than two months earlier. In March, the Michigan court’s ruling was upheld.

The decision is the latest twist in the bizarre legal dispute. The latest Michigan court ruling follows a decision by the Department of Homeland Security to release the plane. Miller could not be reached for comment, but Fears maintains that he is still the legitimate owner.

Buying a foreign military aircraft is not like other business transactions. Before Fears could get his hands on the IL-78, the federal government had to allow its importation. North American Tactical Aviation, the shadowy corporation that leased the plane from Fears after he purchased it, initially obtained permission to bring the plane to the United States. It is also the company involved in the failed effort to fly the plane to Pakistan last summer.

“I’m told that NATA [North American Tactical Aviation] had a contract to take the plane to Pakistan in support of the allied efforts there,” Fears says. He emphasizes that the mission had been officially sanctioned. “We bought the plane from the Ukrainian government. The Air Force wrote a letter in support of the importation of it, saying they thought the plane had potential use in support of U.S. training requirements. The refueling system on that airplane is common to many, many other countries.

“I view it as a logical and good thing to support the [war] effort,” says Fears. “It’s not to say that I agree politically with all efforts. I thought the Iraq war had a noble purpose and was grossly mishandled by the Bush administration, billions of dollars and thousands of American lives wasted. It was as bad as Vietnam in terms of misuse of assets. I view Afghanistan as far more complicated a question than Iraq, and I don’t know what the right answers are there. I’m glad I’m not the guy making the decisions.”

Strange bedfellows

Nevertheless, while the wars rage on, Fears views the purchase of the Ukrainian military aircraft as a pragmatic business choice and sound investment. Though he says that the plane was a one-time deal and that he is not a broker of military hardware, records related to his abortive bankruptcy filing on behalf of Air Support Systems show that his acquisition of the plane was not carried out alone. Fears received venture capital from an international security firm operated by former high-ranking military officials. The records show that Trident Response Group of Dallas sank more than $2.5 million into Air Support Systems for the purchase of “future aircraft” on December 5, 2005. The Federal Aviation Administration issued Air Support Systems a certificate of registration for the IL-78 nine months later.

Clint Bruce

Former Navy SEAL Clint Bruce, a graduate of the U.S. Naval Academy, and businessman C. Dewey Elliott III founded TRG. Bruce is lauded on the Trident website as a past commander of SEAL platoons “engaged in direct support of the Global War on Terror.” Elliott, a fellow Annapolis alum, is listed as having been a “senior consultant with Washington and Boston-based firms where he supported intelligence, systems acquisitions and financial management for DoD [Department of Defense], Fortune 500 and multi-national clients.” The website shows Lt. Col. John B. Skinner III, an active Marine Corps Reserve officer, as TRG’s vice president of operations. The board of directors includes retired Marine Corps Gen. Jack Davis, a former federal agent and state law enforcement officer; and John W. Wroten, a Naval Academy grad, former Marine captain and retired vice president of Electronic Data Systems.

The involvement of former Navy personnel in backing the purchase of a military aircraft seems normal enough, but the other creditors come from widely divergent backgrounds.

Russell DeLeon

For instance, Headlands Ltd., a front company in Gibraltar, has more than $1.1 million tied up in the IL-78, according to the bankruptcy filing, By no small coincidence, Headlands’ address is in the same location as a mail drop for Russell De Leon. He is the husband of Ruth Parasol, the founder of PartyGaming, an online gambling company that has employed Fears’ lobbying services. Together De Leon and Parasol own 40 percent of PartyGaming. They reside in Gibraltar.

Parasol, who grew up in affluent Marin County, Calif., founded PartyGaming with profits from her family’s pornography business. Her father, Richard Parasol, a Holocaust survivor and former Israeli Army officer, opened a string of massage parlors in San Francisco’s Tenderloin district in the early 1970s. After graduating from law school, Ruth Parasol joined the family business, which by then was operating phone sex chat lines. The father and daughter then diversified, investing in Internet Entertainment Group Ltd., an online pornography company. In 1997 Ruth Parasol shifted her interests exclusively to online gambling, which proved even more profitable than the sex trade.

