Tilman's Note: This document is incomplete, but the full document is now available: Part one and part two.
This document is in three main parts, all of which consist of pages taken from the Church of Scientology's Form 1023 Application to the Internal Revenue Service for tax-exempt status, in connection with the settlement of its ongoing litigation with the IRS in 1993. That entire document is hundreds of pages long. The pages contained in this document concern litigation by and against the Church of Scientology and its affiliated organizations, as recounted by the Church of Scientology.. Note that those portions of the document which constitute the questions being asked by the IRS are in boldface in the original document, and they are shown in boldface here.
"Part One" of this document consists of pages 10-13 to 10-22. The IRS apparently requested a list of cases in which the organization had been involved. This appears to be the first submission, which is a list of cases, most of which are merely categorized without significant commentary, with certain significant exceptions. It starts in the middle of a sentence of what appears to be some COS commentary. "Part Two" is the applicant's response to Question 10 on the application, and consists of pages numbered 10-1 to 10-36. Question 10 is characterized in the applicant's answer as "relating exclusively to public policy questions, focusing on civil litigation involving the Church." It appears to be the second submission, prepared after the first submission (i.e., "Part One" above) was found insufficient. "Part Three" of this document consists of two pages, 1-3 and 1-4, which refer to a number of scientology-related organizations, with information supplied in response to an IRS request.
------------"PART ONE" IRS 1023 DOCUMENT------------- It also appeared that a settlement with the IRS would be possible, but after years of good faith efforts and cooperation by the Church in its efforts to settle with the IRS, agents in the Los Angeles IRS criminal Investigation Division and hardliners against Scientology in the National Office, such as Marcus Owens, sabotaged those efforts causing the negotiations to break down, as is covered in more detail later. The following is the list of the Flynn-related suits that were either dismissed or settled: Gerald Armstrong v.- Church of Scientology of California, et al., (cross-complaint), No. C 420 153, Superior Court of the State of California for the County of Los Angeles; Jose Baptista v. Church of Scientology Mission of Cambridge, No. Civ. 81010, Superior Court of the Commonwealth of Massachusetts; Mark D. Barron v. Church of Scientology of Boston, No. 5110, Superior Court, Commonwealth of Massachusetts; Donald Bear v. Church of Scientology of New York. et al., No. 81 Civ. 6864 (MJL), United States District Court Southern District of New York; Peggy Bear v. Church of Scientology of New York et al.; No. 81 Civ. 4688 (MJL) United States District Court Southern District of New York; Phillip Bride v. Church of Scientology of Portland. Church Of Scientology Mission of Davis. et al., No. A 8003-01189, Circuit Court of the State of Oregon, Multnomah County; Eileen Brown for Kevin Brown v. Delphian Fdn., et al. No. 81-435 (FBL); United States District Court of New Jersey transferred to the U.S. District Court for the District of Oregon on July 28, 1981; Toni a C. Burden v. Church of Scientology of California. et al., No. 80-501-Civ-T-K, U.S. District Court for Middle District of Florida, Tampa Division. Gabriel and Margaret Cazares v. Church of Scientology, No. 82-886-Civ-T-15 United States District Court Middle District of Florida, Tampa Division; Gabriel and Margaret Cazares v. Church of Scientology of California et al. 81-3472-CA-OI, Circuit Court Seventh Judicial Circuit Volusia County; John G. Clark. Jr. v. L. Ron Hubbard No. 85-356-MCN, United States District Court for the District of Massachusetts; Bent Corydon and Mary Corydon. Mark Lutovsky, Phil Black. Mark Chacon, Church of Sciologos v. Church of Scientology Mission of Riverside. et al., No. 154129, Superior Court of the State of California County of Riverside; Paulette Cooper v. Church of Scientology of Boston. Inc.. et al., No. 81 681 MC United States District Court, District of Massachusetts; Michael J. Flynn. Lucy Garritano, Steven Garritano, James Gervais and Peter Graves v. Church of Scientology of Boston. Inc., (counter-claim), No. 40906 Superior Court Commonwealth of Massachusetts; Michael J. 10-13 Flynn v. Church of Scientology of California. et al., No. 54258, Superior Court Commonwealth of Massachusetts; Michael J. Flynn v. Church of Scientology International. et al., CV 85-4853, United States District Court, Central District of California; Michael J. Flynn v. L. Ron Hubbard. Mary Sue Hubbard, Church of Scientology of California, No. 83-2642-C, United States District Court for the District of Massachusetts; Carol A. and Paul Garrity v. Church of Scientology of California. Mary Sue Hubbard. and L. Ron Hubbard, CV 81-3260 RMT (JRX), United States District Court Central District of California; Hansen, Marjorie J. v. Church of Scientology of Boston. Church of Scientology of California, No. 47074, Superior Court Commonwealth of Massachusetts; Betsy Harper v. Lafayette Ronald Hubbard, No. 65262, Superior Court Commonwealth of Massachusetts; Ernest and Mary Adell Hartwell v. Church of Scientology of California et al., No. 196800, Eighth Judicial District Court of the State of Nevada in and for County of Clark; Thomas Jefferson v. Church of Scientology of California. L. Ron Hubbard and Mary Sue Hubbard, CV-81-3261, United States District Court Central District of California; Deborah Ann Keck v. Church of Scientology of California. et al., CV-81-6060 R, United States District Court for the Central District of California; Dana Lockwood v. Church of Scientology of California. L. Ron Hubbard and Mary Sue Hubbard, CV-81-4109 CBM, United States District Court Central District of California; Nancy and John McLean. v. Church of Scientology of California. et al., No. 81-174- Civ-T-K United States District Court Middle District of Florida Tampa Division; Steven R. Pacca v. Church of Scientology of New York,_et al., No. 12076-81, Supreme Court New York County; Jane Lee and Richard Peterson v. Church of Scientology of California. L. Ron Hubbard. Mary Sue Hubbard, CV 81-3259 CBM (KX), United States District Court Central District of California; Patrick R. Rosenkjar v. Church of Scientology of California. L. Ron Hubbard. and Mary Sue Hubbard, No. 81-1350, United States District Court for the District of Columbia; Martin Samuels, v. L. Ron Hubbard, A8311-07227, In the Circuit of the State of Oregon for the County of Multnomah; Howard D. Schomer v. L. Ron Hubbard. et al., No. CV 84-8335, U.S. District Court, Central District of California; Michael W. Smith v. Church of Scientology of Boston. Inc. and Church of of California, No. 47236, Superior Court for the State of Massachusetts; Manfred Stansfield, Valerie Stansfield. Franklin Freedman et al. v. Norman Starkey. et al., No. CA 001 012, Superior Court for the County of Los Angeles; Lawrence Stiffler v. Church of Scientology of Boston and Roger Sylvester, No. 44706, Superior Court Commonwealth of Massachusetts; Gabor Szabo v. Church of Scientology of California and Vanguard 10-14 Artists International, No. C 312 329, Superior Court of California, County of Los Angeles; Janet Troy v. Church of Scientology of Boston and Church of Scientology of California, No. 41073, Superior Court Commonwealth of Massachusetts; Kim L. Vashel v. Church of of Boston and Church of Scientology of California, No. 47237, Superior Court for the Commonwealth of Massachusetts; Margery Wakefield v. Church of Scientology of California, No. 82-1313 Civ-T-10 United States District Court for the Middle District of Florida Tampa Division. Bent Corydon v. Church of Scientology International. et al., No. C 694401, Superior Court of the State of California, County of Los Angeles. Other Categories of Cases: Although the cases generated by Michael Flynn comprised the majority of tort litigation against the Church of Scientology between 1980 and 1986, there were some other cases that arose during the same period of time that were not entirely "Flynn" cases although they were