IRS

Scientology Legal Cases — July 2018: Scientology Wins Garcia Sham Arbitration; Settles Forced Abortion Case in DeCrescenzo

Laura DeCrescenzo

Events in a mediation last weekend signaled that the Church of Scientology was preparing to settle with Laura DeCrescenzo in her nine year old lawsuit that detailed numerous abuses she suffered at Scientology’s hands as a Sea Org member: Forced abortion, sleep deprivation, brainwashing, and false imprisonment.

Scientology’s Religious Technology Center (RTC) was named as a defendant in the lawsuit. Scientology dictator David Miscavige exercises supreme control over Scientology from his position as Chairman of the Board RTC.  DeCrescenzo’s lawsuit threatened to pierce Scientology’s corporate veils and show that Scientology is the alter ego of David Miscavige.

News of the settlement with Laura DeCrescenzo has just been published by Tony Ortega. In her long and grinding legal battle, DeCrescenzo was able to defeat Scientology’s contract called Agreement Regarding Confidential Religious Files. In this particular contract, Scientologists forever sign away all their rights to ever read, inspect, review, or own their preclear folders.

Among her other legal victories in pretrial, Laura DeCrescenzo was able to establish that over 100 people in Scientology had access to her confessional folders and there was no priest-penitent privilege. This struck another major blow against Scientology’s demonstrably false claim that pc folders are confidential. Scientology’s former members who speak out have consistently testified that their “private” pc folder data was used against them in retaliatory Scientology Fair Game attacks. Fair Game puts the lie to all claims made by Scientology that anything a former Scientologist said in session is private. L. Ron Hubbard himself sanctioned the use of pc folder data against former members who speak out.

The upcoming trial in DeCrescenzo posed enormous risks for the Church of Scientology. These risks included the setting of legal precedents that would be adverse to Scientology in all future litigation filed against it.

GARCIA

On July 17, 2018 Federal Judge James Whittemore ruled in the Church of Scientology’s favor in the sham arbitration it conducted with former Scientologists Luis and Rocio Garcia. In his ruling, Judge Whittemore’s concluded that the First Amendment prevented him from interfering in the outcome of Scientology’s arbitration procedure with the Garcia’s. To outsiders, it was abundantly clear to see that the arbitration was a complete sham.

The Garcia case was predicated on the fact that the Garcia’s had signed Scientology’s scammy “Religious Services Enrollment Application, Agreement, and General Release” contract. In this contract, the Garcia’s agreed to be bound by Scientology’s ecclesiastical rules including arbitration. According to the contract, Scientology was entitled to set all the rules in what became a one-sided farce that served to highlight the bad faith that is integral to the Church of Scientology.

We covered specifics of Scientology’s bad faith in two previous articles:

How Scientology Inc. Legally Cripples Its Own Members: The Four Unconscionable Contracts

Why the Church of Scientology Gets Away with Flagrantly Abusing and Harming its Own Members and How to Stop It.

An excerpt from our second article:

Churches, temples, mosques, and ashrams are free to determine their own internal form of government, rules, and discipline. The government is prohibited from intruding into these ecclesiastical matters. The First and Fourteenth Amendments to the US Constitution guarantees these rights. In the legal case Serbian Eastern Orthodox Diocese, Etc. v. Milivojevich, the Court stated:

“…the First and Fourteenth Amendments permit hierarchical religious organizations to establish their own rules and regulations for internal discipline and government, and to create tribunals for adjudicating disputes over these matters. When this choice is exercised and ecclesiastical tribunals are created to decide disputes over the government and direction of subordinate bodies, the Constitution requires that civil courts accept their decisions as binding upon them.”

So long as the “rules and regulations for internal discipline and government” do not violate US law, the members of a religious group can be subjected to harsh ecclesiastical tribunals, severe punishments, and even the humiliating public disclosure of their sins and the US courts cannot do anything about it. This is the dark side of “freedom of religion.”

Judge Whittemore cited Serbian Eastern Orthodox Diocese, Etc. v. Milivojevich in his ruling in Garcia.

In our opinion, Judge Whittemore issued an intellectually lazy and judicially incompetent ruling. Rather than focusing on the bad faith of Scientology during the entire arbitration process — which is a serious issue — he simply took the easy way out.

An exhausted old cow can’t deliberate properly: A perfect metaphor for Judge James Whittemore’s ruling in Garcia. 

Had Scientology’s attorneys known in advance that Judge Whittemore was so slovenly, they would have had Scientology’s arbitrators throw chicken bones on the floor; read the patterns; deny the Garcia’s any award; and have this chicken bone ecclesiastical procedure confirmed by Scientology’s IJC Mike Ellis. Judge Whittemore would have accepted their decision and issued the exact same ruling: The court may not interfere. Whittemore is 66 years old. He needs to be put out to pasture like an old cow before he does further judicial damage to other parties in his lackadaisical dotage. The poor old boy is tired.

SCIENTOLOGY: BAD FAITH, DIRTY CONTRACTS, BROKEN DREAMS

Although the Garcia’s lost in what was a sham arbitration, the Church of Scientology lost in a much bigger way. What the world saw in Garcia was Scientology’s bad faith and lies at work. For example, the Garcia’s were fraudulently induced to donate $65,000 to cover the costs of placing the Scientology cross atop the Super Power Building. This same fraudulent inducement was propounded to other Scientology by Scientology’s dishonest and predatory registrars (sales people)

Scientology’s registrars and certain other public-facing staff members can be so craven and dishonest that the Church of Scientology had to write a specific policy in which it does not stand behind any statements made by any of its staff members:

Laura DeCrescenzo prevailed in her case because Scientology’s conduct was so abhorrent that it appears to have exceeded First Amendment religious protections and, in this writer’s opinion, to have crossed the line into criminality. In any event, Scientology did not want to risk appearing in a public court of law where a jury would hear a shocking litany of horrific acts Scientology perpetrated against a young woman.

