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Question 10 (c)

          Please state whether, to the best of your knowledge and
belief, there are any pending United States or state or local
governmental investigations regarding possible criminal law
violations by a Scientology-related organization or by any
individual alleged to have been acting under the direction of (as
agent or otherwise), or in conjunction with, any such organization.
For purposes of this question, please include any information
relating to any Class V Church or Mission without regard to whether
such Church or Mission is required to be listed in your response to
question 1. Please include any pending criminal charges (and/or
any pending court action including relevant docket number(s)
against such entity or individual. Include in the description the
investigating agency and any knowledge and/or documents known by
you, or in your possession, or known by a Scientology-related
organization or in the possession of such an organization regarding
the investigation (e.g., what the allegations are and the date the
acts were allegedly committed). In addition, please list all
positions held by the individual listed in response to this
question in any Scientology-related organizations at the present
time and at the time the activity in question allegedly occurred.

          There are no known pending governmental investigations
regarding possible criminal law violations by any
Scientology-related organizations or by any individual alleged to
have been acting under the direction of (as agent or otherwise), or
in conjunction with, any such organization.

*   *   *   *   *

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Question 10 (d)

          d. Please provide a list of all civil or criminal litigation
commenced on or after January 1, 1980 in which it is alleged that
any Scientology-related organization (as that definition has been
modified in c. above) or any individual alleged to have been
acting under the direction of (as agent or otherwise), or in
conjunction with, any such organization, has violated any criminal
law or has committed an intentional tort. The list should contain
parties' names, the docket number(s) of the litigation, the court
in which the matter is or was pending, a short description of all
claims (and any counterclaims) by the parties, including any
additional facts you believe would be relevant to allow us to
understand the bases of the suit, and the status of the action.
The list need not contain litigation in which the Commissioner
of Internal Revenue is a named party.

Background

         Although only litigation that commenced on or after January 1,
1980 has been requested, background information is necessary to put
those cases in context. In the 30 years prior to 1980 there were
only a handful of alleged intentional tort cases in the United
States. These were principally cases involving a disgruntled
former member wishing a refund of his or her donations, and who
included tort causes of action as a litigation tactic. Such cases
were typically dismissed without a trial or settled for a refund of
the donations made.

        The response to Question 3 (d) describes in detail how during
the 1970s the Guardian's Office ("GO") acted as an autonomous
organization unchecked and unsupervised by the ecclesiastical
management of the Church. GO staff carried out illegal programs,
such as the infiltration of government offices for which eleven
members of the GO were prosecuted and convicted. There were also
instances in which GO staff used unscrupulous means to deal with
people they perceived as enemies of the Church -- means that were
completely against Scientology tenets and policy.

      Although these activities involved a very small number of
Guardian's Office staff members operating autonomously in violation
of Church policy and the law, their actions provided ammunition for
those who would attack the Church and damaged the Church's
credibility with courts and the government. The GO carried out
several years of secretive, questionable and often illegal activities
before they were exposed and stopped. Much of this was
recorded in documents that were seized in FBI raids on GO offices
and made publicly available during the criminal prosecutions of GO
members. The Commodore's Messenger Organization

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investigated and disbanded the GO in the early 1980s, dismissing a
large number of GO members from Church staff along with a few GO
sympathizers in Church management.

         The GO documents and the activities that they revealed, along
with a small group of rabid apostates, came to the attention of
Boston personal injury attorney Michael Flynn, who concluded that
this combination made the Church an easy litigation target in cases
which he hoped to position for large monetary settlements.

Michael Flynn

          Flynn, whose practice had theretofore centered on medical
malpractice, launched his litigation assault on the Church of
Scientology in 1979. His formula, which he repeated in all of the
cases he brought, was to: (1) locate someone who had left the
Church, had been purged or who could be induced to leave the
Church; (2) convince the person to file "cookie-cutter" fraud and
emotional distress claims; and (3) commence an action through an
inflammatory complaint, relying on documents from the Guardian's
Office to give an air of false credibility to the claims.

           Flynn, however, did not sue the GO; instead, his targets were
Churches of Scientology generally and L. Ron Hubbard. As part of
his design, Flynn enlisted the aid of ousted GO sympathizers and
former GO members as witnesses, thus enabling him to orchestrate a
highly prejudicial portrayal of Scientology for judges and juries
and for the media.

           On a separate front, Flynn set out to create broader problems
for the Church in the hope both of spreading Church resources thin
and imparting a false air of credence to his civil claims. This he
accomplished by instigating governmental investigations and attacks
on the Church, often through IRS personnel who were more than
willing to cooperate.