generally of the same ilk. Flynn shared information, witnesses, tactics and sometimes acted as coordinating counsel for other attorneys involved in similar litigation against the Church. In other instances, while there was no apparent direct link between Flynn and a particular plaintiff or attorney in a suit, the similarity of claims and tactics suggests that these individuals or attorneys were copying Flynn's strategy. The following cases fall into this category: Alberto Montoya v. L. Ron Hubbard. Church of Scientology. et al., No. 450094 Superior Court of California, County of San Diego; Joan Edin v. Church of Scientology Mission of Davis. et al., No. 287191, Rita Engelhardt B. v. Church of Scientology. et al., No. C 312 692, Superior Court of California, for the County of Los Angeles. Each of those cases was dismissed. There are a few cases where Flynn's influence was felt that deserve separate discussion as they are cases that actually went to trial and were adjudicated. Christofferson: The Christofferson case was actually originally filed in 1977, prior to the period covered by the Service's question. In 1977, after taking a few elementary courses at the Church of Scientology Mission of Portland and working for a short time at another organization, Julie Christofferson was kidnapped and, over a four day period, deprogrammed to give up her religion by convicted felon Ted Patrick. She was 10-15 then turned over to attorneys by the anti-religion group involved so she could bring suit against the Church on a contingent fee basis. At trial, Christofferson's attorneys derided and distorted Scientology's beliefs and practices to such an extent that the Oregon state Court of Appeals overturned the $2 million verdict, finding that Scientology is a religion and that the trial had been rife with First Amendment violations. Upon remand, Christofferson's lawyers - by then FAMCO members -- applied Flynn's tactics and inflamed a jury into a $39 million verdict that led the trial court to declare a post-verdict mistrial in May of 1985. There never was another trial. The Christofferson case was part of the 1986 global settlement with Flynn. Wollersheim Larry Wollersheim had been in and out of churches of Scientology for over a decade before he finally left for good in 1979. While in the Church he was continually in trouble over his unethical business practices He filed suit against the Church for a variety of claims, Wollersheim v. Church of Scientology of California, No. C-332-027, in State Court in Los Angeles in 1980, represented by attorney Charles O'Reilly, a participant in the original FAMCO planning meetings. During the five month trial in 1986, O'Reilly applied the FAMC0 tactics and relied upon Flynn's stable of witnesses and obtained an absurd verdict of $30,000,000. While the Wollersheim case is still going through the appeals process, the jury verdict has been reduced to $2,500,000 from its original $30,000,000, and further appeals are pending. GO Criminal Activity Fallout Litigation: Another category of cases involved Guardian's Office members or stemmed from GO illegal activities. This included, for example, proceedings to compel testimony before a grand jury convened in Florida to investigate GO activities and an action by the State of Florida to disbar Merrell Vannier, an attorney who was also a GO operative and who violated the canons of ethics as an attorney. It was this kind of activity that was rooted out and condemned in the disbanding of the GO. Nonetheless a certain amount of fall-out litigation from the years of GO criminality had to be expected. Cases falling into this category -- i.e., cases which were not against the Church but which present allegations about the GO -are as follows: The Florida 10-16 Bar v. Merrell G. Vannier, No. 61,691, Supreme Court of Florida (Vannier was disbarred); Merrell and Francine Vannier v. Superior Court for the State of California. County_of Los Angeles No. 60 478, Supreme Court of California (Vannier lost an appeal against an extradition order); In re Charles Batdorf; United States v. Batdorf, No. 80 CV Misc (MM-188), United States District Court, Southern District of New York (Batdorf convicted); In re Grand Jury Proceedings (Mitchell Hermann, Peggy Tyson Richard Weigand, and Duke Snider), Nos. 80-5 Misc-T-H and 80-614 CIV-T- H, Municipal District State of Florida -- Tampa Division (investigation dropped); United States v. Stephen E. Poludniak, Libby Wiegand No. 80- 00143 CR (1), United States District Court for the Second District of Missouri (defendants plead guilty). The Mayo Cases: Mayo was removed from a senior post in 1982 due to unethical conduct and the discovery that he had altered Scientology religious practice and Scriptures. Mayo then left the Church and along with a few other ax- Scientologists established the Church of the New Civilization, dba Advanced-Ability Center, in Santa Barbara, California, where he delivered his own version of Scientology religious services to ax- Scientologists. He also sought the defection of Church members in order to build his membership. Mayo then acquired copies of certain confidential advanced Scientology Scriptures which had been stolen by some of Mayo's confederates from a Church facility in Denmark. As a result, in 1985, Religious Technology Center, Church of Scientology of International and Church of Scientology of California sued David Mayo and others in a suit alleging RICO causes of action based on the conspiracy to acquire the secret confidential materials of the Scientology religion and use them for the economic advantage of Mayo's organization and other related splinter groups. This litigation consists of the consolidated cases, including counter-claims, of Religious Technology Center. et al. v. Scott. et al., U.S. District Court (C.D. Dal. 1988), No. CV 85-711 JMI (Bx) and Religious Technology Center et al. v. Wollersheim. et al., U.S. District Court (C.D. Cal. 1985) No. CV 85-7197 JMI (Bx). Although this litigation is still ongoing, Mayo's Advanced Ability Center has long since ceased to operate and the various individuals who had been associated with it have for the most part scattered to different areas. The IRS has been supportive of Mayo's efforts. Mayo became an IRS informant during the CID investigation of the 10-17 mid-80's. Whereas Scientology organizations have been unable to obtain exempt status, the IRS granted exempt status to Church of the New Civilization - even though it had closed its operations and its sole remaining business was to contest this litigation. Further, much of this litigation is financed by wealthy psychiatrist Sarge Gerbode. In 1986, Gerbode formed a trust known as the "Friends of the First Amendment." The IRS granted exempt status to this anti-Scientology fundraising entity, and Gerbode has funnelled in excess of $1.4 million dollars to fund Mayo's litigation through that trust as charitable tax deductions for himself. The Aznaran/Yanny Litigation. Vicki Aznaran is the former President of Religious Technology Center and her husband, Richard, is a former Church staff member. Vicki was removed from her position by the Trustees of RTC in March 1987 as she had betrayed the trust of her position and was not acting in the best interests of the religion. By her own testimony, she first got in trouble when she sought to place an ex-GO criminal in RTC's personnel department. Vicki and her husband then left the Church after Vicki's removal. Joseph Yanny served as an attorney for RTC and various churches from 1983 until November of 1987. His primary contact with the Church was with RTC and Vicki Aznaran, with whom he developed a close personal relationship. After Vicki's departure, the new officers of RTC examined Yanny's performance, determined it to be sub-standard, and learned that he was a user of LSD. He was then discharged. Upon his termination, a billing dispute erupted between Yanny and the Church, and Yanny enlisted the aid of the Aznarans in supporting him in his billing dispute and, in exchange, acted as de facto counsel for the Aznarans in helping them prepare and file a lawsuit against his former clients. The Aznaran suit, Aznaran v. Church of Scientology of California. et al., U.S. District Court (C.D. Cal. 1988), No. CV 88-1786 JMI, was filed on April 1, 1988. Despite Vicki