Investors bilked out of millions - Scientologist took in millions

7 Mar 2001

Scientologist took in millions
A "former" Scientologist did over 300
investors out of 22 million franks
Despite that he does not want to go to prison

Zurich, Switzerland
March 3, 2001
Tages-Anzeiger
http://tages-anzeiger.ch

by Hugo Stamm

At the end of the 1980s and early 1990s Scientologists caused financial damages of about 100 million franks with partially fraudulent businesses. One of them, a 57-year-old attorney, former magistrate and high-ranking bank employee, went before the superior court on Friday. He had relieved German investors of 22 million franks, thereby earning himself two years nine months prison from the district court.

The 40-year-old codefendant who was responsible for the computer programming and had received six months imprisonment in the first trial said it clear as a bell about the proceedings, "If we would not have been Scientologists, then we would not be standing here today, that is guaranteed." With that in mind an invisible "codefendant" who had not even been accused was sitting on the bench with the other defendants: the Scientology movement, which by many votes was a central theme.

The primary reason: the dear money plays a dominant role in the organization. Both accused were heavily in debt so that they could pay the "church" 350,000 franks and 450,000 franks respectively for courses and services. Besides that the attorney had bought worthless pictures of sect founder Ron Hubbard for hundreds of thousands of franks and had amassed debts of 3.5 million franks.

"Rothschild Bank" founded

Once the lead defendant had stumbled across a lavishly gushing source of money there was no stopping him. He sought out investors of hard cash for a Munich businessman in southern Germany. In newspaper inserts the two passed themselves off as the "Federal Association of American Banks" and promised 9 to 10 percent interest. But behind that were only two offices which bore the reassuring name of "Rothschild Bank." From 1991 to 1994 the attorney took in money, mostly cash, in Zurich, which he then hand-carried to Munich. In return he reaped 600,000 franks in commission from his business partner. When their cover was blown, the accomplice in Munich vanished - and with him most of the money. He has still not surfaced.

The 40-year-old codefendant had worked for his Scientology colleague as a computer technician. The district court viewed that as complicity and commercial fraud and required the two ex-Scientologists to compensate for the millions in damages jointly. They appealed that because they regarded the sentence as too much. The primary defendant asked the superior court for a sentence reduction to a maximum of 18 months in prison suspended and the codefendant wanted exoneration.

The accused lawyer asserted that he had completely trusted his Munich business partner. He said he had no suspicion that his partner could have embezzled any money until shortly before the crash. His attorney had stated there was a connection to the many courses which his client had taken with Scientology: he said his client had been strongly mentally influenced and had learned to suppress doubts. Besides that the courses were said to have strongly modified structural thought.

His codefendant and his attorney made an even stronger case. They spoke of a loss of ability to differentiate, of totalitarian systems and of inquisitorial proceedings and brainwashing. The judges also asked question after question about Scientology. But they have not yet dismissed any part of the conviction.

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