The Van Schaick Action

           Flynn's first step was to file a class action lawsuit on
December 13, 1979, in the United States District Court for the
District of Massachusetts. Van Schaick v. Church of Scientology of
California, et al.
. No. 79-2491-G. In that action, Van Schaick,
purporting to act as a supposed class representative, alleged an
array of torts and sought $200 million in damages. However, no
class certification was ever pursued by Flynn. Instead, he used
the lurid allegations and huge prayer of the Van Schaick complaint
as a tool for soliciting additional clients to sue the

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Church. Ultimately, Flynn recruited 28 plaintiffs to file
virtually identical actions in various jurisdictions.

Flynn Associates Management Corporation

           In 1980, Flynn created a corporate entity to promote his
burgeoning business of suing the Church. Flynn Associates
Management Corporation ("FAMCO") was formed, in the words of a
FAMCO document, to promote four basic goals:

1. Closing Scientology organizations (Churches)
2. Adverse media
3. Adverse public reaction
4. Federal and state attacks (on religion)

           FAMCO was merely a front designed to generate money to finance
Flynn's litigation against the Church. A "get rich quick" scheme
outlined in one FAMCO document actually promised FAMCO "investors"
between $2 and $4 for every $1 invested in FAMCO shares. FAMCO was
essentially a franchising scheme through which Flynn solicited
co-counsel in various other jurisdictions to join in the Church
litigation through a fee-splitting system. Flynn's plan was ". .
. to position ourselves such that to fight us would be cost
ineffective." He forecast "One thousand lawsuits (against the
Church of Scientology) . . . by the end of 1981." Flynn provided
attorneys with "turn-key" lawsuits. He promised other attorneys
that, "We provide the clients, the damages, the pleadings, the
memoranda, the documents, the witnesses and virtually everything
required for an instantaneous trial with little or no necessity for
discovery."

Flynn's Probate Gambit

           A particularly outrageous tactic employed by Flynn was his
attempt to steal Mr. Hubbard's estate by inducing Mr. Hubbard's
estranged son, Ronald DeWolfe, to bring a probate action in
November 1982, falsely alleging that Mr. Hubbard was missing and
that DeWolfe should be appointed to control the estate. At the
same time, of course, Flynn was representing a group of former
Scientologists who had named Mr. Hubbard as a defendant in civil
suits against the Church, alleging that Mr. Hubbard controlled the
Church as its managing agent. Flynn thus achieved the unique
distinction of going into one court room to argue that Mr. Hubbard
controlled the day-to-day operations of the Church through a
constant stream of orders to Mr. Miscavige, and then crossing the
hall to another court room to argue that Mr. Hubbard was ill and
dying and that he was being manipulated by his close advisors,
especially Mr. Miscavige. By being willing to speak out of both
sides of

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his mouth, Flynn was seeking to get rich by trying to gain control
of the very estate he was simultaneously seeking to plunder./1

           After Flynn's probate action was dismissed on summary judgment
in June of 1983, Flynn shifted gears and announced that his "real"
purpose in bringing the probate action had been to force Mr.
Hubbard out of seclusion so he could be served in Flynn's other
cases.

           One of Flynn's clients, Paulette Cooper, graphically described
in an affidavit how Flynn detailed to her his strategy to "quickly
and easily win" cases by "conducting an attack against Scientology
founder L. Ron Hubbard" by naming him as a defendant in her pending
lawsuits. Flynn specifically told Cooper that he believed that
"Hubbard would never appear" in those suits because "by
approximately 1979, Mr. Hubbard had severed his ties with the
Church." Flynn boasted that such a ploy would result in quick money
judgments because the litigation could be "quickly terminated,
either by obtaining a default judgment against Mr. Hubbard," or by
forcing "settle[ment] in order to protect Mr. Hubbard." Cooper
further affirmed that Flynn filed sworn statements by Cooper in her
cases alleging Mr. Hubbard's control when Cooper lacked any
evidence whatsoever of the claim, "solely for strategic reasons in
pursuit of default judgment."

Government Support for the Flynn Campaign

           As noted above, Flynn obtained government assistance to lend
credence and momentum to his attacks and to bring additional
pressure on the Church. Tactics, strategies and the goal of the
destruction of the Scientology religion were shared and carried out
by Flynn in coordination with some parts of the IRS and Department
of Justice. The clearest examples of this collusion were in the
fall and winter of 1984.

           In August of 1984, in civil litigation between churches of
Scientology and the IRS and other federal government agencies that
had been in progress for some years, the government worked with
Flynn in importing one of Flynn's principal tactics into the
Church's government litigation, namely seeking the deposition of L.
Ron Hubbard as managing agent of the Church and then seeking
dismissal or default as


1/ It was during that same time period that Charles Rumph of
the IRS National Office told Mr. Miscavige that he lacked
credibility because he was an "automaton" who only did and said
what L. Ron Hubbard told him to do and say.

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a sanction if Mr. Hubbard failed to appear. The evidence used to
support the government's motions to compel those depositions were
declarations by individuals who were clients of or had been
witnesses for Flynn. Simultaneously, the government launched an
"unclean hands” defense in these same suits based on allegations
and claims that mirrored those that Flynn had asserted in his
redundant lawsuits nationwide.