Aznaran's high ecclesiastical position as the head of RTC for a number of years, her suit portrays her as a victim who didn't know for all these years that she was really "brainwashed" and under "mind control" - plus the other stock inflammatory allegations that characterize this sort of litigation. It seeks $70,000,000 in damages and is still pending. Shortly after the Aznaran complaint was filed, Yanny 10-18 received from Vicki Aznaran a declaration by her as the former President of RTC supporting Yanny's claim that a retainer he received in 1985 was "non-refundable." Yanny used this declaration in his fee dispute over the retainer which is now in litigation along with claims against Yanny for his breach of his fiduciary duties. Even before the Aznaran case was filed, Al Lipkin, one of the agents who conducted the IRS's CID investigation in 1984 and 1985, was in contact with Yanny and the Aznarans. It was Lipkin who arranged for the Aznarans to be interviewed by Exempt Organizations agents from Los Angeles who were conducting an on-site review of Church records, ostensibly the final step in negotiations concerning tax exempt status for Scientology churches. The day after issuing summonses to the Aznarans to be interviewed and to produce documents relating to their lawsuit, the same agents issued document requests to Religious Technology Center asking RTC to produce Vicki Aznaran as a corporate officer of RTC. While the allegations of the Aznaran complaint serves as the purported reason for the summonses and interview, in reality the taped interview was a contrived setting for an IRS/Aznaran diatribe against the Scientology religion and L. Ron Hubbard, with the IRS agents urging the Aznarans to press their litigation and the Aznarans urging that the tapes of the interview be furnished to Lipkin and LA IRS CID. It was the Church's discovery of this event which precipitated the breakdown of the earlier negotiations between the Church and the IRS. Coincident with their interview with the IRS, the Aznaran's personal tax problems evaporated and their private investigation business was retained by Guess? Jeans -- the large jeans manufacturer that Al Lipkin befriended during an earlier IRS CID investigation (which also involved tampering with civil litigation and was the subject of a Congressional investigation). The Aznaran suit is still pending at this time and has not yet gone to trial. Meanwhile Yanny has pursued an agenda to cause as much harm as possible to the Church by repeatedly betraying his fiduciary duties as former Church counsel by providing information concerning the Church to the Aznarans and a number of other litigants against the Church, as well as to the IRS and the FBI. 10-19 Other Current Litigation: Several other suits are pending against Churches of Scientology that allege some form of tort claim. Although there are variations in the claims and different attorneys representing the plaintiffs, there is one common denominator underlying most of these suits: the influence of the Cult Awareness Network ("CAN"). CAN, which the IRS has recognized as exempt under section 501(c)(3) as an educational organization, is in fact a bigoted hate group that targets and tries to destroy churches and religions. CAN's principal activities are negative propaganda campaigns, covert dissemination of false information for purposes of subversion and acting as a referral service for deprogrammers on a fee sharing arrangement. Although complaints have been made to the IRS about CAN's continued exempt status in light of its true activities, no action has been taken. The Church of Scientology is presently CAN's principal target for attack, and CAN's favorite tactic is to spread false and defamatory information about the Church through all available means while holding itself out as an authority on the subject. When contacted by anyone with a complaint about the Church, CAN manipulates them to attack the Church either through the media or by referring them to an anti-Scientology attorney. The majority of the suits against Churches of Scientology recently filed and presently pending, that have not been otherwise discussed above, fall into this category. None has gone to trial. The following are cases instigated or influenced by CAN either directly or as a result of one of CAN's spread of false information: Terry Dixon v. Church of Scientology Celebrity Center of Portland. et al., No. 9010-08200 Multnomah County - Circuit Court of Oregon (in arbitration); John Finucane. David Miller. Alexander Turbyne v. Emery Wilson Corporation. et al., No. C 045216, Superior Court of the State of California for the County of Los Angeles (pending); Dorothy Fuller. an individual v. Applied Scholastics International. et al., No. 92K 11466, Municipal Court of the State of California for the County of Los Angeles (just filed); Lisa Stuart Halverson v. Church of Scientology Flag Service Organization, et al., No. 92K11186, Municipal Court for the State of California, County of Los Angeles (settled); Thomas and Carol Hutchinson v. Church of Scientology of Georgia, et al., No. D90315, Superior Court of Fulton County, State of Georgia (pending); Mark Lewandowski v. Church of Scientology of Michigan, et al., No. 10-20 91-421716-LZ, State of Michigan in the Oakland Circuit Court (pending); Peter and Francis Miller v. Church of Scientology et al., No. 027140, Superior Court for the State of California, County of Los Angeles (case abated re the Church and in arbitration re Sterling); Ted Patrick et al. v. Church of Scientology of Portland. et al., State Court of Oregon for the County of Multnomah (dismissed); Dee and Glover Rowe v. Church of Scientology of Orange County. et al., No. BC 038955, Superior Court of California (pending); Frank and Joan Sanchez v. Sterling Management Systems et al., No. 91-224-CV, 4th Judiciary District Court San Miguel County, State of New Mexico (pending); Thomas Spencer v. The Church. of Scientology et al., BC 026740, Superior Court of the State of California for the County of Los Angeles (settled); Irene Zaferes v. Church of Scientology, Superior Court of the State of California County of Los Angeles (dismissed); Jo Ann Scrivano v. Church of Scientology of New York et al., No. 87-1277, Supreme Court of the State of New York, County of Suffolk (in discovery stage); Marissa Alimata and Richard Wolfson v. Church of Scientology of California. etc. et al., No. C 650 988, Superior Court of the State of California, County of Los Angeles (judgment entered for the Church). Personal Injury, Medical-Related Suits: Another category of lawsuits involve claims by individuals who have been injured on Church premises or in some way attributed responsibility to the Church for an injury or death. For example, in the Rabel case listed below, a stereo speaker accidentally fell out of the window of a Scientology mission and hit someone on the street below. The case was settled. The Arbuckle case was brought by the parents of an individual who died while a parishioner of a church of Scientology. Although his death from kidney failure was traceable to his use of steroids, the case was settled to avoid expense of litigation. Each of this group of cases was either settled or dismissed. Mira Chaikin v. Church of Scientology. L. Ron Hubbard. et al., No. 81 Civ 7525, United States District Court of the Southern District of New York; Gary and Susan Silcock v. Church of Scientology. Mission of Salt Lake. et al., No. C 86-7213, Third Judicial District Court for the Salt Lake County, Utah; Rimando, Pedro H. Irene Marshall v. The Church of Scientology of San Francisco. et al., No. C 669015, California Superior Court, County of Los Angeles; Wendy and William Rabel v. Eric Rising. Jane Doe Rising. his wife: Church of Scientology Mission of University Way. et al., King County Superior Court, Washington State; Francine Necochea. a minor child, by her guardian Ad Litem 10-21 Cecilia Garcia v. Church of Scientology. et al., No. C 165360, California Superior Court for the County of Riverside; Roxanne Friend v. Church of Scientology International. et al., No. DC 018 003, California Superior Court, County of Los Angeles; Bruce and Lynnel Arbuckle v. Skip Pagel M.D.. Church of Scientology Celebrity Center Portland. et al., No. 8907-04119, Multnomah County, Oregon