And under all circumstances, Scientology could not risk having David Miscavige placed on the stand. This is because the entire operating basis of the Church of Scientology is to protect David Miscavige from the consequences of his own actions. The same operating basis was at work when L. Ron Hubbard was alive and in control of the Church. The coddled and brutal tyrants at the top of the Scientology crime syndicate must always be protected at all costs. Mary Sue Hubbard learned this the hard way as has Shelly Miscavige.

In my view, the Church of Scientology lied to and swindled the Garcia’s out of hundreds of thousands of dollars and got away with it due to its First Amendment protections. The same holds true of the many people Scientology has swindled out of money these people have placed as “Monies on Account.” The fact is that there is no such thing as “Monies on Account” in Scientology. The actual contract Scientologists sign characterizes the monies as irrevocable donations and states that Scientology is under no obligation to return it. Again, this emphasizes why the IRS must move to revoke Scientology’s tax exemption.

The bad faith, lies, greed, hostility, and malice the Church of Scientology continually exhibits towards its own members is contained in the series of dirty contracts Scientologists must sign at every step of their journey up the falsely named “Bridge to Total Freedom.”

Bottom Line: No one should ever sign any contract with the Church of Scientology — and no one should ever donate money to this already wealthy and dishonest organization.

There is no Bridge to Total Freedom in Scientology.

There is only a Bridge to Total Slavery and Ruination.


Judge Whittemore’s Ruling in Garcia:

Garcia-v-Scientology-Order-denying-Garcia-motion

Kaya Jones on Scientologist Joy Villa

In an interview with Halsey News Network, Pussycat Dolls member Kaya Jones offers her insights on Joy Villa’s character and deceptions. “The amount of lies that I caught was super-alarming,” Jones notes. As a member of the Pussycat Dolls, Kaya Jones enjoyed tremendous fame. Having experienced fame, Kaya Jones suggests that Joy Villa is “scared that this is going to go away.” Trump supporters have now seen through Joy Villa’s opportunism, machinations, and deceptions.

Fast forward to 13:27 forward:

Background: Scientologist Joy Villa gained wide recognition for wearing her MAGA dress to the 2017 Grammy awards. Villa used this recognition to opportunistically position herself as a part of Trump’s “Make America Great Again” (MAGA) movement. Vinnie James immediately spotted Joy Villa as a phony and began working tirelessly to expose her — and often at the price of being wrongly criticized for many months. Vinnie Jones stood his ground.

Joy Villa got on President Trump’s radar and he made a tweet urging her to run for political office. Villa used this tweet to ingratiate herself the White House circles where she had her photo taken with Ivanka Trump and tweeted this widely. Joy Villa deceived true Trump supporters into believing she was something she was not. Scientologist Joy Villa claimed to be a Christian. This is not possible as Scientology forbids “other practices” as we explain below.

Joy Villa announced that she was exploring a run for the US Congress. She formed an exploratory committee as required by US election law. From my perspective, Villa has been using her exploratory committee largely for purposes of self-promotion. Right around the New Year the MAGA people began catching onto Joy Villa’s fraud. At present, Joy Villa seems to be self-imploding in her self-aggrandizing quest for fame. No one is fooled.

And then a bombshell: Tony Ortega exclusively broke the story of Joy Villa’s 2007 domestic violence arrest. Villa had withheld her arrest from the public. Instead, she has pretended to be a Christian when Scientology told the IRS that Scientologists are expected to drop their religious affiliations and become Scientologists on an exclusive basis. In the secret 1993 settlement between IRS and Scientology, David Miscavige’s attorney Monique Yingling told the IRS:

“Although there is no policy or Scriptural mandate expressly requiring Scientologists to renounce other religious beliefs or membership in other churches, as a practical matter Scientologists are expected to and do become fully devoted to Scientology to the exclusion of other faiths. As Scientologists, they are required to look only to Scientology Scriptures for the answers to the fundamental questions of their existence and to seek enlightenment only from Scientology. Thus, a Scientologist who grew up in the Jewish faith who continues formal membership in his synagogue and attends services with his family violates no Scientology policy or tenet. On the other hand, such a person is not permitted to mix the practice of his former faith into his practice and understanding of Scientology so as to alter orthodox Scientology in any way.”

The reason Scientologists are “expected to and do become fully devoted to Scientology to the exclusion of other faiths” is because L. Ron Hubbard considered all other religions to be what he called “R6” alien implants. The Church of Scientology will not disclose to the public Hubbard’s secret teachings about Jesus Christ, Islam, or any other religion. Only the most indoctrinated Scientologists get to read Hubbard’s secret teachings about Jesus Christ. As a public service, therefore, the Scientology Money Project discloses these teachings.

The first of Hubbard’s secret teachings are from the original OT VIII level. These materials are corroborated by George White who did the original OT VIII level and read the materials himself. White discusses this in his book Lucifer’s Bridge: Scientology’s Lost Paradise. The materials are corroborated by others as well. In the original OT VIII. Hubbard called himself the Antichrist and denounced Jesus as a “lover of young men and boys.” L. Ron Hubbard:

No doubt you are familiar with the Revelations section of the Bible where various events are predicted. Also mentioned is a brief period of time in which an archenemy of Christ, referred to as the Antichrist, will reign and his opinions will have sway. All this makes for very fantastic, entertaining reading but there is truth in it. This Antichrist represents the forces of Lucifer (literally, the “light bearer” or “light bring”), Lucifer being a mythical representation of the forces of enlightenment, the Galactic Confederacy. My mission could be said to fulfill the Biblical promise represented by this brief Antichrist period. During this period there is a fleeting opportunity for the whole scenario to be effectively derailed, which would make it impossible for the mass Markabian landing (Second Coming) to take place. The Second Coming is designed, among other things, to trigger a rapid series of destructive events….