           Two of the government's principal declarants were Flynn's
client Laurel Sullivan and Flynn witness Dede Reisdorf. Sullivan
had been removed from her position and later left the Church
because she conspired with the GO to place GO members who had
committed crimes in positions of corporate authority within the
Church. She was a loser in the purge. Flynn provided her to the
IRS who used her as a government witness represented by DOJ
attorneys in Flynn litigation. Dede Reisdorf was also a GO
sympathizer who was removed from her post in 1981 when she tried to
block the investigation in the GO.

           In March of 1985, based on the declarations of Sullivan and
Reisdorf, Judge Joyce Hens Greene ordered the Church to produce Mr.
Hubbard for deposition or face dismissal of a civil suit against
the government which was in the process of exposing 20 years of
false reports and harassment against Scientology and
Scientologists. Unable to comply with the order as Mr. Hubbard was
not running the Church or even accessible to anyone in the Church,
the Church's suit was dismissed in April of 1985 as a discovery
sanction.

           A few courts saw through the charade and refused to order Mr.
Hubbard's deposition. One such Judge was District Judge Marianna
R. Pfaelzer, who, on January 24, 1986, just hours before Mr.
Hubbard's passing, refused to order Mr. Hubbard's deposition. In
her ruling, Judge Pfaelzer held that, while Mr. Hubbard was
"accorded reverence and respect by Scientologists," he was not the
managing agent of the Church corporations.

IRS CID Support of Flynn

           It was during this same period that the IRS Criminal
Investigation Division in Los Angeles commenced a criminal
investigation of L. Ron Hubbard, David Miscavige and various
churches of Scientology and other Scientologists. According to the
testimony of CID Branch Chief Phillip Xanthos, the impetus for the
investigation was a newspaper article detailing allegations made by
Flynn and a number of his witnesses and clients. In fact, the
majority of the individuals who were interviewed and used as
informants by the CID in their investigation were from Flynn's
stable of

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witnesses and clients, among them Gerry Armstrong. In a late 1984
police-authorized video tape surveillance, Armstrong -- a Sullivan
ally who had made several attempts to join the GO's intelligence
office -- was recorded plotting a take-over of the Church. The
plan included planting phony documents that would then be seized in
a CID raid, the filing of a new lawsuit by Flynn which was designed
to wrest control of the Church from its legitimate leaders and to
set up the sexual compromise and blackmail of a senior
Scientologist.

           Just as Flynn expressed his goal of destroying the Church in
his original planning papers, in the Special Agents report prepared
at the end of the CID investigation, the agents expressed the same
aim -- "the final halt" and the "ultimate disintegration" of the
Church of Scientology.

Resolution of Flynn Cases:

           Between 1980 and 1986, Flynn was either counsel of record, of
counsel or coordinating counsel on 40 virtually identical lawsuits
against the Church. Flynn's plan to incite 1,000 lawsuits never
came to fruition, and his plan to break the Church financially,
failed. By 1986, only one of Flynn's cases had gone to trial.
That case, Stifler v. Church of Scientology of Boston and Church of
Scientology of California
, involved an altercation between Stifler
and a Church disseminator in which Stifler claimed injuries.2/ He
found his way to Michael Flynn and filed suit, alleging various
tortious conduct on the part of the Church and sought $4,250,000 in
damages. Flynn took the case to trial and Stifler was awarded the
amount of his medical bills ($979) in a judgment against the
individual Church member. There was no judgment or damages against
either of the Churches.

           Realizing his plan had failed, Flynn approached the Church in
1986 offering a settlement. The Church decided to pay nuisance
value to get rid of the distraction created by these cases, begin
a new era of expansion for Scientology and to settle matters with
the IRS. The first two of these objectives were achieved and all
of the Flynn-related cases, as listed below, were settled if they
had not been previously dismissed already. A new era of expansion
did begin for Scientology.

2/ The only other "Flynn" case that went to trial was Church
of Scientology of California v. Armstrong
, a suit the Church
brought against Armstrong, over Armstrong's theft of Church
archival materials. Armstrong brought a counter-suit with
intentional tort claims which was never tried and was part of the
Flynn settlement.

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           It also appeared that a settlement with the IRS would be
possible, but after years of good faith efforts and cooperation by
the Church in its efforts to settle with the IRS, agents in the Los
Angeles IRS Criminal Investigation Division and hardliners against
Scientology in the National Office, such as Marcus Owens, sabotaged
those efforts causing the negotiations to break down, as is covered
in more detail later.