Circuit Court. A final category of lawsuits includes cases that have arisen out of financial or property disputes or transactions involving individual Scientologists, their businesses or creditors or organizations or individuals that Churches of Scientology or related organizations have had financial dealings with. Often the Church is named in such cases simply as a perceived "deep pocket" or as a tactic to try to coerce a settlement. Such cases are typically dismissed or settled. These cases are as follows: In re Dynamic Publications Inc., U.S. Bankruptcy Court in Maryland (settled); Gregory F. Henderson v. A Brilliant Film Company. et al., No. 164213, California Superior Court, County of San Joaquin (settled); Gregory F. Henderson v. Marvin Price. et al , No. 165165, California Superior Court, County of San Joaquin (settled); Peter Siegel v. Religious Technology_Center. et al., CV 89-5471, United States District Court, Central District of California (pending); Steve Dunning v. Church of Scientology, et_al., No. 060613, California Superior Court County of Los Angeles (dismissed with prejudice); Jeff and Arlene Dubron v. Church of Scientoloqy International. et al., No. NCC 29267B, Superior Court of California Burbank Division (settled); Sherry Fortune v. Church of Scientology American Saint Hill Organization and Chuck Tingley, No. C 099061, Superior Court of California, County of Los Angeles (dismissed as to the Church and settled as to Tingley); Vicki Adler v. American Sun, Inc.. Church of Scientology of Los Angeles, SWC 81874, Torrance Superior Court of California (settled); Benham v. Church of Scientology Celebrity Center of Dallas, No. 91-08216, 9th Judicial District Court, Dallas County (settled); Michael Burns v. The Recording Institute of Detroit. Inc.. et al., No. 91-412334-CZ, Oakland County Circuit Court, State of Michigan (pending); Clay Eberle and Eberle & Jordan Law Firm v. Church of Scientology of California, No. NCC 166486, Superior Court of the State of California, County of Los Angeles in the City of Glendale (dismissed in favor of the Church); Mario Metellus v. Church of Scientology of New York. Linda Barragabm No. 01133-89, Superior Court of the State of New York, County of New York (settled). 10-22 ------------"PART TWO" OF IRS 1023 DOCUMENT------------- Question 10 INTRODUCTION In the responses that follow, the Church is providing all of the information the Service has requested in the various subparts to Question 10. It is only fair, however, that the following responses be considered in their proper context, and for that reason we submit the following additional information by way of introduction. Question 10 relates exclusively to public policy questions, focusing on civil litigation involving the Church. There is no escaping the irony of being asked to catalogue the unsubstantiated allegations of civil litigation adversaries when those allegations often have been manufactured, promoted, disseminated, and even subsidized by a cadre of anti-Scientology individuals within the Service itself. The Church does not believe that the Service as an institution, hates Scientology. We believe there are and have been, however, a core of dedicated "Scientology-bashers" within the Service who have allied themselves with encouraged, and even fixed the tax problems of the principal sources of the tired civil allegations we are now being asked to chronicle. Question 10.e.i and 10.e.ii request a list of all of the tort allegations that have been made against any Church of Scientology in more than a score of cases arising within the last twelve years and for copies of all verdicts, decisions or findings made by any court that any of those allegations were true. As may be seen in the following responses, two of the only four cases where any such decision has been issued, and a majority of the other cases were instigated or heavily influenced by the Cult Awareness Network ("CAN"). CAN and its influence on the litigation in question was described in passing at page 10-20 of our response to Question 10 of your second series of questions. There is no escaping the fact that CAN has been able to survive financially and has drawn much of its false veneer of credibility from the Service's recognition of it as exempt under section 501(c)(3). CAN was formed in 1975, under its original name, Citizen's Freedom Foundation. CAN's activities, from its inception until today, have consisted of negative propaganda campaigns against nontraditional religious organizations and promoting and perpetrating "deprogrammings," a euphemism for kidnapping people and using force and coercion to dissuade individuals from maintaining their voluntarily held religious beliefs. CAN applied for tax exemption in March of 1976 as an educational organization. Literature provided with its 10-1 application' however, clearly evidenced CAN's biased views and its involvement in deprogramming. Indeed this material shows CAN's close association with Ted Patrick (one of its founders)' who has been convicted on numerous occasions for kidnapping, assault and related charges arising from his violent deprogramming activities. It was Patrick who touched off the premier tort case against Scientology when he deprogrammed Julie Christofferson in 1977. (This is further described at pages 10-15 and 10-16 of our response to Question 10 of your second series of questions and infra.) The IRS denied CAN'S initial application for exemption because "after reviewing your publications, we concluded that a significant portion of your viewpoints were not supported by relevant facts." CAN reapplied in 1977 but the application and CAN's accompanying literature showed that CAN had not reformed. Consequently, the Service again informed CAN that its application was being denied because "Your revised application for exemption contains disparaging statements about organizations which are not supported by facts. Your revised application indicates that the reasons for our denial of your previous application are still present." (Exhibit III-10-A). CAN did not give up. In July 1978, CAN submitted additional information to the IRS including a "Statement of Purpose, Functions and Activities" which included the claim that one of CAN's functions was to recommend personnel and facilities for deprogramming. CAN furnished the Service with an example of how CAN would handle a contact from a caller who intended to join the Church of Scientology: referral of the person to ax-members for negative information on Scientology and to an attorney in his or her area, as well as providing the person with a list of "Dos and Don'ts" which included advising the person to file complaints with the government. (Exhibit III-10-B). CAN identified the Church of Scientology as one of its principal targets and the Service granted CAN tax exempt status. (Exhibit III-10-C). >From that point forward until the present, CAN has followed the precise modus operandi concerning Scientology that it described to the Service in 1978. CAN refers individuals to ax-members for negative information about the Church and to attorneys who then create causes of action against the Church that almost always recite the same boilerplate tort claims. As will be seen in the response to Question l.e.i, a large number of the cases listed in that section have been filed by attorney Toby L. Plevin. Plevin is a CAN member who gets all of her client referrals from CAN in exactly the manner CAN described in its 1978 application supplement. CAN also continues to be involved in the felonious practice CAN calls deprogramming, which is as flagrant a violation of public policy as can be imagined. While CAN enjoys exempt status 10-2 its deprogrammers are being arrested and jailed by local police agencies and the FBI. Recently, CAN deprogrammers Galen Kelly and Bob Moore, and CAN attorney Robert ("Biker Bob") Point, were arrested by the FBI and charged with conspiring to kidnap Lewis DuPont Smith, heir to the DuPont fortune, and to "deprogram" him from his support of Lyndon LaRouche's political organization. (Exhibit III-10-D). At this writing there are several other CAN deprogrammers under indictment as a result of their deprogramming activities, including Joe Szimhart, Mary Alice Chrnaloger, Karen Reinhardt and Randall Burkey. (Exhibit III-lO-E). It is