Tuesday, 27 March 2012

The 'Scientologist' and the Ponzi scheme

David Miscavige
Boss of  the pernicious cult known as 'Scientology'

(From 'The Universal Identifying Characteristics of a Cult,' David Brear, Axiom Books, copyright 2005)

False justification. In pernicious cults, a core-group of adherents can be gradually dissociated from external reality and reformed into deployable agents, and/or de facto slaves, and/or expendable combatants, etc., furthering the hidden criminal objectives of their leaders, completely dependent on a collective paranoid delusion of absolute moral and intellectual supremacy fundamental to the maintenance of their individual self-esteem/identity and related psychological function. It becomes impossible for such fanatics to see humour in their situation or to feel pity for, or to empathise with, non-adherents. Their minds are programmed to interpret the manipulation, and/or cheating, and/or dispossession, and/or destruction, of inferior outsiders (particularly, those who challenge their group’s controlling scenario) as perfectly justifiable.

Structural mystification. The instigators of pernicious cults can continue to organize the creation, and/or dissolution, and/or subversion, of further (apparently independent) corporate structures pursuing lawful, and/or unlawful, activities in order to prevent, and/or divert, investigation and isolate themselves from liability. In this way, some cults survive all low-level challenges and spread like cancers enslaving the minds, and destroying the lives, of countless individuals in the process. At the same time, their leaders acquire absolute control over capital sums which place them alongside the most notorious racketeers in history. They operate behind ever-expanding, and changing, fronts of ‘privately-controlled, limited-liability, commercial companies,’ and/or ‘non-profit-making associations,’ etc. Other than ‘religious /philosophical’ and ‘political’ movements and ‘secret societies,’ typical reality-inverting disguises for cultic crime are:

‘charity/ philanthropy’; ‘fund-raising’; ‘lobbying’ on topical issues (‘freedom’, ‘ethics’, ‘environment’, ‘human rights’, ‘women’s rights’, ‘child protection’, ‘law enforcement’, ‘social justice’, etc.); ‘publishing and media’; ‘education’; ‘academia’; ‘celebrity’; ‘patriotism’; ‘information technology’; ‘public relations’; ‘advertising’; ‘medicine’; ‘alternative medicine’; ‘nutrition’; ‘rehabilitation’; ‘manufacturing’; ‘retailing’; ‘direct selling/ marketing’; ‘multi-level marketing’; ‘network marketing’; ‘regulation’; ‘personal development’; ‘self-betterment’; ‘positive thinking’; ‘self-motivation’; ‘leadership training’; ‘life coaching’; ‘research and development’; ‘investment’; ‘real estate’; ‘sponsorship’; ‘bereavement/trauma counselling’; ‘addiction counselling’; ‘legal counselling’; ‘cult exit-counselling’; ‘financial consulting’; ‘management consulting’; ‘clubs’; etc.


Reed Elliot Slatkin (without wig, 2003)

A while back, I was contacted by a former adherent of ‘Scientology’ who, almost 10 years previously, had fallen victim to a Ponzi scheme ostensibly run out of Santa Barbara California by Reed Elliot Slatkin (married 2 children, b. 1949), a ‘Minister of the Church of Scientology.’ My correspondent told me that he found it very difficult to believe (after reading black propaganda posted about me on the Net) that ‘Amway’s’ apologists have not received their training in how to destroy critics, from within ‘Scientology’. I was directed to http://www.slatkinfraud.com/index.php. This is probably the largest body of accurate information available describing one the most-revealing, organized, financial crimes in 6 decades of shameful ‘Scientology’ history.