           The following is the list of the Flynn-related suits that were
either dismissed or settled: Gerald Armstrong v. Church of
Scientology of California, et al.
, (cross-complaint), No. C 420
153, Superior Court of the State of California for the County of
Los Angeles; Jose Baptista v. Church of Scientology Mission of
Cambridge
, No. Civ. 81010, Superior Court of the Commonwealth of
Massachusetts; Mark D. Barron v. Church of Scientology of Boston,
No. 5110, Superior Court, Commonwealth of Massachusetts; Donald
Bear v. Church of Scientology of New York, et al.
, No. 81 Civ. 6864
(MJL), United States District Court Southern District of New York;
Peggy Bear v. Church of Scientology of New York et al.; No. 81 Civ.
4688 (MJL) United States District Court Southern District of New
York; Phillip Bride v. Church of Scientology of Portland, Church of
Scientology Mission of Davis, et al.
. No. A 8003-01189, Circuit
Court of the State of Oregon, Multnomah County; Eileen Brown for
Kevin Brown v. Delphian Fdn., et al.
No. 81-435 (FBL); United
States District Court of New Jersey transferred to the U.S.
District Court for the District of Oregon on July 28, 1982; Tonja
C. Burden v. Church of Scientology of California, et al.
, No.
80-501-Civ-T-K, U.S. District Court for Middle District of Florida,
Tampa Division. Gabriel and Margaret Cazares v. Church of
Scientology
. No. 82-886-Civ-T-15 United States District Court
Middle District of Florida, Tampa Division; Gabriel and Margaret
Cazares v. Church of Scientology of California, et al.

81- 3472-CA-OI, Circuit Court Seventh Judicial Circuit Volusia
County; John G. Clark, Jr. v. L. Ron Hubbard No. 85-356-MCN, United
States District Court for the District of Massachusetts; Bent
Corydon and Mary Corydon, Mark Lutovsky, Phil Black, Mark Chacon,
Church of Sciologos v. Church of Scientology Mission of Riverside,
et al.
, No. 154129, Superior Court of the State of California
County of Riverside; Paulette Cooper v. Church of Scientology of
Boston, Inc., et al.
, No. 81 681 MC United States District Court,
District of Massachusetts; Michael J. Flynn, Lucy Garritano,
Steven Garritano, James Gervais and Peter Graves v. Church of
Scientology of Boston, Inc
., (counter-claim), No. 40906 Superior
Court Commonwealth of Massachusetts; Michael J.

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Flynn v. Church of Scientology of California, et al., No. 54258,
Superior Court Commonwealth of Massachusetts; Michael J. Flynn v.
Church of Scientology International, et al.
, CV 85-4853, United
States District Court, Central District of California; Michael J.
Flynn v. L. Ron Hubbard, Mary Sue Hubbard, Church of Scientology of
California
, No. 83-2642-C, United States District Court for the
District of Massachusetts; Carol A. and Paul Garrity v. Church of
Scientology of California, Mary Sue Hubbard, and L. Ron Hubbard
, CV
81-3260 RMT (JRX), United States District Court Central District of
California; Hansen, Marjorie J. v. Church of Scientology of
Boston, Church of Scientology of California
, No. 47074, Superior
Court Commonwealth of Massachusetts; Betsy Harper v. Lafayette
Ronald Hubbard
, No. 65262, Superior Court Commonwealth of
Massachusetts; Ernest and Mary Adell Hartwell, v. Church of
Scientology of California et al.
, No. 196800, Eighth Judicial
District Court of the State of Nevada in and for County of Clark;
Thomas Jefferson v. Church of Scientology of California, L. Ron
Hubbard and Mary Sue Hubbard
, CV-81-3261, United States District
Court Central District of California; Deborah Ann Keck v. Church of
Scientology of California, et al.
, CV-81-6060 R, United States
District Court for the Central District of California; Dana
Lockwood v. Church of Scientology of California, L. Ron Hubbard and
Mary Sue Hubbard
, CV-81-4109 CBM, United States District Court
Central District of California; Nancy and John McLean, v. Church of
Scientology of California, et al
., No. 81-174-Civ-T-K United States
District Court Middle District of Florida Tampa Division; Steven R.
Pacca v. Church of Scientology of New York, et al.
, No. 12076-81,
Supreme Court New York County; Jane Lee and Richard Peterson v.
Church of Scientology of California, L. Ron Hubbard, Mary Sue
Hubbard
, CV 81-3259 CBM (KX), United States District Court Central
District of California; Patrick R. Rosenkjar v. Church of
Scientology of California, L. Ron Hubbard, and Mary Sue Hubbard
,
No. 81-1350, United States District Court for the District of
Columbia; Martin Samuels, v. L. Ron Hubbard, A8311-07227, In the
Circuit of the State of Oregon for the County of Multnomah; Howard
D. Schomer v. L. Ron Hubbard, et al.
, No. CV 84-8335, U.S.
District Court, Central District of California; Michael W. Smith
v. Church of Scientology of Boston, Inc. and Church of Scientology
of California
, No. 47236, Superior Court for the State of
Massachusetts; Manfred Stansfield, Valerie Stansfield, Franklin
Freedman et al. v. Norman Starkey, et al.
, No. CA 001 012, Superior
Court for the County of Los Angeles; Lawrence Stiffler v. Church of
Scientology of Boston and Roger Sylvester
, No. 44706, Superior
Court Commonwealth of Massachusetts; Gabor Szabo v. Church of
Scientology of California and Vanguard

