The Associated Press

BILLINGS, Mont. - Chained hand and foot, two militant anti-government ''freemen'' shouted down a federal magistrate in court yesterday, yelling that their arraignment was a ''sham proceeding.''

Brought into the heavily guarded federal courtroom, LeRoy Schweitzer and Daniel Peterson Jr. immediately began shouting objections and protests to everything said by the magistrate or U.S. attorney.

''I don't have to listen to the court,'' Peterson yelled.

''I object to any arraignment,'' LeRoy Schweitzer shouted. ''This court lacks jurisdiction. You're without power to go on.''

The judge finally postponed the arraignment of Schweitzer and Peterson Jr., who are charged with threatening public officials, conspiracy and bank, financial and mail fraud.

''That's justice, folks,'' Peterson yelled as he was led away.

The arraignment will occur when arrangements are made so the men cannot disrupt the proceedings, such as putting them in a separate courtroom and allowing them to watch the proceedings on video, officials said.

Meanwhile, federal agents moved in closer to the ''freemen's'' remote farm compound, working to persuade other fugitives to surrender peacefully and clearly trying to avoid another debacle like the Ruby Ridge, Idaho, standoff.

U.S. Attorney Sherry Matteucci said they didn't want to endanger anyone's safety, and asked that the remaining people turn themselves in.

''We intend you no harm,'' Matteucci said. ''Our goal is for you to come in peacefully and I promise you that if you do you will be safe.''

There are women and children at the farm, Matteucci said.

Schweitzer, 57, and Peterson, 53, were arrested Monday and charged along with 10 others in schemes involving $19.5 million in fraudulent checks and money orders.

Schweitzer, Peterson and others also face state charges of criminal syndicalism € the advocacy of violence for political aims.

They also are accused of conspiracy for allegely instructing others how to issue bogus drafts.

About 800 people from at least 30 states have paid to attend ''classes'' on using phony documents, said prosecutors, who estimated losses to banks, government and businesses at more than $1.8 million.

The indictment also accused the men of threatening to kidnap and murder a U.S. District judge in Billings.

The freemen group denies the legitimacy of the government.

Members call their compound, a cluster of houses and other buildings on a 960-acre wheat farm, ''Justus Township'' and insist they have their own laws and their own courts.

Neighbors say they are heavily armed.

The farm 30 miles northwest of Jordan was sold at a foreclosure auction in October, and the new owners have grown increasingly impatient to take possession as spring planting time approaches.

but no firm boundary was set around the freeman compound. Six people left the compound Monday; they were not named in arrest warrants and were allowed to go on their way.

Meanwhile, a television report said an FBI raid at a Los Angeles County hotel Tuesday was linked to the investigation in Montana. John Hoos, an FBI spokesman in Los Angeles, would neither confirm nor deny the KCBS-TV report that a search warrant was issued and a man detained in Lancaster, Calif.