NEW ORLEANS, June 17 — A grandiose plan to invade the small island nation of Dominica, overthrow its Government and set up profitable industries, including a cocaine-processing plant, is unfolding in Federal District Court this week as a prosecutor questions Government witnesses.

The leader of the invasion plan had hoped to leave the east Caribbean island after five years with $3 million to $5 million in profits from various enterprises, according to the testimony of John L. Osburg, special agent with the United States Bureau of Alcohol, Tobacco and Firearms, who helped foil the attempted invasion.

The three defendants and seven other men were arrested late in April near a 19th-century fort north of here as they prepared to embark in a chartered boat, evidently for the island, which is 2,000 miles southeast of New Orleans.  They were seized with 33 firearms, dynamite, a Nazi flag, a rubber raft and a document described as a contract with the former Prime Minister of Dominica, Patrick R. John.

Seven of the group arrested, including the man who says he was the leader, have pleaded guilty to one count of the seven-count Federal indictment.

One Defendant Is K.K.K. Official

The three defendants on trial this week are Stephen D. Black, 27, Imperial Wizard of the Ku Klux Klan, Birmingham, Ala.; Michael S. Norris, 21, of Tuscaloosa, Ala., and Joe B. Hawkins, 37, of Jackson, Miss.

They are charged with conspiracy to prepare for, finance and participate in a military and naval expedition against Dominica, and six other Federal violations involving guns and explosives.  The maximum penalty would be 50 years in prison and a $38,000 fine.

In opening arguments in Federal Distict Court yesterday, Assistant United States Attorney Lindsay A. Larson 3d told the jury that the purpose of the planned “military venture” was “strictly economic.”

Mr. Lindsay said that the leader of the group had made an agreement with former Prime Minister John to help overthrow Prime Minister Mary Eugenia Charles, and put Mr. John back in office in return for being given “run of the island.”

Says He Was Military Adviser

Mr. Black, who presented his own opening arguments in court instead of relying on his lawyer, said, “We were simply going down there to work for the Dominican Army.”  Mr. Black said he had been recruited as a “military adviser” to “secure” Dominica from Communists and that he had been assured by the leader of the group that “the U.S. Government was behind us.”

Mr. Black said, “Certainly we were to be paid for this, $3,000.  None of us are wealthy.”  But he said that he had felt at the same time that “we were doing what was in the best interests of our country.”

The avowed leader of the venture, Michael Perdue of Houston, 32 years old, appeared as a prosecution witness.  He explained to the jurors his bargain with the Government on his plea before he began a description of his plan “to overthrow the Government of Dominica,” which became independent in 1978, and set up a tax-free corporation called Nortic Enterprises.  Nortic Enterprises would deal in lumber, gambling, banking and other lucrative businesses.  Mr. Perdue described extensive and in part, successful efforts to get financial backing for the project from businessmen in Las Vegas, Houston, Memphis, Tenn., Jackson, Miss., and Toronto.

Under cross-examination by a defense lawyer, David Craig, Mr. Perdue said he had lied to sign up mercenaries and to persuade financial backers to help him.

“I gave them the impression we would not be stopped by the United States Government,” he said.  He testified that he had led his associates to believe he had had extensive military experience when, in fact, he was a novice.

“You were a baby mercenary, is that correct?” asked one defense lawyer.  “Yes, sir,” Mr. Perdue replied.
 

Source:  http://www.nytimes.com/1981/06/18/us/dominica-coup-plot-described-to-court.html