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Artists International, No. C 312 329, Superior Court of California,
County of Los Angeles; Janet Troy v. Church of Scientology of
Boston and Church of Scientology of California
, No. 41073, Superior
Court Commonwealth of Massachusetts; Kim L. Vashel v. Church of
Scientology of Boston and Church of Scientology of California
, No.
47237, Superior Court for the Commonwealth of Massachusetts;
Margery Wakefield v. Church of Scientology of California, No.
82-1313 Civ-T-10 United States District Court for the Middle
District of Florida Tampa Division. Bent Corydon v. Church of
Scientology International, et al.
, No. C 694401, Superior Court of
the State of California, County of Los Angeles.

Other Categories of Cases:

           Although the cases generated by Michael Flynn comprised the
majority of tort litigation against the Church of Scientology
between 1980 and 1986, there were some other cases that arose
during the same period of time that were not entirely "Flynn" cases
although they were generally of the same ilk. Flynn shared
information, witnesses, tactics and sometimes acted as coordinating
counsel for other attorneys involved in similar litigation against
the Church. In other instances, while there was no apparent direct
link between Flynn and a particular plaintiff or attorney in a
suit, the similarity of claims and tactics suggests that these
individuals or attorneys were copying Flynn’s strategy. The
following cases fall into this category: Alberto Montoya v. L. Ron
Hubbard, Church of Scientology, et al.
, No. 450094, Superior Court
of California, County of San Diego; Joan Edin v. Church of
Scientology Mission of Davis, et al.
, No. 287191, Rita Engelhardt
B. v. Church of Scientology, et al.
, No. C 312 692, Superior Court
of California, for the County of Los Angeles. Each of those cases
was dismissed.

           There are a few cases where Flynn's influence was felt that
deserve separate discussion as they are cases that actually went to
trial and were adjudicated.

Christofferson:

           The Christofferson case was actually originally filed in 1977,
prior to the period covered by the Service's question.

           In 1977, after taking a few elementary courses at the Church
of Scientology Mission of Portland and working for a short time at
another organization, Julie Christofferson was kidnapped and, over
a four day period, deprogrammed to give up her religion by
convicted felon Ted Patrick. She was

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then turned over to attorneys by the anti-religion group involved
so she could bring suit against the Church on a contingent fee
basis.

           At trial, Christofferson's attorneys derided and distorted
Scientology's beliefs and practices to such an extent that the
Oregon State Court of Appeals overturned the $2 million verdict,
finding that Scientology is a religion and that the trial had been
rife with First Amendment violations. Upon remand,
Christofferson's lawyers -- by then FAMCO members -- applied
Flynn's tactics and inflamed a jury into a $39 million verdict that
led the trial court to declare a post-verdict mistrial in May of
1985. There never was another trial. The Christofferson case
was part of the 1986 global settlement with Flynn.

Wollersheim

           Larry Wollersheim had been in and out of churches of
Scientology for over a decade before he finally left for good in
1979. While in the Church he was continually in trouble over his
unethical business practices. He filed suit against the Church for
a variety of claims, Wollersheim v. Church of Scientology of
California
, No. C-332-027, in State Court in Los Angeles in 1980,
represented by attorney Charles O'Reilly, a participant in the
original FAMCO planning meetings.

           During the five month trial in 1986, O'Reilly applied the
FAMCO tactics and relied upon Flynn's stable of witnesses and
obtained an absurd verdict of $30,000,000.

           While the Wollersheim case is still going through the appeals
process, the jury verdict has been reduced to $2,500,000 from its
original $30,000,000, and further appeals are pending.

GO Criminal Activity Fallout Litigation:

           Another category of cases involved Guardian's Office members
or stemmed from GO illegal activities. This included, for example,
proceedings to compel testimony before a grand jury convened in
Florida to investigate GO activities and an action by the State of
Florida to disbar Merrell Vannier, an attorney who was also a GO
operative and who violated the canons of ethics as an attorney. It
was this kind of activity that was rooted out and condemned in the
disbanding of the GO. Nonetheless a certain amount of fall-out
litigation from the years of GO criminality had to be expected.
Cases falling into this category -- i.e., cases which were not
against the Church but which present allegations about the GO --
are as follows: The Florida

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Bar v. Merrell G. Vannier,. No. 61,691, Supreme Court of Florida
(Vannier was disbarred); Merrell and Francine Vannier v. Superior
Court for the State of California, County of Los Angeles
, No. 60
478, Supreme Court of California (Vannier lost an appeal against an
extradition order); In re Charles Batdorf; United States v.
Batdorf
, No. 80 CV Misc (MM-188), United States District Court,
Southern District of New York (Batdorf convicted); In re Grand Jury
Proceedings (Mitchell Hermann, Peggy Tyson, Richard Weigand, and
Duke Snider
), Nos. 80-5 Misc-T-H and 80-614 CIV-T-H, Municipal
District State of Florida -- Tampa Division (investigation
dropped); United States v. Stephen E. Poludniak. Libby Wiegand,
No. 80-00143 CR (1), United States District Court for the Second
District of Missouri (defendants plead guilty).