Reed Elliot Slatkin (with wig, circa 1995)

In 1986, Reed Slatkin (then aged 37, and whose involvement with ‘Scientology’ already stretched back 23 years) began illegally to acquire control over a capital sum which he eventually would pretend totalled approximately $600 millions.This was achieved by him posing as an ordinary man turned infallible capitalist superman – a wise ‘Investment Club Manager’ who (guided by the ‘ethics and spiritual technology' of his ‘religion’) always returned substantial profits for his ‘Club Members,’ no matter what the overall trading conditions were. Many of Slatkin’s (ultimate) victims were wealthy, low-level ‘Scientology’ initiates programmed to defer unconditionally to the imaginary moral and intellectual authority of high-level initiates; others were well-heeled Hollywood types.

Unfortunately, exactly like Bernie Madoff, Slatkin was nothing more than an economic alchemist - a once-penniless nobody: turned self-proclaimed financial guru who, despite the huge amount of cash he handled for (ultimately) 800 listed ‘investors,’ was not even registered with the US Securities and Exchange Commission. Unlike Madoff, Slatkin completed many trades, but these were generally disastrous and his losses quickly grew to monumental proportions. At first glance, I assumed Slatkin to be a typical narcissistic charlatan who squandered his bedazzled victims' money on bedazzling toys, and who didn’t have the beginnings of a clue what he was doing. However, I then discovered that Slatkin did not really display the trappings of wealth whilst many of the failing ‘partner’ companies which he recklessly continued to pour his victims’ money into, were created and run by his fellow core-‘Scientologists’ (some of whom had previous convictions for fraud http://www.slatkinfraud.com/companies_2.shtml).  This aspect of the Slatkin affair immediately put me in mind of Mel Brooks’ 1968 comedy film, ‘The Producers,’ in which the two central characters, ‘Max Bialystok’ and ‘Leo Bloom,’ stage a financially-suicidal 'Nazi'-themed Broadway musical (‘Springtime for Hitler’) in order to cheat their elderly (mostly Jewish widow) ‘investors.’

Smiling Reed  Slatkin, the perfect 'Scientology' family man (with wig, circa 1997)

During 15 years, Slatkin was extensively promoted by 'Scientology' propaganda as a glowing example of the limitless prosperity, freedom, health and happiness which unquestioning adherence to the 'Church' brings. Meanwhile, he succeeded in maintaining an absolute monopoly of information about his own financially-suicidal tragicomedy - issuing countless fake ‘account statements’ and actually paying out what he arbitrarily defined as ‘profits’ to privileged ‘investors’ by using authentic cash taken from fresh victims. In total, he paid  $279 millions to a group of persons who had apparently originally given him a total of only $128 millions to investment. In this way, between January 1st 1986 and April 30th 2001, Slatkin passed more than $151 millions of stolen funds to 75 (apparently independent) individuals many of whom were core-‘Scientologists.’ A second (slightly larger) group pocketed $44 millions. If we just take one example, Joel Kreiner, ‘Scientology’s’ primary tax attorney, received a whopping $5 866 583. (http://www.slatkinfraud.com/trustee_report_75list.htm  http://www.slatkinfraud.com/75_final.htm).

Well into this period, by chance, Slatkin became involved in the creation of a truly successful company, the Internet service provider, 'EarthLink Inc.' Sadly, this fluke only served to enhance his unwarranted reputation as a shrewd businessman on the cutting edge of technology. Thus, drawing more victims into his pay-to-play game of make-believe. Evidently, 1986-2001, no agent of law enforcement ever asked Slatkin the one blindingly-obvious question which would have immediately revealed what he was doing:

'Excluding your own documentation, what quantifiable evidence can you produce to prove that your alleged investment fund has had any significant or sustainable source of revenue other than its own alleged investors?'