For those of you whose Christian toes I may have stepped on, let me take the opportunity to disabuse you of some lovely myths. For instance, the historic Jesus was not nearly the sainted figure he has been made out to be. In addition to being a lover of young boys and men, he was given to uncontrollable bursts of temper and hatred that belied the general message of love, understanding and other typical Marcab PR. You have only to look at the history his teachings inspired to see where it all inevitably leads. It is historic fact and yet man still clings to the ideal, so deep and insidious is the biologic implanting. It is a good joke that the Galactic Confederacy is associated with the Serpent in the Garden, the Beast and other emissaries of the “Prince of Darkness.” Yet in certain passages and esoteric interpretations of the Bible (much of which has been taken out and effectively suppressed for centuries) as well as the Kabbalah, the truth reveals itself quite nicely for the clever and the ungullible.

Those Scientologists who completed the original OT VIII level reacted so badly to the release these materials that Scientology withdrew the materials and released a redacted version of OT VIII.

When the original OT VIII level materials were introduced into the court record by Steven Fishman in Church of Scientology International v. Fishman and Geertz, (Case No. CV 91-6426 (HLH (Tx) U.S. District Court for the Central District of California), the Church and claimed hem to be spurious.

However, what puts the lie to this is that when Scientology obtained a federal warrant to raid Arnie Lerma’s house in 1995 to confiscate OT materials, Scientology seized the original OT VIII material and catalogued it as HCO BULLETIN OF 5 MAY 1980 with RTC as the copyright owner. Scientology used the materials as evidence against Lerma until it was realized they would be scandalous in the public court record. HCO BULLETIN OF 5 MAY 1980 was subsequently dropped as evidence after initially being introduced as evidence. This begs the question: If the original OT VIII materials were spurious, then why did Scientology seize them in the raid?

Read OT VIII Part B from the court record on Karin Spaink’s blog.

Writing under his screen name Path of Buddha, George White posted a comment on Marty Rathbun’s blog in response to a question about the original OT VIII materials:

Windhorse,

The anti-Christ OT8 that I did on the Freewinds was on July 17, 1988. I met miscavige on the Freewinds just before he canned it. I remember because I met him on the main deck for a supper buffet. My two FSM’s did it before me and very candidly we discussed the anti-Christ, the synthetic Karma, and the spontaneous combustion of anyone who could not get it all right. Hugh Urban agrees with me as he has also researched it at Ohio State. The religious department there has known about at for about five years. It is common knowledge in academic circles

Much Metta,
George M. White

Bob Grant did the original OT VIII on the Freewinds and also confirmed on Rathbun’s blog that it contained the Antichrist reference and Hubbard’s remark that Jesus was a lover of young men and boys.

In this next Fair Use excerpt of Hubbard speaking, we pick up his lecture where he is talking about how everyone on this planet was “implanted” to believe they had been crucified. Hence, Hubbard says the man on the Cross is an “everyman” implant shared by all humans. Hubbard then says there was no Christ:

In his teachings, Hubbard attacked Jesus and Christianity as implants:

“Also the Christian Church used (and uses) implanting (with a squirrel version of the “7s”). These gangsters were the Nicomidians (sic) from lower Egypt who were chased out for criminal practices (implanting officials). They took over the Niocene (sic) Creed before the year zero, invented Christ (who comes from the crucifixion in R6 75m years ago) and implanted their way to “power”. The original Nicomidians (sic) date about 600 BC and people who were Christ date at 75m years ago. ” – L. Ron Hubbard, Resistive Cases, Former Therapy, HCOB 23 Sep 1968.

For a long while, some people have been cross with me for my lack of co-operation in believing in a Christian Heaven, God and Christ. I have never said I didn’t disbelieve in a Big Thetan but there was certainly something very corny about Heaven et al. Now I have to apologize. There was a Heaven. Not too unlike, in cruel betrayal, the heaven of the Assassins in the 12th Century who, like everyone else, dramatized the whole track implants – if a bit more so. The symbol of the crucified Christ is very apt indeed. It’s the symbol of a thetan betrayed.”, – L. Ron Hubbard, HCOB 11 May, 1963

“Further, we have our hands on an appalling bit of technology where the world is concerned. With rapidity and a Meter it can be shown that Heaven is a false dream and that the old religion was based on very painful lie, cynical betrayal.” – L. Ron Hubbard, HCOB 11 May, 1963

“Religion does much to keep the assumption in restimulation, being basically a control mechanism used by those who have sent the preclear into a body. You will find the cross as a symbol all over the universe, and the Christ legend as implant in preclears a million years ago.”, Professional Auditors Bulletins, vol. 2, p. 26 , copyright 1954.

“Now we say this thing called a thetan is capable of producing all sorts of things, and we say this is THE person. So therefore, we differ enormously from the Christian statements on the subject. They say, ‘you, son, must save your soul.’ The fellow says, ‘I don’t have one!’ So therefore, the christian religion cannot possibly be true…and they lose all kinds of converts this way. Somebody saving his soul is doing something very interesting. He evidently has something set up over here, that has probably, mass, that he says is his soul! And then he goes about saving it and it turns out to be a demon circuit called “Mama,” or something. Now he expects THIS to go to heaven. (laughs)”, Clearing Congress Lecture (videotape), L. Ron Hubbard, 1958.

” Men, then … a whole lot of people will say carelessly ‘Well, God is everywhere’, remember that this was an idea which was introduced rather lackerly in christian religion. The God of which they speak, of whom they speak continually, eh Yahweh, Lord knows how it’s produ.. pronounced, because it is so secret, that nobody is really is supposed to be able to pronounce it, so they ommitted all of the vowels in the word, and they spell it only with it’s consonants. So Lord knows how this word is to be pronounced, but the more agreed upon pronunciation amongst scholars so they can talk about it is Yahweh. And this is the Christian God. But he lives in a trunk with a leopard skin. That’s right, that’s the full story of it. “

” Old therapies include the 2000 yr ago plus or minus Aoscuplepian drug treatment (hillabore) which produced a conclusion and coma, and in which the nut practitioner made up as a God and “visited” the patient in a “dream”. This outfit was all over the ancient world. — – L. Ron Hubbard, Resistive Cases, Former Therapy, HCOB 23 Sep 1968. “

And finally, David Miscavige speaking on the importance of Scientology:

“For while you’ve often heard it said ‘we are the only major religion to emerge in this 20th century,’ the truth is more than that. In fact, we are the only new religion. Not a reinterpretation of some ancient doctrine, but the only original scriptural voice in the last 2,000 years.”, International Scientology News #7, David Miscavige, March 13, 1998

Look at the arrogance of Scientology cult leader David Miscavige: He states that Scientology is the “only original scriptural voice in the last 2,000 years.” What Miscavige fails to mention is Scientology’s $460,000 price tag to reach OT VIII only to discover that Jesus was an alien implant!