Robert Kjellander

Robert Kjellander

But after President George W. Bush signed a law banning online gambling in 2006, Internet gaming profits took a nosedive. In response, PartyGaming hired Avatar Enterprises Inc., Fears’ lobbying firm. Lobbying records show that Avatar used influential Republican and Democratic lobbyists to work on PartyGaming’s efforts to lift the ban. The Republican, Robert Kjellander, an Illinois lobbyist and former GOP national treasurer, is a close confidante of former White House adviser Karl Rove. The Democrat, Steven Schwadron, is a former chief of staff for Rep. Bill Delahunt of Massachusetts.

Congressional lobbying records show Schwadron represented Avatar on two legislative issues: Internet gaming and “legislation relating to wildfire prevention and suppression.”

Aside from being a midair refueling tanker, the IL-78 is touted by both Fears and NATA as a superb firefighting aircraft.

Fears says there is nothing mysterious about his business relationship with either Kjellander or Schwadron. “I knew Bob (Kjellander) from Springfield years ago, [and] Steve works for a law firm I use in D.C.,” says Fears. “Neither one of them are partners in Avatar. If someone is giving you advice … on the project, then better to be safe than sorry — you register them as having worked on that as well.”

The other major creditor of Air Support Systems is Chicago businessman Kevin Flynn, a casino executive and former gaming partner of Fears. The bankruptcy filing shows that in April 2008 Flynn secured a $1.3 million interest in the IL-78. Fears and Flynn crossed paths years earlier, when Flynn operated the Blue Chip Casino in Indiana. The two were later involved in a failed Indian casino development in California.

In 2001, the Illinois Gaming Board yanked Flynn’s long-dormant state license because two of his investors allegedly had ties to the Chicago mob.

At the time of the revocation, Flynn and his father, Donald Flynn, a former executive of Waste Management Inc., were seeking to transfer their existing gaming license from the shuttered Silver Eagle casino in East Dubuque, Illinois, so they could operate the proposed Emerald Casino in Rosemont, a Chicago suburb. Investors in the casino deal included a lineup of heavy hitters, including associates of Chicago Mayor Richard Daley.

But the state gaming board pulled the Flynns’ license because investors Nick Boscarino and Joseph Salamone were alleged to have ties to organized crime. Salamone, an Oak Park grocer, is the brother of Vito Salamone, a mob soldier who had originally been listed as a casino shareholder. Boscarino is a former Teamster official with close ties to Rosemont Mayor Donald E. Stephens. Boscarino and Stephens once owned a forklift rental company along with organized crime figure William Daddano Jr. The gaming board also cited Emerald for hiring a construction company owned by the wife of Peter M. DiFronzo, the brother of Chicago mob boss John “No Nose” DiFronzo.

The gaming board concluded that Flynn had displayed a “contentious pattern … of providing misleading information to the board and its staff.” “Other than his disagreement with the Illinois Gaming Board,” says Fears, “I don’t know any infraction of any kind that Kevin [Flynn] has ever been involved in.”

Grounded

The story of how Fears and his odd cast of creditors ended up with a grounded Ukrainian behemoth leaking fuel on the tarmac of an isolated airstrip in the Upper Peninsula of Michigan began four years ago.

The IL-78, which was formerly owned by the Ukrainian Air Force, departed Kiev on May 23, 2006, according to flight records. It refueled in Reykjavik, Iceland, before landing the next day at the North Texas Regional Airport, formerly Perrin Air Force Base, in Sherman, Texas. Tactical Air Defense Services, a private military-related start-up company formed by Fears, ran the operational arm of its enterprise at the airport, says retired U.S. Air Force Gen. Charles Searock.

“It was, at the time, the location of a training school wherein we were going to train foreign pilots,” says Searock, a seasoned combat pilot who flew more than 150 B-52 missions during the Vietnam War. The principal officers of TADS, Victor Miller and Mark Daniels, had signed up Searock to oversee the International Tactical Training Center, an ambitious program aimed at providing flight training for NATO pilots and others. Miller also owned and operated Air 1 Flight Services, an aviation maintenance service, at the same airport.

Neither Miller or Daniels could be reached for comment, but a lawsuit filed by the two men last year in Palm Beach County (Florida) Circuit Court provides a glimpse of what apparently transpired.

In March 2005, according to the suit, Fears and a group of Florida investors approached Miller and Daniels to offer financing for their company AeroGroup Inc., a Utah-incorporated military flight training contractor. At that time, AeroGroup had a pending contract to buy the IL-78 and other foreign military aircraft from NATA.