By the spring of 2001, the flow of cash was finally drying up. A few already mildly-critical victims had begun to smell a rat when Slatkin (who couldn't pay them their fictitious ‘profits,’ let alone refund their so-called 'investments') began behaving strangely and stalling for time. He was now escorted by an echelon of aggressive bodyguards. After failing to act on complaints for more than 12 months, the SEC finally strolled in - filing a civil enforcement action, freezing Slatkin’s remaining assets. Simultaneously, the FBI executed criminal search warrants and quickly discovered that Slatkin’s miraculous, ever-growing ‘investment fund’ was indeed a classic Ponzi scheme, without any significant or sustainable source of external revenue other than its victims. By this late stage, the bogus business was in deficit to the tune of $255 millions. Furthermore, the FBI found that Slatkin had gone to the most extraordinary lengths - including the creation of a fictitious ‘Swiss bank, NAA Financial,’ - to conceal the truth, obstruct, and/or divert, the SEC investigation and continue to commit fraud. 

Confronted with reality, Slatkin gave himself up, but when he was interviewed by SEC lawyers, much to their amazement (in response to a standard question about his educational qualifications, or rather lack of educational qualifications), he calmy explained that he was a 'Certified Dianetics Auditor' and he treated them to a deeply-mystifying, extended lecture on his ‘Scientology Beliefs and Ethics,’ recounting his 38 years in ‘Scientology.’ This remarkable testimony included how Slatkin:

- (as a 14 year old boy in 1963) was recruited into the organization by his uncle, after the sudden death of his father.

L. Ron Hubbard playing the Lord of Saint Hill Manor

- (before graduating from High-School) travelled to the UK to study ‘Spiritual Technology’ at Saint Hill Manor under L. Ron Hubbard himself.

- (in his late teens) was involved in the setting up of Hubbard’s ‘Sea Organization’  in Scotland, but was deported from the UK, and his passport confiscated, when the UK Minister for Health declared ‘Scientology’ to be a public danger.

During the SEC interviews, Slatkin (without the slightest embarrassment) proudly recited from the comic-book ‘Scientology’ fiction as though it was fact; demonstrating that he was still the deluded de facto agent of its authors. However, during his trial (more than 2 years later) his lawyer stated that it had taken a while to ‘deprogram’ his client, but now Slatkin accepted that he’d  been acting under the influence of ‘Scientology.’ http://www.slatkinfraud.com/depo_jan.htm

Reed Slatkin (with wig, but without smile).

On September 2nd 2003, after pleading guilty to mail fraud, wire fraud, money laundering and obstructing justice, Slatkin was sentenced (by California Judge, Magaret Morrow), to serve 14 years in a federal prison. Although ‘Scientology’s’ attorneys subsequently maintained that Slatkin’s explanation of his behaviour was rejected out of hand by Judge Morrow, she actually felt obliged to state before sentencing that:

‘The Court does not discount the importance of the Church (‘Scientology’) in his (Slatkin's) life and that it colored his judgement.’

Daniel W. Jacobs

During the trial, and sentencing, a claque of  ‘Scientologists’ in civilian dress had queued to be  first into the courtroom. They all smirked and sniggered in unison, acting as though Slatkin’s attorney was a crazy conspiracy theorist, each time he had made the slightest reference to his client being programmed. A highly-convenient witness (and long-time ‘Scientologist’) Daniel W. Jacobs (b. 1946), testified (under oath) that Slatkin had met with him in a restaurant in 2001 and openly boasted about  having:-

- millions of dollars stashed away in gold, art works, etc.
- a plan to ‘implicate Scientology.’