troubling that in the face of this kind of evidence individuals in the Service like Jacksonville District EO agent Melvin Though, continue to use CAN as an investigative arm to drum up false charges against the Church of Scientology. (Exhibit III-10-F). There are individuals in the Los Angeles IRS Criminal Investigation Division ("CID") who harbor sentiments about Scientology very much akin to those espoused by CAN, who have directly brought about or have had a major influence on Scientology-related civil litigation. Much of this information has been covered before or is covered in more detail in the responses to specific subparts of Question 10 that follow. Consider the following: * The decision in Gerry Armstrong's case is one of those described in detail in response to Question 10.e.ii. Armstrong's fanatical hatred of Scientology ingratiated him with the LA CID and earned him the status of IRS operative in an unlawful scheme to infiltrate and destroy the Church through, among other things, the seeding of Church files with forged or manufactured documents. Armstrong was a link between the CID and Michael Flynn, whose multi-jurisdictional litigation campaign against Scientology was encouraged and assisted by the CID. (See pages 10-8 to 10-16 of our response to Question 10 of your second series of questions). The allegations, first manufactured by Armstrong and Flynn, have been adopted and parroted by many of the other tort litigants whose cases are described in the response to Question 10.e(i). In exchange, Gerry Armstrong has been insulated from liability for his theft of Church documents and encouraged to continue and to expand his nefarious efforts. *The Aznarans, whose case was described at pages 10-18 and 10-19 of our response to Question 10 of your second series of questions, left the Church and filed suit for $70,000,000, 10-3 resulting almost immediately in their being embraced by the IRS CID. The CID agents then passed the Aznarans on to like-minded EO agents in Los Angeles who interviewed them, encouraged them to continue their attacks on Scientology, treated their claims as fact and used their allegations as a basis to throw five years of cooperation from the Church down the drain. A tax debt that the Aznarans had been unable to handle with the IRS for ten years disappeared when they became civil litigants against the Church and CID informants. *Question 10.e.iii asks for a description of the criminal case involving the Church in Canada, which is described in the answer to Question 10-e- (iii) and in a memo from counsel for the Church of Scientology of Toronto attached as Exhibit III-10-U. As that memo details, LA IRS CID agents fed information, allegations and witnesses to the Ontario Provincial Police ("OPP") and plotted with Armstrong, Flynn and OPP officers to bring about the "collapse" of the Church. CID agents traveled to Canada where they encouraged the OPP to bring indictments, offering to help locate L. Ron Hubbard and others in the Church if OPP moved forward with their case. The CID and OPP also utilized apostate David Mayo and his cronies to recruit ex-GO criminals as government witnesses to testify against the church and their former subordinates about crimes that they themselves had perpetrated. Mayo is further described below. * As early as 1969, a CID operative named Gene Allard was allowed to get off scot-free with the out-right theft of Church records. (See response to Question 10.d.1, infra.). * Laurel Sullivan, who left and became disaffected with the Church after she was removed from her Church post for being a Guardian's Office sympathizer, was embraced as an informant by the CID, and was represented by a government attorney when the Church sued her personally for improperly disclosing attorney-client information to the IRS. (See page 3-40 of our response to Question 10 of your second series of questions). * As described below apostate David Mayo gained favor with the IRS as an informant and IRS reciprocated by granting exempt status to his group in support of his anti-Scientology stance. This list could go on with example after example of times when some person or organization has manifested an anti-Scientology sentiment and has suddenly emerged as an IRS ally, operative or beneficiary. At that moment such a person or group is transformed into a fountainhead of unassailable virtue whose claims are gospel, whose protection is guaranteed and who is given unwarranted, improper encouragement and assistance. As described in detail below, while Churches of Scientology receive unprecedented scrutiny when they apply for tax exemption, apostates who sue the Church and attack the religion have been aided by IRS tax exemption subsidies. 10-4 An anti-Scientology sentiment has existed in the IRS National Office Exempt Organizations Technical Division, dating at least back to CAN's 1978 exemption. Certain EO Technical Division officials appear to have directly colluded with the CID in 1984 and 1985, using information gathered by the CID, including the statements and allegations of their informants, to sabotage the Church's exemption proceedings at that time. Evidence of their bigotry is best seen in their treatment of anti- Scientologists. David Mayo: David Mayo was removed from a senior Church position for moral turpitude. He was using his position for economic advantage. Even more serious from a Scientology perspective, he was the source of serious alteration and denigration of the technical scriptures of Scientology. Rather than atone for his misdeeds, he left the Church in 1982. Upon leaving, Mayo and a few others established an organization he called the Advanced Ability Center ("AAC"), which utilized a badly altered version of Dianetics and Scientology technology in an effort to lure parishioners away from the Church for economic advantage. For example, Mayo dropped the use of Scientology ethics technology altogether, eschewing ethics as an applicable concept. Solely for the tax advantages it would afford, he incorporated the AAC under the name "Church of the New Civilization" ("CNC"), but it operated solely as the Advanced Ability Center. Mayo's prime objective was to obtain copies of the confidential upper level scriptures so that he could represent that CNC/AAC could deliver the entire Bridge as it existed in the early 80's and thus attract a larger following. Mayo conspired with like-minded apostates in Europe and effected the theft of these scriptures on December 9, 1983 from AOSH EU &AF in Denmark. These events prompted the suit by RTC and the Church as described on pages 10-17 and 10-18 of our response to Question 10 of your second series of questions. Mayo also actively endeavored to lure Scientologists away from Scientology, including putting out a publication of negative propaganda on the Church. In 1984 CNC filed for tax exemption. The original application identified CNC's source of financial support to be "Fees received from parishioners for counseling." CNC's statement of activities stated that "The program of activities of [CNC] are limited to personal counseling and spiritual studies" and responded affirmatively to questions on whether or not recipients would be required to pay for counseling. Subsequently, Mayo gave an opposite answer to the question. Eventually, the 1023 application was forwarded to National Office for processing by Rick Darling who inquired further into CNC's fundraising methods. Mayo responded that "Parishioners receive spiritual enhancement and guidance from the Church in a program of services for which monies are given and received" to a question asking why parishioners would donate to CNC. 10-5 During the same time period Darling and Friedlander were considering the CNC application, they were using "commercialism" as a reason to deny tax exemption to various church of Scientology applicants. Their purported reason was that the Church charged fixed donations for services giving them a "commercial hue and purpose." Shortly after issuing adverse determination letters to the Scientology applicants, EO granted CNC's application on substantially identical information as to funding practices. Mayo had become a CID informant (Exhibit III-10-G) and Darling/Friedlander were now aware that Mayo was an enemy of the Church of Scientology. (Exhibit III-10-M). On