The Mayo Cases:

           Mayo was removed from a senior post in 1982 due to unethical
conduct and the discovery that he had altered Scientology religious
practice and Scriptures. Mayo then left the Church and along with
a few other ex-Scientologists established the Church of the New
Civilization, dba Advanced Ability Center, in Santa Barbara,
California, where he delivered his own version of Scientology
religious services to ex-Scientologists. He also sought the
defection of Church members in order to build his membership. Mayo
then acquired copies of certain confidential advanced Scientology
Scriptures which had been stolen by some of Mayo's confederates
from a Church facility in Denmark.

           As a result, in 1985, Religious Technology Center, Church of
Scientology of International and Church of Scientology of
California sued David Mayo and others in a suit alleging RICO
causes of action based on the conspiracy to acquire the secret
confidential materials of the Scientology religion and use them for
the economic advantage of Mayo's organization and other related
splinter groups. This litigation consists of the consolidated
cases, including counter-claims, of Religious Technology Center, et
al. v. Scott, et al.
, U.S. District Court (C.D. Dal. 1988), No.
CV 85-711 JMI (Bx) and Religious Technology Center, et al. v.
Wollersheim, et al.
, U.S. District Court (C.D. Cal. 1985) No. CV
85-7197 JMI (Bx).

           Although this litigation is still ongoing, Mayo's Advanced
Ability Center has long since ceased to operate and the various
individuals who had been associated with it have for the most part
scattered to different areas.

           The IRS has been supportive of Mayo's efforts. Mayo became an
IRS informant during the CID investigation of the

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mid-80's. Whereas Scientology organizations have been unable to
obtain exempt status, the IRS granted exempt status to Church of
the New Civilization - even though it had closed its operations and
its sole remaining business was to contest this litigation.
Further, much of this litigation is financed by wealthy
psychiatrist Sarge Gerbode. In 1986, Gerbode formed a trust known
as the "Friends of the First Amendment." The IRS granted exempt
status to this anti-Scientology fundraising entity, and Gerbode has
funnelled in excess of $1.4 million dollars to fund Mayo's
litigation through that trust as charitable tax deductions for
himself.

The Aznaran/Yanny Litigation:

           Vicki Aznaran is the former President of Religious Technology
Center and her husband, Richard, is a former Church staff member.
Vicki was removed from her position by the Trustees of RTC in March
1987 as she had betrayed the trust of her position and was not
acting in the best interests of the religion. By her own
testimony, she first got in trouble when she sought to place an
ex-GO criminal in RTC's personnel department. Vicki and her
husband then left the Church after Vicki's removal.

           Joseph Yanny served as an attorney for RTC and various
churches from 1983 until November of 1987. His primary contact
with the Church was with RTC and Vicki Aznaran, with whom he
developed a close personal relationship.

           After Vicki's departure, the new officers of RTC examined
Yanny's performance, determined it to be sub-standard, and learned
that he was a user of LSD. He was then discharged.

           Upon his termination, a billing dispute erupted between Yanny
and the Church, and Yanny enlisted the aid of the Aznarans in
supporting him in his billing dispute and, in exchange, acted as de
facto
counsel for the Aznarans in helping them prepare and file a
lawsuit against his former clients. The Aznaran suit, Aznaran v.
Church of Scientology of California, et al.
, U.S. District Court
(C.D. Cal. 1988), No. CV 88-1786 JMI, was filed on April 1, 1988.
Despite Vicki Aznaran's high ecclesiastical position as the head of
RTC for a number of years, her suit portrays her as a victim who
didn't know for all these years that she was really "brainwashed"
and under "mind control" - plus the other stock inflammatory
allegations that characterize this sort of litigation. It seeks
$70,000,000 in damages and is still pending.

           Shortly after the Aznaran complaint was filed, Yanny

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received from Vicki Aznaran a declaration by her as the former
President of RTC supporting Yanny's claim that a retainer he
received in 1985 was "non-refundable." Yanny used this declaration
in his fee dispute over the retainer which is now in litigation
along with claims against Yanny for his breach of his fiduciary
duties.