Jacobs (who described himself as a ‘financial consultant’) had, in fact, made a prior agreement with the prosecution. In return for his co-operation and guilty plea, he would receive a derisory 4 month prison sentence for conspiracy to obstruct the SEC investigation. Jacobs admitted that, for 12 months, he had posed as a representative of Slatkin’s fictitious ‘Swiss Brokerage.’ He had assisted in the production of fake ‘Swiss account statements’ and running fake ‘Swiss telephone numbers,’ all of which were designed to fool victims and regulators into believing that a reputable overseas financial institution held hundreds of millions of dollars of missing cash. Tellingly, Slatkin’s alleged stash has never been traced, and (in direct contradiction to Jacob’s statement) the quantifiable evidence proved that Slatkin had paid $1.7 million of his ill-gotten gains directly to ‘Scientology’ groups, and that he had facilitated the channelling (via favoured ‘investors’ who were ‘Scientologists’) of an unspecified amount to corporate structures affiliated to ‘Scientology.’ Indeed, in November 2008, it was reported that a ‘Scientology’ attorney, David Schindler, had ‘negotiated a compromise’ with Alexander Pilmer, an attorney acting for Slatkin’s bankruptcy trustee, R. Nodd Nielson, in which ‘Scientology’ agreed to pay back $3.5 millions to victims. After being in receipt of bundles of cash for 15 years (apparently in total ignorance that it was stolen), the leadership of ‘Scientology’ suddenly pronounced the ‘Excommunication’ of Slatkin, and all the many references to him as a glowing example of a ‘Scientology’ success story, have been removed from the organization’s propaganda. To date, no further investigation has been pursued against the leadership of ‘Scientlogy’ by the US authorities regarding this affair. The buck stopped with Slatkin and five associates, even if the bucks didn’t.

Jason Beghe

It doesn’t take a genius to spot the (underlying) similarities between the two (apparently diverse) groups most-commonly referred to as ‘Amway’ and ‘Scientology.’ For anyone who has encountered inflexible ‘Amway,’ proselytizers in his/her own social circle, but who still finds this unpalatable analysis difficult to digest, I would suggest that he/she reads any of the testimonies of the heartbroken friends and relatives of core-‘Scientologists’ who have been exposed to (what the original author of the ‘Scientology’ myth arbitrarily defined as) ‘Disconnection.’ Better still, take a look at the frighteningly familiar testimony of Jason Beghe (the Hollywood actor and former poster-boy for ‘Scientology’) who now accepts that (during a period spanning more than 10 years) he was tricked into believing that he was making a free-choice to hand-over around $1 million to a gang of racketeers posing as the philanthropic leadership of  the ‘Worlds Fastest-Growing Religion/Self-Betterment Movement.’

Although the flock of apparatchiks at the ‘Scientology’ Ministry of Truth steadfastly pretend that there has never been a doctrine of ‘Disconnection’ in their ‘Church’ and that ‘Scientology’ brings families together, it is a matter of public record that anyone challenging the authenticity of ‘Scientology’ has always been systematically categorized, condemned and excluded by it, as a ‘Suppressive Person’ (‘S.P’) – a negative threat to redemption with whom positive ‘Scientologists’ must break all contact, because only total belief leads to freedom, enlightenment, health, happiness, prosperity, etc. Obviously, by making total belief a prerequisite of redemption, adherents are drawn into a closed-logic trap (i.e. failure to achieve redemption is solely the fault of the individual who didn’t believe totally). Indeed, a growing list of courageous dissidents (who have refused to be intimidated or bought off) confirm that the more cash an individual coughs up to climb in the endless ‘Scientology’ pyramid of ‘Secret Knowledge:’ the more outrageous and extreme the group’s closed-logic controlling-scenario becomes. According to Hubbard’s most-paranoid fantasies: High-level, ‘Scientologists’ transform into immortal, intellectually and physically superior ‘Homo Novis’ (the next stage in human evolution), whilst ‘Wogs’ (the derogatory  ‘Scientology’ jargon for Homo Sapiens) remain inferior, mortal animals - the unenlightened pawns of an ‘Evil Extraterrestrial Ruler, Xenu.’ ‘Scientologists’ alone represent a protective force of enlightenment, purity and absolute righteousness. They are super-humans on a ‘Mission to Clear Planet Earth’ and, thus, ‘Save our Sector of the Galaxy from Destruction.’

No matter how absurd and impossible their comic-book model of reality might seem to outsiders, all active core-‘Scientologists’ unconsciously accept that it is perfectly justifiable to ‘lie, cheat and destroy,’ because they have a higher moral purpose… they alone are engaged in a never-ending war against evil.