March 27, 1986, David Mayo himself responded for CNC to a set of questions from Darling. In response to a question whether CNC charged fixed amounts for their services, Mayo provided information which contradicted CNC's 1023 record and was flatly impossible stating that CNC had "no predetermined price." (Exhibit III-10-M). Frank Gerbode: Psychiatrist Frank Gerbode is an heir to the Alexander Baldwin sugar fortune. He left psychiatry for Scientology in the 1970s and for several years was the mission holder of the Palo Alto mission. He ran afoul of Church management in the early 1980s when the Church tried to reform his financial misdealings. In March 1984, Gerbode left the Church to join up with David Mayo. He set up a parallel operation he also called Advanced Ability Center in Palo Alto which, for tax purposes, he named the Church of the Universal Truth ("CUT"). Gerbode's 1023 application, along with those of CNC and various Church applicants also went to Darling and Friedlander. The exemption applications for the churches of Scientology were denied; the applications for CNC and CUT were granted. While Darling and Friedlander asked endless intrusive questions of the Scientology applicants, they chose not to find out about CNC and CUT. For example, by the time they recognized CNC's exempt status, CNC had long since ceased operations. Mayo had cashed in its assets and deposited them in his personal Liechtenstein bank account and had gone to work for Gerbode at CUT. He essentially liquidated the corporation into his own pocket, even though it was a non-profit organization purportedly dedicated to section 501(c)(3) purposes. More specifically, the last known letter from Mayo to the IRS on the CNC exemption application is the one mentioned above, dated March 27, 1986. (Exhibit III-10-M). According to the deposition testimony of his wife, Julie Mayo, CNC closed its doors one month later, on April 30, 1986, at which time David and Julie Mayo both resigned their respective director and officer positions. They also sold the house in which they were living that had been purchased in their name by CNC as a "parsonage," and using other 10-6 rsed to them from CNC as "severance pay," "travel expenses" and "vacation pay accrued," they traveled for the next several months to Europe, Australia and Florida with Gerbode and his wife. While on this trip they stopped over in Liechtenstein where Gerbode introduced Mayo to his banker who opened an account for him with the $80,000 received from the sale of their "parsonage." CNC's exempt status was granted subsequent to these events. In fact the only ongoing activity of CNC at the time it was granted exemption was ongoing litigation with the Church of Scientology. Gerbode obtained tax exemption for CUT ostensibly based on representations that the organization was a church and conducted exclusively religious activities. (Exhibit III-10-I). In fact, once tax exempt status was obtained, CUT ceased carrying out any religious activities and began dispensing a novel brand of psychology under the name Center for Applied Metapsychology ("CAM"), and promoting Gerbode's personal books and literature, co-authored by Mayo, much of which are plagiarized from the works of L. Ron Hubbard. In 1986, Gerbode also established the Institute for Research in Metapsychology ("IRM"), another tax exempt organization which operates at the same address using the same personnel as CAM, and which produces the literature and materials that CAM promotes and distributes. IRM characterizes metapsychology in scientific terms, making it clear it is not a religion and followed no belief system. Yet metapsychology is what Gerbode's church, CUT operating as CAM, dispenses. Compare the representations made by CUT in Exhibit III-10-I, a letter to the IRS in support of their exemption application in December 1985, to the representations made by Gerbode concerning the same organization on November 2, 1992 in Exhibit III-10-J. In the December 5, 1985 letter in support of its exemption application, CUT discussed its purported "religious doctrine" and "religious history" and submitted copies of their baptismal, funeral and marriage ceremonies, representing that it was a Church conducting exclusively religious activities. (Exhibit III- 10-I). On November 2, 1992, Gerbode wrote to the City of Menlo Park, California in response to a "complaint that a church is being operated at the premises" to set the record straight so that they would not lose their zoning permit: . . . CAM [really CUT] is classified under the IRS code as a church However . . . CAM does not hold worship services, perform baptisms, or carry out other such activities typical of churches. * * * * "'Church' means a structure intended as a meeting place for organized religious worship and related activities." We feel that this does not apply to the building or the activities occurring therein. 10-7 Exhibit III-10-J. This is the "church" that passed muster with Friedlander and Darling as soon as it was apparent to them that, like Mayo, Gerbode was no longer associated with and was opposed to L. Ron Hubbard and the Church of Scientology. Gerbode has made substantial "contributions" to both CAM and IRM, which he deducts on his personal income tax returns as charitable contributions. However, at the same time Gerbode receives the direct benefit of the bulk of these "contributions" from CAM and IRM in the form of rent, salaries and payment of personal expenses. The organizations also provide Gerbode with an administrative staff and office facilities, all tax-free. The following are specific tax law violations Darling and Friedlander could have found if they had subjected CUT to the same kind of scrutiny they had subjected Churches of Scientology to during the same period. In 1982 and 1983, prior to the incorporation of CUT, when Gerbode was still the mission-holder of the Church of Scientology Mission of Palo Alto, he claimed substantial tax deductions on his personal tax returns for books, office furnishings, equipment, artwork, etc., that he purchased for use at the Mission. When Gerbode left the Mission in 1984 and established CUT, he donated equipment and artwork to the new corporation and again claimed them as charitable contribution deductions on his personal tax return. These were listed as donations in the 1023 application for CUT that Darling reviewed in 1986. When Gerbode left Scientology in 1984 he evicted the mission from his building in favor of his new operations, CAM and IRM from which he now collects rent. It is also evident that he launders donations to CAM/IRM back to himself as rent in order to get the benefit of both the charitable deductions and depreciation write-offs. Mission in 1984 and these same books, office furnishings, The IRS continues to probe litigation involving the Church while it ignored litigation against Mayo et al. Indeed the Service gave a de facto subsidy to the Gerbode/Mayo litigation by granting exemption to their litigation tax shelter. In the letter that Mayo wrote to the Service in support of CNC's exempt status in March of 1986 (Exhibit III- 10-M) he sent along part of the complaint in the suit RTC and CSI had brought against Mayo and CNC which alleged theft and violations of the RICO statute. Darling apparently did not consider it necessary to inquire about the possible public policy implications of this litigation once he saw that Mayo was on opposite sides in the litigation to the Church and granted exempt status. In 1986, Gerbode and Mayo established and obtained tax exempt public charity status for the Friends of the First Amendment ("FFA"), an organization purportedly established to support and promote First Amendment rights, but which in fact enabled Gerbode to claim tax deductions for hundreds of thousands of dollars he 10-8 "donated" to FFA, which sums were then used to pay Mayo's litigation costs in his litigation with the Church. Although Gerbode is not a party to this litigation, a central issue in the suit concerns the control of copyrights in the name of L. Ron Hubbard that Gerbode has exploited. Gerbode struck a deal with David Mayo that Mayo will continue the litigation provided that Gerbode funds it, with the understanding that Gerbode will be reimbursed for the litigation costs if Mayo wins a counterclaim for damages. Thus, Gerbode has used FFA to deduct as charitable contributions what are in reality his own litigation expenses, that he expects to recover if the litigation is successful. David Mayo, on the other hand, hopes to net millions of dollars if the counterclaim is won. Gerbode. has also disguised some of the millions of dollars he laundered through FAA so that they would not appear to be from him in order to avoid FFA being found to be a private foundation, and cemented this by shutting FFA down just before its advance ruling period on private foundation status expired in 1090. The only question Mayo's and Gerbode's groups were asked concerning litigation was whether their "legal defense fund" was set up solely to battle the Church of Scientology. When they answered in the affirmative, exemption was awarded. Unlike CNC, CUT, and CAN, who to this day enjoy exemption, our principal clients have no such status. Yet we alone of that group have been and are providing truthful and full answers to each question you have asked. All of the information the Service has requested in the various subparts of Question 10 is contained in the responses to the individual subparts that follow. . . . . 