DOX: Scientology’s pricey Florida ‘spiritual mecca’ keeps up its value in latest tax records

(This piece was published on Tony Ortega’s Underground Bunker on 12.2.2017. It is republished here for archival purposes)

Jeffrey Augustine is once again keeping us up to date on Scientology’s financial documents. In this case, he has new figures on how much just one of many Scientology’s entities is worth, according to newly available tax documents.

In 2006, a change in the law required all non-profit organizations — even churches — to submit tax returns known as 990-T forms if they generated what is known as “unrelated business income.” A few years ago, I began finding and turning over to the Underground Bunker the 990-Ts for Scientology’s various entities.

Often, that income is fairly modest. But what’s more important for our purposes is that on each 990-T form there’s a box to fill out for “book value.” In other words, these organizations are asked to estimate their value in assets.

That requirement has led to a rare window into Scientology’s riches, and we like to keep up on the latest changes in those values.

In this case, I’ve found new documents related to the Flag Service Organization (FSO), the entity that runs Scientology’s Flag Land Base in Clearwater, Florida. This is where wealthy Scientologists from around the world come for expensive high-level auditing and other services. And keep in mind, FSO is just one of many entities that make up the Scientology movement, but it’s one of the more important ones.

So let’s see how the value of FSO has changed:

2008: $234.8 million
2009: $246.5 million
2010: $251.9 million
2011: $210.1 million
2012: $290.7 million
2013: $218.2 million
2014: $241.1 million
2015: $257.5 million

And here’s what that change in value looks like…

FSO is not the most valuable entity in the Scientology orbit. When we first began gathering these tax returns, for the year 2011, the Church of Scientology International was worth $790.8 million and the Church of Spiritual Technology listed a value of $434.4 million, for a total of $1.2 billion just for those two entities.

But even if it’s a distant third, the Flag Service Organization is steadily increasing in value.

This is consistent with what the newest defector from Flag told the Bunker recently. Peter Nyiri, who made a dramatic escape to freedom several months ago, said that the Flag Land Base is still bringing in huge income, of $2 million to $4 million a week — by starving the “outer orgs” and pressuring Scientology’s shrinking membership to come to Flag as often as they can for services.

Looking more carefully at recent returns by the FSO with the help of financial expert Dr. Jeff Wasel, we found a few noteworthy items…

In Part V of Flag’s 990-T returns filed in the period 2008-2013, FSO checked “Yes” on question 1 to indicate that it had an “interest in or other authority over a financial account (bank, securities, or other) in a foreign country.” Flag filled in the line to inform the IRS that it has financial interests in the United Kingdom and Australia. What are Flag’s financial interests in the United Kingdom and Australia? More importantly, how are they moving this money, and declaring these movements to the appropriate authorities, given these movements are between foreign entities?

In Part V of Flag’s 2014 and 2015, Flag checked “No,” indicating that it no longer had an “interest in or other authority over a financial account (bank, securities, or other) in a foreign country.” What happened to Flag’s financial interests in the United Kingdom and Australia?

In examining the 2013-2015 990-T’s, my personal view is that Flag’s stated costs for building improvements are either padded or excessive. For example, NOVA HRC is the firm that does the actual renovations on Scientology’s buildings (as well as many other clients). In the NOVA portfolio we have two hard data points:

1. Nova gives a project cost of $18,000,000 to renovate 393 guest rooms at the Ritz Carlton in Laguna Niguel, California. This is $45,801 per guest room.

2. Nova gives a project cost of $27,000,000 to renovate 220 guest rooms Flag’s Fort Harrison hotel. This is $122,727 per guest room. This seems utterly absurd and suggests, in my opinion, that the IRS should open an inquiry into why Scientology spends so lavishly on parishioner guest rooms. Scientology orders its parishioners to stay at Flag hotels and does not have to compete with secular hotels, so why the excessive spending?

In the Flag tax returns we see approximately $80,000 spent on exercise equipment for two properties. Additionally, their 2013 990-T form states that they spent some $14,296,680 on “improving” the Sandcastle Restaurant, used for public dining. For this money, it better be “Nobu” quality in food and atmosphere! The price mark-up on restaurant fixtures, as well as the same convoluted permitting process as that of the construction industry, are rife with the same potential for what seems to be excessive spending. What exactly is going on inside of Scientology and Nova that seems to be driving up renovation costs as compared to lower costs in the secular marketplace?

On a final note, even with the opening of the Super Power building on November 17, 2013 the Flag Land Base does not appear to have “boomed” whatsoever as a result of this edifice. Valued at $80,000,000, the Church of Scientology raised $145,000,000 for the project. Where did all the extra money go?

— Jeffrey Augustine

Flag Service Organization IRS 990-T forms 2008-2015

FSO Book Value 2015 $257,506,278

FSO Book Value 2014 $241,134,104

FSO Book Value 2013 $218,154,319

FSO Book Value 2012 $290,655,686

FSO Book Value 2011 $210,075,914

FSO Book Value 2010 $251,896,300

FSO Book Value 2009 $246,516,017

FSO Book Value 2008 $234,764,273

Criminality and the Church of Scientology


James Kirchick’s recent op-ed in the Los Angeles Times asks, “In the world of religious tax exemptions, does Scientology measure up?”

Kirchick incisively cuts right to the bone:

Today, America’s recognition of Scientology as a religion stands as an anomaly in the Western world, the result not of impartial jurisprudence but of harassment. Four years ago, France’s highest court upheld a fraud conviction against the church, ruling that, “Far from being a violation of freedom of religion, as this American organization contends, this decision lifts the veil on the illegal and highly detrimental practices.”