           Even before the Aznaran case was filed, Al Lipkin, one of the
agents who conducted the IRS's CID investigation in 1984 and 1985,
was in contact with Yanny and the Aznarans. It was Lipkin who
arranged for the Aznarans to be interviewed by Exempt Organizations
agents from Los Angeles who were conducting an on-site review of
Church records, ostensibly the final step in negotiations
concerning tax exempt status for Scientology churches. The day
after issuing summonses to the Aznarans to be interviewed and to
produce documents relating to their lawsuit, the same agents issued
document requests to Religious Technology Center asking RTC to
produce Vicki Aznaran as a corporate officer of RTC.

           While the allegations of the Aznaran complaint serves as the
purported reason for the summonses and interview, in reality the
taped interview was a contrived setting for an IRS/Aznaran diatribe
against the Scientology religion and L. Ron Hubbard, with the IRS
agents urging the Aznarans to press their litigation and the
Aznarans urging that the tapes of the interview be furnished to
Lipkin and LA IRS CID.

           It was the Church's discovery of this event which precipitated
the breakdown of the earlier negotiations between the Church and
the IRS.

           Coincident with their interview with the IRS, the Aznaran's
personal tax problems evaporated and their private investigation
business was retained by Guess? Jeans -- the large jeans
manufacturer that Al Lipkin befriended during an earlier IRS CID
investigation (which also involved tampering with civil litigation
and was the subject of a Congressional investigation).

           The Aznaran suit is still pending at this time and has not yet
gone to trial. Meanwhile Yanny has pursued an agenda to cause as
much harm as possible to the Church by repeatedly betraying his
fiduciary duties as former Church counsel by providing information
concerning the Church to the Aznarans and a number of other
litigants against the Church, as well as to the IRS and the FBI.

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Other Current Litigation:

           Several other suits are pending against Churches of
Scientology that allege some form of tort claim. Although there
are variations in the claims and different attorneys representing
the plaintiffs, there is one common denominator underlying most of
these suits: the influence of the Cult Awareness Network ("CAN").

           CAN, which the IRS has recognized as exempt under section
50l (c) (3) as an educational organization, is in fact a bigoted hate
group that targets and tries to destroy churches and religions.
CAN's principal activities are negative propaganda campaigns,
covert dissemination of false information for purposes of
subversion and acting as a referral service for deprogrammers on a
fee sharing arrangement. Although complaints have been made to the
IRS about CAN's continued exempt status in light of its true
activities, no action has been taken.

           The Church of Scientology is presently CAN'S principal target
for attack, and CAN's favorite tactic is to spread false and
defamatory information about the Church through all available means
while holding itself out as an authority on the subject. When
contacted by anyone with a complaint about the Church, CAN
manipulates them to attack the Church either through the media or
by referring them to an anti-Scientology attorney.

           The majority of the suits against Churches of Scientology
recently filed and presently pending, that have not been otherwise
discussed above, fall into this category. None has gone to trial.
The following are cases instigated or influenced by CAN either
directly or as a result of one of CAN's spread of false
information: Terry Dixon v. Church of Scientology Celebrity Center
of Portland, et al.
, No. 9010-08200 Multnomah County - Circuit
Court of Oregon (in arbitration); John Finucane, David Miller,
Alexander Turbyne v. Emery Wilson Corporation, et al.
, No. C
045216, Superior Court of the State of California for the County of
Los Angeles (pending); Dorothy Fuller, an individual v. Applied
Scholastics International, et al.
, No. 92K 11466, Municipal Court
of the State of California for the County of Los Angeles (just
filed); Lisa Stuart Halverson v. Church of Scientology Flag Service
Organization, et al.
, No. 92K11186, Municipal Court for the State
of California, County of Los Angeles (settled); Thomas and Carol
Hutchinson v. Church of Scientology of Georgia, et al.
, No. D90315,
Superior Court of Fulton County, State of Georgia (pending); Mark
Lewandowski v. Church of Scientology of Michigan, et al.
, No.

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91-421716-LZ, State of Michigan in the Oakland Circuit Court
(pending); Peter and Francis Miller v. Church of Scientology et
al.
, No. 027140, Superior Court for the State of California, County
of Los Angeles (case abated re the Church and in arbitration re
Sterling); Ted Patrick, et al. v. Church of Scientology of
Portland, et al.
, State Court of Oregon for the County of Multnomah
(dismissed); Dee and Glover Rowe v. Church of Scientology of Orange
County, et al.
, No. BC 038955, Superior Court of California
(pending); Frank and Joan Sanchez v. Sterling Management Systems,
et al.
, No. 91-224-CV, 4th Judiciary District Court San Miguel
County, State of New Mexico (pending); Thomas Spencer v. The Church
of Scientology, et al.
, BC 026740, Superior Court of the State of
California for the County of Los Angeles (settled); Irene Zaferes
v. Church of Scientology
, Superior Court of the State of California
County of Los Angeles (dismissed); Jo Ann Scrivano v. Church of
Scientology of New York, et al.
, No. 87-1277, Supreme Court of the
State of New York, County of Suffolk (in discovery stage); Marissa
Alimata and Richard Wolfson v. Church of Scientology of California,
etc., et al.
, No. C 650 988, Superior Court of the State of
California, County of Los Angeles (judgment entered for the
Church).