10-9 [Editor's note: The following, in bold on the original, appear to be the IRS questions to the applicant.] Questions 10.a, 10.b, 10.c, and 10.d.2. In question 10 of our second series of questions, we expressed our concern over the possibility of continuing violations of public policy and requested certain information to assuage these concern-. We have additional follow-up questions in this regard. a. Attached is a document relating to a program referred to as Snow White that apparently existed as of December 16, 1989. Please explain the apparent discrepancy between the document contained at the attachment and the response to Question 10.b. [Jump to Answer] b. The response to Question 10.b refers to a decision by Judge Osler of the Supreme Court of Ontario (page 10-5). Please provide a complete copy of the cited opinion. [Jump to Answer] c. What is the status of Operation Transport Company? Does it continue in existence? If not, please specify when and to whom all assets were distributed or transferred. [Jump to Answer] d.2. Please provide the following information with respect to Exhibit II-10-A; (i) fill in the blank under the heading of "Primary" contained in #6; (ii) an explanation of the reference to "HF" or "AS" under the heading of "Primary" at #7; and, (iii) fill in the blanks under the heading of "Vital Targets" contained in #7. [Jump to Answers] As a preliminary matter, we note that question 10 has two subparagraphs denominated as "10.d." For the sake of clarity, we will refer to the first as "10.d.1" and the second as "10.d.2." Subparagraph 10.d.1 and paragraph 10.e are addressed in separate responses. This response addresses the remainder of question 10. Subparagraph 10.a Subparagraph 10.a asks for an explanation of an "apparent discrepancy" between the response to Question 10.b of your second series of questions and Exhibit II-10-A. That which is attached is a copy of a document written in December of 1989 by a person holding the position of Snow White Programs Chief in the Office of Special Affairs United States, 10-10 and describes her functions and those of the Snow White Unit. The document also specifically mentions the Snow White program and its "Ideal Scene": "All false and secret files of the nations of operating areas brought to view and legally expunged and OTC, "Apollo" and LRH free to frequent all Western ports and nations without threat and all required ports open and free." Initially, it must be stated that the document in question was stolen from Church offices by an individual who had infiltrated the Church at the behest of the Cult Awareness Network. It was then passed on to the IRS by the CAN infiltrator via CAN. (See page 10-20 of our response to your second series of questions and supra for discussions of the Cult Awareness Network). The "apparent discrepancy" to which subparagraph 10.a refers seemingly arises from use of the word "programs" in a post title that includes the words "Snow White" viewed against the statement on page 10-5 of our response to your second series of questions that "The Snow White program is not being executed today." There is no inconsistency. That same page also states that the term Snow White became synonymous with the activity of legally locating and correcting false reports on the Church. The Church vigorously pursues these objectives through the use of the Freedom of Information Act and through direct negotiation with government agencies intended to persuade them, at minimum, that if ex[imge,emt of false reports is not feasible, corrective reports should be filed. The original Snow White program, provided as Exhibit II-10-A, was written specifically to address problems which existed in 1973 with respect to OTC, the Apollo and Mr. Hubbard. Because the United States State Department and other government agencies had. engaged in the circulation of false reports, free access to various Western ports and nations had been severely curtailed. The Apollo was sold in 1975, OTC became inactive at that time, and Mr. Hubbard passed away in 1986. Clearly, the original Snow White program became obsolete within a couple of years of its creation and is no longer in effect. In fact, the Apollo no longer exists. Once converted by its new ownership to a restaurant in Texas, it was involved in a train collision and in dry dock was cut into scrap. So, there is no way the Apollo will be frequenting Western or any ports! However, obsolescence of the actual program did not invalidate Mr. Hubbard's observation that when governmental and police agencies are allowed to accumulate false information in their files, and disseminate it to other agencies, they then "...tend 10-11 to act on the file without the presence of the real scene data which is factually good but which is then ignored." In an ongoing effort to practice the Scientology religion free from the interference of misinformed government agencies, the Church continues to pursue the Snow White objectives with the legal means at its disposal. Only when the Church is free from governmental harassment and is accorded its rights will the 6 need for Snow White activities vanish. Subparagraph 10.b Subparagraph 10.b requests a copy of Justice Osler's decision cited in the June submission. A copy of that Supreme Court of Ontario decision is submitted as Exhibit III-10-J-1, with the appropriate sections highlighted. Subparagraph 10.c Subparagraph 10.c addresses the present status of OTC, as well as details regarding the timing and distribution of any of OTC's former assets. OTC effectively ceased to operate in late 1975 when the Church activities that had been housed on the Apollo moved ashore in Florida. OTC remained inactive from that point forward except for ongoing litigation against the Portuguese government which is described on page 10-3 of our response to your second series of questions. In July 1981, OTC's aggregate assets were approximately $2,244,252 plus Pounds Sterling 2,254,8S2. At that time, OTC transferred all of its assets except for approximately Pounds Sterling 200,000 and its pending Portuguese claim to the Scientology Endowment Trust. This trust was recognized as tax exempt by the IRS under Section 501(c)(3) in 1983 after the particulars relating to the transfer of funds from OTC were specifically reviewed. In 1988, OTC dissolved and all assets still remaining, approximately $180,000, were transferred to Church of Scientology Religious Trust. Subparagraph "10.d.2" In subparagraph "10.d.2," you ask to have some blanks in the copy of the Snow White program provided to you with the June submission filled in and for an explanation of the terms "HF" and "AS." The version of the Snow White program provided with the June submission contained blanks in the places that you noted, apparently left there by whoever retyped that version. We have located, and are including here as Exhibit III-10-K, another 10-12 version which appears to be a copy of the original version and contains no blanks. The abbreviations "Cont," "Gdn" and "DG/US" in Vital Target 7 stand for controller, Guardian and Deputy Guardian United States. The abbreviation "HF" stands for Hubbard Freedom Foundation. Our records show that it was set up as a Liberian corporation in November 1972 for scientific, research and educational purposes, received a total of $500 from OTC, but then never became active and never received any other funding. The abbreviation "AS" stands for American Society which was another Liberian corporation also established in late 1972, at or around the same time as the Hubbard Freedom Foundation and probably for similar or related purposes. The best available information is that the American Society had a fate similar to Hubbard Freedom Foundation, receiving a small amount of money to get started, but then never actually carrying out any activities or function. As neither of these Liberian corporations was ever active and as no effort was made to maintain their corporate charters in Liberia, we assume that they were dissolved by operation of law many years ago. The Liberian attorney who originally formed them was killed in a political upheaval more than a decade ago, and we, therefore, have no access to HF or AS records. 