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$1 Billion Fraud Suit Filed by Former Members

January 1, 1987 GMT

LOS ANGELES (AP) _ More than 400 current and former Scientologists filed a $1 billion suit against the church Wednesday, alleging efforts to compromise or pay off two Florida judges and siphon $100 million to foreign bank accounts.

The class action filed by attorney Lawrence Levy contends church officials or their representatives committed fraud and breached fiduciary duties. It says information obtained during purportedly confidential ″auditing″ sessions with a lie detector-like device is used ″for purposes of blackmail and extortion.″

The suit seeks an injunction and $1 billion in punitive damages plus unspecified general damages.

Defendants include Scientology leaders Ken Hoden and Heber Jentzsch; David Miscavige, chairman of Author Services, which publishes the works of the late Scientology founder L. Ron Hubbard; Mary Sue Hubbard, his widow; Hubbard’s estate; and more than 100 other unnamed individuals.

″The real fraud is that a handful of disgruntled former members who were 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,″ said Hoden, president of the Church of Scientology of Los Angeles.

″It’s sad, but not surprising, that they have now turned around and hired a church-busting mercenary in an unconstitutional attempt to hurt those who tried to help them years ago.″

Jentzsch, president of the Church of Scientology International, was out of town Wednesday and could not be reached for immediate comment, Hoden said. A secretary said Miscavige also was away from his office and unreachable for comment on New Year’s Eve.

The suit describes a purported November 1981 struggle to control church assets in which Miscavige allegedly locked up church leader William Franks ″in a room for several weeks while Miscavige assumed control of all corporate bank accounts and other assets.″

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

It similarly contends that thousands of dollars were ordered spent to “pay off” Florida State Circuit Judge James Durden, then presiding over a Scientology case.


Krentzman’s and Durden’s offices were closed on New Year’s Eve, telephone recordings said.

Church attorney John G. Peterson of Beverly Hills, one of the defendants in Wednesday’s lawsuit, denied any plot to lure Krentzman onto a boat with drugs and prostitutes, as the Clearwater Sun reported in 1984.

″Ben Krentzman is a respected judge,″ Peterson said then. ″There is no way we would ever in our wildest imagination dream that Ben Krentzman would get on a boat with drugs and prostitutes.″

Krentzman had ordered the sect to reveal the whereabouts of Hubbard, author of ″Dianetics″ and other Scientology tracts.

The lawsuit alleges that the church fraudulently misrepresented Hubbard’s background to suggest he was a nuclear physicist who had no interest in exploiting Scientology for personal gain.

In fact, it said, Hubbard had failed his college physics course, had a mail-order degree from a ″college which he created or owned,″ formed various Scientology organizations ″to solely make money through deceit and misrepresentation″ and defrauded the church of more than $100 million that Hubbard allegedly diverted to Liechtenstein bank accounts, $30 million of which remains in Hubbard’s estate.

Hubbard, 74, died last January on his San Luis Obispo County ranch after a brain hemorrhage, his doctor said. Coroner’s officials confirmed the body’s identity.