Once the unoriginal, dualistic fiction modifying the behaviour and personalities of core-‘Scientologists’ is understood, the crimes of deluded adherents like Reed Slatkin are revealed in an entirely different light; for 'Scientology' is a counterfeit culture in which the traditional concepts of right and wrong have been overturned and made absolute. 

David Brear (copyright 2012)

'Amway' footnote to the Slatkin affair.’

Jodie Bernstein

I’d like to thank Robert Fitzpatrick (President of Pyramid Scheme Alert) for drawing my attention to the fact that Ms. Joan 'Jodie' Bernstein (Director of Consumer Protection at the Federal Trade Commission, 1997-2002) was solicited by the St. Louis-based law firm, Bryan Cave LLP, and that (in her new, much more highly-paid capacity) she then enthusiastically lied to her former colleagues at the FTC on behalf of the ‘Amway’ mob - arguing that there was no need for government regulation of her client in particular, and of ‘Multi-Level Marketing’ in general.

Gerald E. Boltz, former SEC official
Gerald E. Boltz (d. 2006)

It will probably come as no surprise to readers to learn that Bryan Cave LLP has also defended Reed Slatkin. Indeed, the late Mr. Gerald Boltz (a former Securities Exchange Commission Administrator) was also solicited by Bryan Cave LLP, and (in his new, much more highly-paid capacity) he then enthusiastically lied to his former colleagues at the SEC on behalf of Reed Slatkin, arguing (at the beginning of 2000) that there was no need to file a civil enforcement action to  freeze his client’s remaining assets. http://www.slatkinfraud.com/depo_jan.htm

In 2003, it was reported that Reed Slatkin’s bankruptcy trustee, R. Todd Neilson (a former FBI agent) had complained to US Bankruptcy Judge, Robert Riblet, that Gerald Boltz and his associates at Bryan Cave LLP had deliberately mishandled Slatkin’s case and, thus, permitted hundreds of individuals to continue to lose their money. Neilson argued that Boltz (as a former top SEC lawyer) should have immediately deduced that Slatkin was running a Ponzi scheme, but (inexplicably) he did not.

Bryan Cave LLP subsequently filed a ‘tentative settlement’ with the US Bankruptcy Court, in which the law firm denied any wrongdoing, but (all the same) offered to pay Slatkin’s trust $650 thousands to be distributed to its creditors. Limply, Bryan Cave LLP (a firm that promotes itself as being expert in financial fraud) posed as a wide-eyed victim totally deceived by Slatkin’s fake documentation. In any event, Gerald Boltz’ amoral defence was that, as Slatkin’s counsel, his duty was to his client: not to his client’s ‘investors.’

Bennetta Slaughter

For a while, in another obvious attempt to obstruct justice, a 'Scientology' agent called Bennetta Slaughter, tried to create a fake association to 'represent Slatkin's investors' http://www.slatkinfraud.com/slaughter.php. Immediately after his trial, Slatkin’s mystifying labyrinth of lies was so vast that it was still in process of being partially dismantled by Alexander Pilmer, the attorney acting for R. Todd Neilson. At this time, hundreds of Slatkin’s (ultimate) victims were owed around $240 millions, and more than 200 lawsuits had been filed to recover money from corporate structures and individuals who had profited directly from Slatkin’s crimes. However, Pilmer was also in negotiation with attorneys acting for another (even more-mystifying) labyrinth of lies. The leadership of ‘Scientology’ had profited indirectly from Slatkin’s crimes - receiving an unspecified number of payments (arbitrarily defined as ‘donations’) via an unspecified number of corporate structures (arbitrarily defined as ‘non-profit-making organizations’) and from around 75 individuals who headed the list of 'Scientologists' who had profited directly. For obvious reasons, Pilmer requested that all these ‘donations’ to ‘Scientology Groups’ (allegedly totalling many tens of millions of dollars) should be immediately declared and returned. After 5 years of wrangling, ‘Scientology’ coughed up a mere $3.5 millions, but this included $1.7 millions that Slatkin ‘donated’ himself.

