The event, however, that pushed the organization into the national spotlight and led to its temporary undoing was the murder of Harold Mansfield Jr., an African-American Persian Gulf War veteran, in a Neptune Beach, FL, parking lot. George Loeb, a COTC Reverend with a history of racist harassment, was arrested with his wife, Barbara, on June 6, 1991, in Poughkeepsie, NY, and charged with the crime.

Barbara Loeb was later sentenced to one year in jail on weapons possession charges; she served at least nine months of her term in a New York State prison. George Loeb was extradited to Florida where he was convicted of first-degree murder on July 29, 1992. The following month, he received a life sentence with no chance of parole for 25 years. In March 1994, the family of the murdered sailor, represented by the Southern Poverty Law Center, filed and subsequently won a lawsuit against COTC seeking $1 million in damages and the dissolution of the organization for vicarious liability in the murder.

Klassen appeared to anticipate this lawsuit, and spent the last years of his life in a frantic attempt to unload COTC assets, like selling the North Carolina compound which housed COTC's headquarters, and divesting himself of responsibility for the organization. In his search for a successor, Klassen went through several candidates, none of whom worked out. Klassen finally settled on Richard McCarty, a telemarketer previously unknown in hate group circles. McCarty moved the group's headquarters to Niceville, FL. Soon after appointing McCarty in the summer of 1993, the 75-year-old Klassen committed suicide by swallowing four bottles of sleeping pills.

Continuing legal problems forced McCarty to dismantle the Niceville-based COTC organization. In two separate incidents in California, police averted potential bombing sprees that were to be directed at Jewish, African-American, and gay institutions. In both cases, the would-be terrorists were closely affiliated with branches of COTC. Leaderless and marked by its association with several violent incidents, COTC appeared defunct.

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