Kirchick is quite correct in taking the matter of Scientology directly to the matter of criminality. Since it’s inception in 1954, the Church of Scientology has at all times operated as a criminal organization. A straightforward historical reading of L. Ron Hubbard and Scientology’s machinations, plans, and designs will bear this out. Fair Game. The Guardian’s Office. Conspiracy. Domestic espionage. Tax evasion. Infiltration. Theft. Spying. Blackmail. Coercion. Money laundering. OSA. Phony front groups. Private investigators. Forced interrogations. Beatings. Agents provocateurs. Hacking computers. It’s all there. Scientology is a classic criminal organization.

The FBI raid of July 8, 1977 on Scientology was massive; over 150 agents participated. The raid was the direct result of L. Ron Hubbard’s Program Snow White. A demonstration of Scientology’s criminality writ large, Program Snow White brought Mary Sue Hubbard to ruination:

Russia

June 2017: The Russian Federal Security Service (FSB) conduct a raid on Scientology’s Moscow Headquarters.

The Russian Federal Security Service (FSB) has raided Scientology Orgs numerous times. From the Moscow Times of June 7, 2017:

The headquarters of the Church of Scientology in St. Petersburg has been raided by Russia’s Federal Security Service (FSB) on June 6 according to the MediaZona news site. The security services accused the Church of extremism, inciting hatred, and operating an illegal business.

Hungary

Hungarian Police during the raid of Scientology’s Budapest Headquarters.

On October 22,2017 — a scant three weeks ago — The Daily Mail reported on the massive raid of Scientology made by Hungarian police:

Hungarian police carried out a search at a Church of Scientology centre in Budapest amid a probe into suspected misuse of personal information and ‘other crimes’.

More than 50 officers surrounded the church’s Budapest headquarters on one of the Hungarian capital’s busiest roads early on Wednesday.

Detectives from the National Investigation Bureau have listed the target as ‘unknown persons’ – a common designation when a specific suspect has not been identified.

In terms of comparison, 156 FBI agents participated in the raid of Scientology’s Los Angeles complex, such was the sheer volume of documents Scientology had stolen from the US government. For Hungary to send in more than 50 police officers to raid Scientology offices there indicates the seriousness and scope of the criminal investigation.

Cover Ups of Rapes and Child Sexual Abuse

The criminality of Scientology extends to the cover ups of rape and child sexual abuse. At this writing, Scientologist Danny Masterson is alleged to have committed four rapes that were covered up by the Church.

Danny Masterson and Netflix co-star Ashton Kutcher at the 2017 CMT Music Awards in June. Photo by Jason Davis/WireImage.

The Los Angeles Police Department & The Los Angeles District Attorney’s Office

Scientology’s hideous reputation has tainted the Los Angeles Police Department as well as the Los Angeles District Attorney’s Office. People are asking why the case against Danny Masterson is not moving forward despite “overwhelming evidence” as reported by the Huffington Post. Netflix has even come in for criticism as it has not stopped production of its series The Ranch in which Masterson stars. As reported by the Los Angeles Times:

A woman who previously accused actor Danny Masterson of rape — an allegation he has denied — has gone on the record to criticize Netflix for continuing with his show “The Ranch” even as it has severed ties with Kevin Spacey and Louis C.K. after allegations of sexual misconduct.

“For me, what Netflix has done feels like a continuation of how the Church of Scientology made me feel when I reported my rape to them, as well as how Danny Masterson made me feel when I would beg him for an apology, an explanation, anything,” Chrissie Carnell Bixler told the Daily Beast. “I was made to feel unimportant. I was made to feel like I didn’t matter.”

Leah Remini’s Emmy award winning A&E show Scientology and the Aftermath has given courage to many of Scientology’s victims who were in the shadows. Terrified of incurring Scientology’s vengeance for speaking out, these people are no longer afraid. Even as the mask is being ripped off the sexual abuse and culture of cover-ups in Hollywood and Washington D.C., the same is happening to Scientology. The predators are being named and called out.

Revoke Scientology’s Tax Exemption Now

The Church of Scientology is able to ply its evil trade only because its ill-gotten 1993 IRS tax exemption. According to Doug Frantz’s seminal 1997 article in the New York Times
Scientology’s Puzzling Journey From Tax Rebel to Tax Exempt it appears that then IRS Commissioner Fred Goldberg unfairly rigged the examination in favor of Scientology. As Frantz noted in his article:

Scientology entities were required to submit new applications for exemption, which were to be evaluated by the agency’s exempt organizations division. But something unusual occurred there, too.

Mr. Schoenfeld, the negotiations chairman, ordered the two tax analysts assigned to the review not to consider any substantive matters, according to I.R.S. memorandums and records in the Tax Analysts case. Those issues, Mr. Schoenfeld informed them, had been resolved…

Both analysts, Donna Moore and Terrell M. Berkovsky, wrote memorandums specifying that they had been instructed not to address issues like whether the church was engaged in too much commercial activity or whether its activities provided undue private benefit to its leaders.

IRS tax analysts were forbidden from considering substantive matters. Why did Commissioner Goldberg give such an order? This seems to be a serious violation of IRS rules. Did Commissioner Goldberg violate the US Constitution he was sworn to uphold?

As the 9th Circuit Court noted in Sklar v. Commissioner, the IRS expressed an unconstitutional denominational preference for Scientology by granting it tax exemption:

The Supreme Court has developed a framework for determining whether a statute grants an unconstitutional denominational preference. Under that test, articulated in Larson v. Valente, 456 U.S. 228, 246-47, 102 S.Ct. 1673, 72 L.Ed.2d 33 (1982), the first inquiry is whether or not the law facially discriminates amongst religions. The second inquiry, should it be found that the law does so discriminate, is whether or not, applying strict scrutiny, that discrimination is justified by a compelling governmental interest. Applying this test to the policy of the IRS towards the Church of Scientology, the initial inquiry must be whether the policy facially discriminates amongst religions. Clearly it does, as this tax deduction is available only to members of the Church of Scientology…

Because the facial preference for the Church of Scientology embodied in the IRS’s policy regarding its members cannot be justified by a compelling governmental interest, we would, if required to decide the case on the ground urged by the Sklars, first determine that the IRS policy constitutes an unconstitutional denominational preference under Larson, 456 U.S. at 230, 102 S.Ct. 1673.