However, many obvious questions have (apparently) never been asked by law enforcement agents - principally:

Since, out of the group of core-‘Scientologists’ who (over a period of 15 years) were proved to have received a total of $151 millions stolen by Slatkin (arbitrarily defined as ‘profits on investments’ ), a significant number were from the so-called ‘Sea Organization’ who are paid just $50 per week, where exactly did certain pious members of this poor ‘Scientology Religious Order’ suddenly acquire the odd quarter of a millions dollars (in cash) to ‘invest’ with Slatkin in the first place?

David Brear (copyright 2012)

Perhaps the sadest irony in all of this occurred 3 years after Reed Slatkin had been imprisoned. The City of London Police (which now runs an 'Academy to provide a centre of excellence for training in the prevention, detection and investigation of fraud and economic crime'

was infiltrated by 'Scientologists.' Indeed, Commander Kevin Hurley (4th in the overall hierarchy of command of the City of London Police, and a highly-esteemed officer with almost 30 years experience), thoughtlessly accepted an flattering-invitation to speak at the grand opening of 'Scientology's' new HQ in the City of London (Oct 2006). For a long time, the above photograph (designed to shut-down the critical, and evaluative, faculties of 'Scientology' adherents and all casual observers) remained plastered all over 'Scientology' propaganda. Commander Hurley subsequently retired from the police service in February 2011.  

A media investigation revealed that numerous City of London Police officers had foolishly accepted gifts worth thousands of pounds from the 'Church of Scientology.' http://www.dailymail.co.uk/news/article-417782/Police-officers-accepted-gifts-Church-Scientology.html. Some received free-invitations to a pay-to-enter charity dinner (with Tom Cruise as the guest of honour). Apparently, more than 20 wide-eyed officers were approached and groomed over a 15-month period. Unfortunately, it is quite conceivable that some, or all, of the £24 millions that was apparently used to acquire and equip 'Scientology's' impressive City of London HQ, derived from the vast capital sum which the Ponzi scheme (ostensibly run by Reed Slatkin) secretly generated for 'Scientology's' bosses in the USA, 1986-2001.

The City of London Police were recently involved in the 'complex' investigation of the Indian- born economic alchemist, Kautilya Nandan Pruthi who hid his self-perpetuating crimes behind just a few counterfeit corporate structures during a period of only 3 years. Next to the ongoing, major, global racketeering activity lurking behind the countless, fake front-groups comprising the 60+ year old totalitarian labyrinth known as the 'Church of Scientology,' Pruthi's relatively straight-forward £38 millions theft by deception, appears almost benign. 

David Brear (copyright 2012)

1 comment:

  1. What is truly frightening is knowing the various examples of how sociopaths running cults - whether Scientology or Amway - that you show here are but a tiny tip of the iceberg of what is going on deep within our system beyond what we can see. And the methods they use to not only enrich themselves, but purchase protection from any critics that could potentially shut them down is difficult to battle. They infiltrate through bribes (either cash "donations" or high-paying jobs) the influence they need to silence anyone who tries to expose them. Seems to be the way everything is run nowadays. We see it in our government with the lobbyists calling the shots. These foxes offer huge "campaign donations" or job offers after leaving office to the various officials supposed to be guarding the henhouse.

    It's so sad that any critics that they start to feel may actually be a real threat to them they have a limitless supply of ill-gotten money they can use to send a team of attorneys out to destroy, crushing them like ants, while bought officials like Goltz and Bernstein say "Aw, leave 'em alone". It's like the bad guys are armed with lies and bazookas and the good guys have only the truth and pea-shooters.

    Folks who will ask "how can Scientology or Amway be doing these supposed evil deeds all these years without getting shut down by now?" need only read your article above to see how. Evil armed with massive money and influence have power, even if they don't have truth on their side. And in a world where greed seems to run supreme, power will usually trump truth. Unfortunately.