JORDAN, MONTANA: About 100 federal agents are surrounding 10 fugitives at a Montana militia compound after capturing two of the group's leaders on charges of writing false checks and money orders. The agents, who feared a reprise of the violent 1992 standoff in Ruby Ridge, Idaho, had waited months before arresting any members of the militant, anti-government "freemen." By Tuesday, they had set up a command post in a community hall nine miles from the group's 960-acre wheat farm in order to negotiate the peaceful surrender of the remaining militia members. The group denies the legitmacy of the government. At its compound, "Justus Township," TIME's Patrick Dawson reports, members appoint their own officials, sign their own documents and issue their own treasury notes. Justus Township was sold in a foreclosure auction in October but the group -- which neighbors claim is heavily armed -- refuses to leave. Dawson says they have allegedly issued thousands of dollars in fake checks and money orders. The two leaders arraigned Tuesday, LeRoy Schweitzer and Daniel E. Peterson, were captured a day earlier in Russet, a desolate town a few miles from the militia compound. Standing before a judge, the pair said they did not recognize the court's authority.