It is time for acting IRS Commissioner David Kautter and Secretary of the Treasury Steven Mnuchin to jointly call for an investigation into Scientology’s tax exemption. Scientology engaged in fraud and misrepresented material facts to the IRS to gain its tax exemption. The 9th Circuit opined in Sklar that the IRS granting Scientology tax exemption constituted an unconstitutional denominational preference.

Since gaining tax exemption Scientology has continued to engage in violations of public policy, bad faith, lies, and psycho-terrorism all funded by tax exempt dollars. This is an outrage. The illegality doctrine clearly applies in the case of the Church of Scientology:

HuffPost: Trump Thinks Scientology Should Have Tax Exemption Revoked, Longtime Aide Says

HuffPost: Trump Thinks Scientology Should Have Tax Exemption Revoked, Longtime Aide Says

Quite an article today in the Huffington Post in which Leah Remini figures prominently:

President Donald Trump believes the Church of Scientology should have its tax exemption revoked, a longtime family aide and current top official at the Department of Housing and Urban Development told an actress and producer in May.

In an unsolicited Twitter message, Lynne Patton, who has worked for the Trump family since 2009, told actress Leah Remini of Trump’s position and said she would interface with the IRS directly to seek more information in an effort to initiate revocation. Remini sent HuffPost copies of Patton’s messages and has declined to comment further…

Leah won an Emmy for her A&E show Scientology and the Aftermath. Leah has influence in Washington DC. All “VGI’s” (Very Good Indicators) as they say in Scientology.

US Bankruptcy Court Ruling: Scientologists Matt and Kathy Feshbach Cannot Discharge $3.8 Million in Income Taxes

Fessbachs

An excellent article in Forbes by Jay D. Adkisson concerns Scientologists Matt and Kathy Feshbach. Adkisson’s article was the feature subject of a recent column Tony Ortega’s Underground Bunker. The community commentary was fascinating.

Essentially, the US Bankruptcy Court refused to allow the Fessbach’s to discharge $3.8 million in their Chapter 7 bankruptcy.

In her 40 page ruling, US Bankruptcy Judge Catherine McEwen cited both the Fessbach’s refusal to curb their lavish spending and large donations to their church (Scientology) as among the reasons for refusing to discharge their substantial tax debt via bankruptcy.

In September 2008, the Fessbach’s made an Offer in Compromise (OIC) to the IRS to settle their 2001 tax debt of $3.6 million for $120,000, this to be made in payments over 48 months. The IRS declined the Fessbach’s unreasonable offer to settle for pennies on the dollar of the amount owed.

Judge McEwen wrote:

Feshbach.1
The Fessbach’s made “in excess of $21 million in income” and yet sought to discharge $3.8 million in taxes owed. The court remarked that the Feshbach’s clearly had the money to pay their tax debt but did not do so. The Feshbach’s tried to claim their lucrative income as “phantom income” that they never really had. The court rejected their line of argument in its ruling:

US-v-Feshbach-Memo-on-Dischargeability

Note: Hover over the document with your pointer to get the control panel to appear.

The Bankruptcy Court’s ruling stands in stark contrast to the Feshbach’s 2011 declaration in which they represented themselves as veritable paupers:

Feshbach-Declaration.2011

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Keeping Up with Matt Feshbach.

Even during his Chapter 7 bankruptcy, Matt Feshbach was still promoting his “World Famous” Finance Seminar to his fellow Scientologists:


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In her 2017 ruling against the Feshbach’s, US Bankruptcy Court Judge Catherine Peek McEwen noted:

“…how does any portion of the Feshbachs’ half-million dollars-plus in charitable contributions aid them to repay their tax debt? If there’s an explanation, it wasn’t offered at trial. As a rule, it’s hard to imagine how giving money away would bolster an individual’s future income potential. And this case is no exception to that rule. The overwhelming majority of the Feshbachs’ charitable giving benefitted a church that happened to be one to which Mrs. Feshbach’s personal interests were directly tied. In fact, Mrs. Feshbach owned and operated her own mission, with the main purpose of “introduc[ing] people to what [her church’s religion] is.”Thus, it’s quite clear that there was no link at all between the hundreds of thousands of dollars that the Feshbachs donated to the church and Mr. Feshbach’s earnings, but rather, there was a direct link between the charitable spending and Mrs. Feshbach’s religious pursuits. The Court does not admonish the Feshbachs (or any other debtors) for supporting worthy charitable causes. However, “[i]f individuals choose to donate part of their income to charity, whether religious or secular, they must adjust their expenditures accordingly to live within the confines of their available income.”

Judge McEwen continued:

More to the point, the Feshbachs could have immediately reduced their tax debt by more than $1 million by simply canceling their personal vacations and giving up the rented house in Aspen. They could have saved a similar amount by dramatically reducing their unreasonable clothing allowance and foregoing charitable giving altogether. These are just a few of the available examples that prove the superficiality of their claimed inability to pay.

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Like Richie Acunto before them, Matt and Kathy Feshbach become bankrupt Scientologists. Richie Acunto’s $10 million dollar IAS trophy ignominiously wound up for sale on eBay. That money could have helped Acunto rescue his company Survival Insurance. See Tony Ortega’s excellent article The Scientologist who wouldn’t fly: The rise and fall of insurance mogul Richie Acunto. Likewise, the millions the Feshbach’s gave Scientology over the decades could have paid their income tax liability.

Matt Feshbach, the one time master of the trading world with his brothers and their “shorting against the box” strategy was ultimately financially ruined because he simply did not pay his income taxes when he had the money to do so. Feshbach claimed changes in the tax code were responsible but the court established that despite these changes Feshbach had the income to pay his tax bill.