Fears and the other investors claimed that they had obtained control of a publicly traded Nevada mining company, Natalma Industries Inc., and intended to change its name to Tactical Air Defense Services Inc. The intended purpose of the newly formed entity was to raise tens of millions of dollars to bankroll the purchase of assets on behalf of AeroGroup, specifically to buy the IL-78, according to the lawsuit. Toward these ends, Fears solicited start-up capital from Jeff Horan of JT Hanco, according to the lawsuit.

However, the suit claims, instead of backing AeroGroup Fears diverted funds to set up Air Support Systems, which then bought the IL-78 for itself. In Air Support’s 2009 bankruptcy filing, Horan’s name is listed with Trident Response Group, the Dallas-based security firm, as having invested more than $2.5 million in the IL-78.

Miller and Daniels further alleged that when TADS purchased AeroGroup’s assets in 2006 the Florida investors were still contending that tens of millions of dollars would soon be available. A TADS prospectus states that the company was angling to team up with an unnamed competitor [NATA] to provide combat and midair refueling training with the IL-78 and other foreign aircraft. “We have a good chance of being awarded the contract,” the TADS document says.

But the deal never materialized.

“This whole thing was predicated on Air Force contracts that were being negotiated by Mr. Mark Daniels,” says Searock. The contracts, however, were never finalized. As a result, “when they went public with TADS it did not generate the income or the investors as they anticipated,” Searock says.

From Searock’s perspective, everything seemed to be on the level. “We would meet quarterly, sometimes more often, with Mr. Fears and the guys from Florida,” he recalls. “We met in Florida. We met a couple times in Dallas, as he was passing through, and a couple times he came to Sherman. I had no problem with him. We were involved in a lot of different things, including the tanker. There was no reason for me to suspect that these guys weren’t on the up-and-up, if they poured $5 or $6 million into getting this airplane [the IL-78] and having it totally refurbished and delivered. That was an expensive scheme, if it was a scheme.”

But Searock became disenchanted with his employers after he says he shelled out his own cash to cover operating expenses and wasn’t reimbursed. He resigned from his position at the end of 2006 and sued TADS and all of the principal players, including Fears, for back pay.

Miller and Daniels dropped their Florida lawsuit in April 2009 after reaching a settlement agreement with Fears and other investors. As owner of Air 1 Flight Services, however, Miller placed a lien for unpaid service costs on the IL-78 in Texas in June 2009.

Shortly before noon on July 17, 2009, a nine-member Ukrainian crew hired by NATA boarded the IL-78 and took off from North Texas Regional Airport. The flight plan called for the craft to refuel at Wittman Regional Airport, in Oshkosh, Wis., before leaving U.S. airspace and heading to Pakistan. Alerted to the plane’s departure, Miller filed a restraining order, and the plane was diverted to Sawyer International Airport, in Gwinn, Mich., where it has been stranded ever since as a result of litigation.

Despite the Michigan court ruling that favors Miller’s cause, Fears doesn’t believe that the lawsuit has any more validity than the earlier case filed in Florida that Miller and his partner chose not to pursue.

“Air Support Systems owns the plane. It’s registered with the FAA,” says Fears. “The whole thing was a huge misunderstanding and blown out of proportion by the press. Victor Miller and those guys checked with the FAA, found where the plane was at and called the local authorities and said, ‘They have left in violation of a court order.’” But Fears says there’s one problem with that allegation: “ NATA was never served with that court order.”

Fears says Miller’s aviation firm, Air 1 Flight Services, has been out of business for two years. “I can show you the agreement that Victor Miller signed and the release on the lien that shows those bills’ being paid,” says Fears. “It was a phony claim by a company that didn’t exist.

“This is a military aircraft — and it is going over to support the U.S. Air Force allied efforts over there [Afghanistan-Pakistan].”

In 1968, as a young man, Fears stumped for Democratic presidential candidate U.S. Sen. Eugene McCarthy of Wisconsin, who campaigned against the Vietnam War. Today, more than four decades later, he appears comfortable with the concept of profiting from warfare. When asked about his role as a modern day privateer, he paraphrases President George W. Bush’s first secretary of defense: “I think maybe it was [Donald] Rumsfeld who said, ‘If it’s not firing a gun, we should look at privatizing it.’”

Asked whether his activities are somehow involved with covert CIA operations, Fears laughs. “Not that I’m aware of,” he says. “I wish there was something that exciting to all this stuff that I was a CIA guy, but that’s not the case.”

This special report was funded by a grant from the Press Club of Metropolitan St. Louis.