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$1 Billion Fraud Suit Filed by Former Scientologists

January 1, 1987 GMT

LOS ANGELES (AP) _ The Church of Scientology diverted $100 million to foreign bank accounts and tried to disgrace or bribe two Florida judges, say hundreds of past or present members in a $1 billion fraud suit.

The class-action suit filed Wednesday in Superior Court also alleges the church used information obtained from members during purportedly confidential counseling sessions ″for purposes of blackmail and extortion.″

Numerous suits have been brought in recent years by Scientologists claiming they were harassed, blackmailed or physically abused by the organization, whose late leader L. Ron Hubbard wrote the bestseller ″Dianetics.″


Ken Hoden, president of the Church of Scientology of Los Angeles and a defendant in the suit, called the allegations ″utterly false.″

It alleges David Miscavige, chairman of the firm that publishes Hubbard’s works, locked church leader William Franks in a room for several weeks in 1981 and ″assumed control of all corporate bank accounts and other assets.″

In April 1982, Miscavige ordered the payment of $250,000 to ″ ‘set up’ and frame″ U.S. District Judge Ben Krentzman of Clearwater, Fla., ″in a scheme to compromise him with drugs and prostitutes,″ the suit alleges.

It similarly contends that thousands of dollars were ordered spent to pay off Florida State Circuit Judge James Durden.

Both judges presided over Scientology suits.

No criminal charges resulted from either alleged plot. Krentzman’s and Durden’s offices were closed Wednesday, telephone recordings said.

A secretary said Miscavige also was away from his office and unreachable.

In 1983, the suit says, Miscavige and his attorneys ordered the payment of more than $1 million to frame prominent Boston lawyer Michael Flynn, a longtime foe of Scientology. Flynn also was unavailable for comment, his office said.

The suit also says Hubbard, who died last January on his San Luis Obispo County ranch at age 74, defrauded the church of more than $100 million, diverting it to bank accounts in Liechtenstein.

It seeks $1 billion in punitive damages plus unspecified general damages and alleges fraud and breach of fiduciary responsibility.

″The real fraud is that a handful of disgruntled former members who asked to leave the church over three years ago because they were unwilling to lead moral lives are attempting to use the courts and the media to extort money from the religion,″ Hoden replied.