Personal Injury, Medical-Related Suits:

           Another category of lawsuits involve claims by individuals who
have been injured on Church premises or in some way attributed
responsibility to the Church for an injury or death. For example,
in the Rabel case listed below, a stereo speaker accidentally fell
out of the window of a Scientology mission and hit someone on the
street below. The case was settled. The Arbuckle case was brought
by the parents of an individual who died while a parishioner of a
church of Scientology. Although his death from kidney failure was
traceable to his use of steroids, the case was settled to avoid
expense of litigation. Each of this group of cases was either
settled or dismissed. Mira Chaikin v. Church of Scientology, L.
Ron Hubbard, et al.
, No. 81 Civ 7525, United States District Court
of the Southern District of New York; Gary and Susan Silcock v.
Church of Scientology, Mission of Salt Lake, et al.
, No. C 86-7213,
Third Judicial District Court for the Salt Lake County, Utah;
Rimando, Pedro H. Irene Marshall v. The Church of Scientology of
San Francisco, et al.
, No. C 669015, California Superior Court,
County of Los Angeles; Wendy and William Rabel v. Eric Rising, Jane
Doe Rising, his wife; Church of Scientology Mission of University
Way, et al.
, King County Superior Court, Washington State; Francine
Necochea, a minor child, by her guardian Ad Litem

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Cecilia Garcia v. Church of Scientology, et al., No. C 165360,
California Superior Court for the County of Riverside; Roxanne
Friend v. Church of Scientology International, et al.
, No. DC 018
003, California Superior Court, County of Los Angeles; Bruce and
Lynnel Arbuckle v. Skip Pagel M.D., Church of Scientology Celebrity
Center Portland, et al.
, No. 8907-04119, Multnomah County, Oregon
Circuit Court.

           A final category of lawsuits includes cases that have arisen
out of financial or property disputes or transactions involving
individual Scientologists, their businesses or creditors or
organizations or individuals that Churches of Scientology or
related organizations have had financial dealings with. Often the
Church is named in such cases simply as a perceived "deep pocket"
or as a tactic to try to coerce a settlement. Such cases are
typically dismissed or settled. These cases are as follows: In re
Dynamic Publications Inc.
, U.S. Bankruptcy Court in Maryland
(settled); Gregory F. Henderson v. A Brilliant Film Company, et
al.
, No. 164213, California Superior Court, County of San Joaquin
(settled); Gregory F. Henderson v. Marvin Price, et al., No.
165165, California Superior Court, County of San Joaquin (settled);
Peter Siegel v. Religious Technology Center, et al., CV 89-5471,
United States District Court, Central District of California
(pending); Steve Dunning v. Church of Scientology, et al., No.
060613, California Superior Court County of Los Angeles (dismissed
with prejudice); Jeff and Arlene Dubron v. Church of Scientology
International, et al.
, No. NCC 29267B, Superior Court of California
Burbank Division (settled); Sherry Fortune v. Church of Scientology
American Saint Hill Organization and Chuck Tingley
, No. C 099061,
Superior Court of California, County of Los Angeles (dismissed as
to the Church and settled as to Tingley); Vicki Adler v. American
Sun, Inc., Church of Scientology of Los Angeles
, SWC 81874,
Torrance Superior Court of California (settled); Benham v. Church
of Scientology Celebrity Center of Dallas
, No. 91-08216, 9th
Judicial District Court, Dallas County (settled); Michael Burns v.
The Recording Institute of Detroit, Inc., et al.
, No. 91-422334-CZ,
Oakland County Circuit Court, State of Michigan (pending); Clay
Eberle and Eberle & Jordan Law Firm v. Church of Scientology of
California
, No. NCC 166486, Superior Court of the State of
California, County of Los Angeles in the City of Glendale
(dismissed in favor of the Church); Mario Metellus v. Church of
Scientology of New York, Linda Barragan
, No. 01133-89, Superior
Court of the State of New York, County of New York (settled).

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CONCLUSION:

           The civil litigation campaign against the Church in the 1980's
was unscrupulous in its creation and execution. Using the crimes
of the GO and the GO's documents, Flynn and others have
manufactured meritless claims and secured the survival of those
claims against the very people and organizations which uncovered
the GO's crimes and harrassment, put an end to GO misconduct, and
rid Scientology of the criminals who were responsible for the GO's
terrible legacy. In that regard, the unsettling truth is that what
can correctly be characterised as the GO's last operation, was the
litigation campaign the GO criminals, Flynn and his confederates
and their IRS allies launched against the people and organizations
which put an end to the GO.

* * * *

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