The US Bankruptcy Court noted that the Feshbach’s could have paid their entire tax debt had they simply curbed their excessive and lavish spending on a luxury lifestyle. The Feshbach’s thought they could ultimately beat the IRS by going bankrupt. However, they lost that bet when the court found that the couple had, “willfully attempted to evade their tax debt within the meaning of 11 U.S.C. § 523(a)(1)(C).

Judge Catherine Peek McEwen will enter a separate final judgment in favor of the United States in this proceeding. Matt and Kathy Feshbach will have to pay the $3.8 million in back taxes they owe the IRS.

In the conclusion to her ruling, Judge Catherine Peek McEwen said something that both the Feshbach’s and the Church of Scientology itself should take heed of but never will:

Sometimes, as with the facts in this proceeding, it is tragically foolish to hold firm to a spend-money-to-make-money conviction. The Feshbachs made poor spending decisions, continually leading a life of excess in the face of serious, known financial obstacles. At all times, their primary concern should have been reducing their substantial tax debt. But as their immoderate spending choices show, they were far more focused on living in the lap of luxury. They would have been wise to heed the proverb which cautions that enough is better than too much. As it is, however, the Feshbachs’ misjudgment ultimately cost them complete relief. Having concluded that the Feshbachs willfully attempted to evade their tax debt within the meaning of 11 U.S.C. § 523(a)(1)(C), the Court rules that such debt is nondischargeable. Accordingly, the Court will enter a separate final judgment in favor of the United States in this proceeding.

“Enough is better than too much” is a lesson that the rapacious Church of Scientology will never learn. Wanting too much of everything — money, breaking up families, punishing people, using child labor and so many other things — is one of the main reasons why Scientology is collapsing.

Church of Scientology Hustling Donations in the Aftermath of Hurricane Harvey


As we reported in our previous post, The Church of Scientology has been caught red-handed in a social media fraud in which it used stock photos to pose as Scientologists. These fake Scientologists were then used to launch social media attacks on Leah Remini, Mike Rinder, A&E, A&E’s sponsors, and the courageous people who appear on Leah’s show Scientology and the Aftermath. This is a scandal and a disgrace for Scientology.

There is yet another Church of Scientology scam to cover today. For over a decade Scientology leader David Miscavige has claimed that the Scientology Volunteer Ministers formed the “largest independent relief force on Earth.” This has always been a lie and will always be a lie. However, Scientology still makes this claim:

The Scientology Volunteer Ministers program (VMs) was established by Scientology founder, L. Ron Hubbard, in 1976. Some 100,000 VMs in 120 nations helped more than 1.6 million people in the last year alone, making the Scientology Volunteer Ministers the largest independent relief organization on Earth.

Mike Rinder challenged this claim in an excellent post on Scientology’s Volunteer Ministers at his blog. Mike added this photo of the Scientology’s empty “Hurricane Harvey Relief Forces Headquarters” here in Los Angeles to support his criticisms. We see only two very bored members of the “largest independent relief force on Earth” seated on folding chairs nonchalantly texting:

IAS.HH.LA

I would add this: At the present time the IAS claims there are 130 Scientology Volunteer Ministers in the areas decimated by Hurricane Harvey. This is what the IAS posted on its website as of today August 31, 2017:

How does the “largest independent relief organization on Earth” only manage to get 130 people to the scene of a widespread catastrophe? Particularly when the IAS — Scientology’s slush fund with an estimated cash pile in excess of $1.5 billion — has made an emergency grant:

As brought to my attention by Collette James on Twitter, Scientology’s Volunteer Ministers posted a misleading tweet. This tweet used a photo of the Louisiana Rescue Group that was shot at by looters. The tweet and photo could mislead the public into thinking that Scientology’s Volunteer Ministers were somehow involved in this particular operation:

So to recap:

1. The Scientology Volunteer Ministers are not, and never were, the “largest independent relief organization on Earth.” And yet Scientology continues to lie about it and raise money based upon this false claim.

2. Scientology’s IAS has hoarded an estimated ~$1.5 billion in cash and does not need donations. Just a fraction of the the interest generated by the IAS cash hoard would pay for all 130 Volunteer Ministers that are allegedly  on the ground in the areas affected by Hurricane Harvey.

3. Scientology has been caught lying on social media in its attacks on Leah Remini’s show. Therefore, how do we know that Scientology is not lying about the number of Volunteer Ministers in the hurricane-stricken areas? That is the problem with Scientology’s habitual lying: Nothing it says can be taken at face value.

Please sign my petition at Change.org demanding that the IRS open an investigation into Scientology’s tax exemption.

4. I have seen photos of fewer than twenty VM’s in areas affected by Hurricane Harvey. There may be more faces to count; I just haven’t seen the photos. The IAS main page shows two photos in which only two VM’s are seen. The bald-headed VM appears in both photos; we see his back toward us in the photo (left) and his face in the other photo (right):

5. Because Scientology’s IAS has zero financial transparency we don’t know the size of the IAS “emergency grant.” It could be a very small and insignificant grant. I say this because, as a rule, Scientology Volunteer Ministers are expected to pay their own expenses to travel to and from the scene of a disaster. The IAS should publicly disclose on the record how much Scientology is actually spending to help. Absent disclosure, all IAS claims are meaningless. The IAS could have donated a token sum of $1,000 for all we know.

6. Scientology Volunteer Ministers largely function to get PR photos and videos so that Scientology can raise more money as they are doing now with Hurricane Harvey. Scientology is infamous for its disaster capitalism and has used everything from 911 to Whitney Houston’s death to raise money. Scientology VM’s literally walked over the backs of the dead at the Virginia Tech massacre to pitch a tent and get in front of cameras. See Radar’s story: First Photos: Scientologists Invade Virginia Tech Campus.

7. Here is a Scientology camera crew filming a staged VM event in Haiti:

8. While the Scientologists working on the ground are to be saluted for helping, they also know that their work is being done for “Church PR.” They will also be promoting Scientology at the scene of the disaster while giving Scientology touch assists.

