A former Justice Department lawyer spent two years amassing 500 fraudulent credit card accounts, federal prosecutors said yesterday.
Retired Air Force Lt. Col. Eugene Martin Frese, 64, sat in federal court in Baltimore yesterday, fiddling with his gold Harvard Law School class ring and tie, loudly criticizing the government's portrayal of him as a swindler who hoarded a "treasure trove of assets."
Frese was arrested Friday on charges of credit card fraud after a three-month investigation by U.S. postal inspectors. He allegedly opened 21 credit card accounts at USAA Federal Savings Bank, using Social Security numbers of former clients and dead people to accumulate $222,450 worth of credit, prosecutors said at a detention hearing yesterday.
Thirty-five accounts were also set up at other institutions using 26 names under which Frese amassed $326,500 in credit, the government alleged.
American Express is also investigating 23 accounts with unlimited credit in 10 names linked to Frese, according to charging documents.
Despite high credit limits, few of Frese's accounts were very active, said public defender Gary Christopher. He estimated that Frese had run up about $25,000 on the cards, which he used mostly for automated teller machine withdrawals.
Frese received statements at six post office boxes in Maryland, Virginia and Nevada, according to postal inspectors, who are investigating whether other individuals may have been involved in the scheme. Frese faces a maximum of 25 years if convicted.
A search of his companion's home by postal inspectors Friday uncovered credit cards and statements for 500 accounts and several wallets containing fraudulent driver's licenses and other forms of identification, authorities said.
Almost $10,000 in cash and American Express traveler's checks, 500 silver coins, 160 Canadian coins, $38,000 in government bonds, $10,000 worth of gold coins, gold sovereign coins and silver dollars were recovered from his office in the home, prosecutors said yesterday in court.
Postal inspectors said they found 18 loaded handguns, rifles, machetes and knives locked in an office filing cabinet and ammunition for an AK-47 assault rifle. However, Frese told authorities that he had "thrown away" the assault rifle. He is also being investigated for possession of stolen guns.
His brother, Kenneth, a former gun dealer studying to be a minister, testified at the hearing that he owned some of the guns recovered at Frese's home.
Postal inspectors froze more than $100,000 in a Virginia checking account, which they allege Frese opened using false identification.
Frese has spent the past two years living in Edgewater with Roberta E. Dorn, a Justice Department employee. They have known each other for 30 years and have lived together for the past four.
At the hearing, Dorn said she believed Frese had retired from his legal practice and was in business for himself. She said that she was unaware of any illegal activity at her home.
"I believed he was involved in some sort of private business. I was startled to see things when the search was conducted," she said.
Dorn left early Friday for work and was intercepted by officers at the end of her street. Her car was searched at a post office nearby. When told the extent of the allegedly fraudulent dealings, Dorn testified she was afraid that Frese might kill himself.
At the time of his arrest, Frese was "deliberately uncooperative." He smudged his fingerprints, prosecutors said, and it took eight tries to get them. Prosecutors said he "feigned illness" to avoid having his photograph taken.
Dorn said she was unaware of his stockpile of weapons, although she said she found a loaded handgun under his pillow while cleaning a few weeks ago.
Frese takes medication for seasonal depression and has been under the care of a psychiatrist, Dorn said.
"He doesn't like the gloomy days," said Dorn.
Since retiring from private practice in 1994, Frese has done charity work and traveled extensively, Christopher said. He told the court Frese had recently organized an international university in Germany and was planning to travel to Israel soon and purchase a condominium in Jerusalem.
Since 1976, Frese has been in private practice in Washington, Christopher said, and is a member in good standing of the District of Columbia bar. Christopher said Frese lived with his brother in Arlington for several years until moving in with Dorn four years ago.
Pub Date: 2/03/99