9. Noticeably absent from Hurricane Harvey relief efforts is Scientology leader David Miscavige. Although Miscavige boasts about the VM’s he has never, to the best of my knowledge, actually volunteered at any disaster. This is odd considering that no less an eminence than former President Jimmy Carter routinely rolls up his sleeves and helps to build homes for Habitat for Humanity.

The Tale of Two Dueling Petitions

The numbers on the Change.Org petitions as of August 28, 2017 as of 12:15 AM PST tell the story:

6054 vs. 5304 signatures

Our petition is only 751 signatures away from passing Scientology’s petition:


But wait a minute! Scientology claims millions of members! And the Scientology’s “Stop Leah” petition began one week before our petition and had a 5,000+ signature head start. Our team began only one week ago and we are now closing fast on Scientology. Imagine it: Our team will soon  beat a $3 billion dollar Cult that has movie stars and a private Mafia.

See Tampa Bay Times coverage of the Dueling Petitions

My goal is hundreds of thousands or a million signatures for the IRS to open an investigation in Scientology’s tax exemption. Please spread the word. I think that everyone from Atheists to Evangelicals can agree that the Scientology Cult must be stripped of its IRS tax exemption.

Underground Bunker commenter Harpoona Frittata offered a trenchant analysis. The first two paragraphs must surely burn deep into David Miscavige’s deviant psyche:

The Church of Scientology Doesn’t Like My IRS Petition

In a Tampa Bay Times story published today, staff writer Tracey McManus covered the details of two dueling Change.org petitions. The first petition is mine and calls for the IRS to open an investigation in Scientology’s tax exemption. I am asking people to please read, sign, and share my petition. The petition and details are here.

IRS.Header

In the TBT article, Scientology spokesperson Karin Pouw attacked both myself and my petition. This attack occurred because I am going directly to the source of Scientology’s ability to ply its evil trade: Scientology’s ill-gotten 1993 IRS tax exemption.

If the Scientology Cult loses its tax exemption, then it is game over for this brutal, dishonest, and greedy business that masquerades as a religion. Scientology simply does not merit or deserve First Amendment religious protections.

The other petition was created by a young Scientologist; it calls for fascist censorship equivalent to book burning:


No one is stopping Scientology’s right of Free Speech and yet this Scientologist is calling for Leah Remini’s constitutional right of Free Speech to be revoked. This is typical Scientology hypocrisy. Scientology demands its rights and yet it insists that no one should ever have the right to criticize Scientology.

Scientology has published extensive and vicious “Fair Game” smear websites on Leah Remini, her guests, A&E, and companies that sponsor A&E’s programming. Scientology is using its Free Speech to engage in an unchecked frenzy of hysteria, hatred, lies, and paranoia. And yet Scientology wants the Free Speech of Leah Remini, her guests, and A&E taken away. This glaring double standard never occurs to Scientologists.

Scientology is even using fake bots paid for with tax exempt dollars to spam Twitter with hate tweets:

Cultus.Hystericus
The time is now for the IRS to open an investigation into Scientology’s undeserved, unmerited, and ill-gotten tax exemption.

Petition: We Demand the IRS Commissioner Begin an Investigation into Scientology’s Tax Exempt Status

Shocking But True: There are only three people in the entire US Government who can call for an investigation into Scientology’s tax exemption. I outlined this in my previous detailed article on the IRS. The cut-to-the-chase version for non-wonks was published by Tony Ortega.

Bottom Line: In order to maximize our collective power, we need to petition the IRS Commissioner John Koskinen to open an investigation into Scientology’s tax exemption. Accordingly, I am asking everyone to please sign and share my Change.Org Petition: We Demand the IRS Commissioner Begin an Investigation into Scientology’s Tax Exempt Status. You do not need to be a US citizen to sign the petition.

Leah Remini and Mike Rinder are doing an incredible job and we need to support their work. This petition is all about a call to action whereby we demand the IRS do its job and open an investigation into Scientology’s tax exemption.

Click here to go to the petition.

IRS Commissioner Mr. John Koskinen has the legal and statutory authority to open an investigation into the Church of Scientology’s 501(c)3 tax exemption. We demand Commissioner Koskinen open an investigation for the following reasons:

1. Scientology’s lack of corporate governance as it represented to the IRS in its 1023 application for tax exemption. David Miscavige is the managing agent of Scientology and has pierced all corporate veils. Scientology is the alter ego of David Miscavige and he wields unchallenged and dictatorial control.

2. Scientology’s refusal to grant refunds or repayments to dissatisfied members as it represented to the IRS in its 1023 application for tax exemption.

3. Scientology use of tax-exempt dollars to engage in harassing former members, critics, and journalists. One example is the use of tax-exempt dollars to create slanderous hate websites and videos against former members, critics, and journalists who speak out and expose Scientology’s inhumane practices.

4. Scientology’s internal cover-ups of child sexual abuse and rape as described by the very victims of the sexual abuse and rape.

5. Scientology use of tax-exempt dollars to hire private investigators to spy on, stalk, and harass former members, critics, and journalists who speak out and expose Scientology’s inhumane practices. This is Scientology’s malicious policy of Fair Game and it is funded by tax-exempt dollars.

6. Scientology’s abuse of US religious worker visas to recruit non-US citizens to work in the Sea Org. Once in the US, these non-Americans have their passports confiscated and are forced to work 100 hour work weeks for wages far below the poverty level. Sometimes these workers receive no pay at all for weeks or months on end.

7. Scientology’s use of onerous contracts of adhesion to strip Scientologists of their legal and civil rights.

8. Scientology’s use of child labor.

9. Scientology’s predatory fundraising practices and use of commission salespeople to raise money.

10. Scientology’s use of a system of brutal and inhumane gulags known as the RPF (Rehabilitation Project Force). The RPF is a thought reform camp used to crush dissent. People in the RPF are often imprisoned for years and are stripped of their civil and legal rights.

11. The forced breaking up of families by Scientology’s inhumane practice of Disconnection.