10-13 Subparagraph 10.d.1 In our prior question 10, we expressed our concern over the possibility oft continuing violations of public policy and requested certain information to assuage these concerns. We have additional follow-up questions in this regard. * * * * d. In CSC v. Commissioner, 83 T.C. 381 (1984) at 531-437, there is a discussion of the actions of several persons identified by name or office (e.g., Vicki Polimeni). Please identify the persons who held the following offices during the period referenced at pages 431-437 of the CSC opinion: (i) FBO International; (ii) FBO AOLA; and (iii) FBOs at various other Advanced Organizations as described at page 431 of the CSC opinion. Please state whether Vicki Polimeni or any of the individuals identified in the response to this question have at any time subsequent to 1989 been related by reason of being service-provider or otherwise) to any Scientology-related organization (either as staff or in any other capacity). Please describe the current relationship between Martin Greenberg and Scientology-related organizations. During the period of time described at page 431 and 432 of the CSC decision, i.e., May through August 1969, there were only three Advanced organizations in existence. Consequently, the positions you have inquired about and the individuals who held them were: FBO International -- Al Boughton FBO AOLA -- Lauren Gene Allard FBO AO United Kingdom -- Don Clark FBO AO Denmark -- Rob Sanderson Vicki Polimeni, Don Clark and Rob Sanderson ceased having any relationship with any Scientology-related organizatio many years ago, long before 1989. From 1989 to the present, Al Boughton has been a staff member at the American Saint Hill Organization (ASHO) in Los Angeles. He holds the position of Auditing Supervisor for the Saint Hill Special Briefing Course, responsible for overseeing the auditing done by students training to be Scientology auditors on this course. The Church has had no specific information concerning the activities or whereabouts of Gene Allard since 1981, when he appeared as an IRS witness in the Tax Court trial of the CSC case. The Church has long suspected that Allard was sent into AOLA in 1969 by IRS Intelligence Division agent John Daley, to infiltrate the Church as an agent provocateur. John Daley was an agent in the IRS' Case Development Unit in Los Angeles, a unit 10-14 which served as a model for a national intelligence operation known as the Intelligence Gathering and Retrieval System ("IGRS"). The IGRS was disbanded in 1975 when Congress found that it had "fostered unrestrained, unfocused intelligence gathering and permitted targeting of groups for intelligence collection on bases having little relationship to enforcement of the tax laws." Congress found that "there were the beginnings of politically motivated intelligence collection in at least one district; and evidence that the fruits of similar investigative efforts in two districts had been destroyed." One of the districts that destroyed its files on the eve of the Congressional investigation was the Los Angeles District (i.e. John Daley's files) and the other was the St. Louis District, where Congress found that a file labelled "Subversives" that "contained only material on the Church of Scientology" had been destroyed. (See pages from Supplementary Detailed Staff Reports On Intelligence Activities And the Rights of Americans. Final Report of the Select Committee to Study Governmental Operations With Respect to Intelligence Activities, attached as Exhibit III-10-L). Circumstantial evidence strongly suggests that Allard was a clandestine operative who reported to Daley. Daley had been investigating the Church since at least 1968 and, by the time Allard first appeared at AOLA, Daley had already used a plant inside Crocker Bank who provided Daley with illegally-obtained copies of the Church's confidential bank records. After occupying the position of FBO AOLA for barely two months, Allard suddenly disappeared, taking with him some internal Church correspondence and other Church assets. Allard turned over the documents to the IRS in Kansas City; the documents were forwarded to John Daley in Los Angeles. The Church filed criminal charges against Allard. He was later located and arrested by the FBI in Florida and brought back to Los Angeles. Not long after Daley interviewed Allard in jail, the California Attorney General's office decided the evidence against Allard was insufficient and dropped the charges. Then, in 1981, Allard surfaced as a witness for the IRS in the CSC case along with the documents that he had stolen, admitting on cross-examination that he was hopeful of receiving a reward if his testimony resulted in collection of any taxes. Judge Sterrett demonstrated a willingness throughout the CSC trial to regard any anti- Church witness as credible, but even he had problems with Allard's testimony: Judge Sterrett found that "There were significant inconsistencies in his testimony . . .". 83 T.C. 509. Nevertheless, it was Allard's testimony and the documents that he stole that formed virtually the sole basis for the findings at 10-15 pages 431 and 432 of the CSC decision about which you now inquire. Judge Sterrett's gratuitous comments suggested that whatever occurred at AOLA in 1969 constituted some kind of criminal conspiracy. All of this evidence however, was known in 1969 when Revenue Agent Woodrow Wilson unsuccessfully sought to institute a fraud investigation. In June 1969, Daley even went so far as discussing with California State officials the use of the Allard evidence as "grounds for dissolution" of the Churches of Scientology. (Exhibit III-10-M.) In August of 1969, Wilson presented this information in the form of a "fraud referral" in an effort to elevate it from "case development" status to an actual criminal investigation. The fraud referral was declined by the Chief of Intelligence. (Exhibit III-10-N.) You have also asked about the current relationship of Martin Greenberg to any Scientology-related organizations. Mr. Greenberg has not been on the staff of any Scientology-related organization since early 1980's. He is a certified public accountant with an accounting practice in Clearwater, Florida. Although we understand that individual Church members have used his services for their personal or business accounting, he has not to our knowledge been retained nor has he done any accounting work for any Scientology-related organizations for many years. Mr. Greenberg is a parishioner of the Scientology religion. While in Los Angeles in 1978, Martin Greenberg, along with CPA James Jackson, formed the firm of Greenberg and Jackson. In 1983 Greenberg moved away and sold his interest in the practice to Jackson, who retained the name "Greenberg and Jackson" for the professional corporation. At that time Mr. Greenberg ceased having any involvement in or knowledge of the affairs of any Scientology-related organizations. Recently, Mr. Jackson also sold his interest in this practice and presently there is neither a Greenberg nor a Jackson associated with "Greenberg and Jackson." Several Scientology- related organizations continue to utilize the services of CPA Brad Bernstein, one of the present shareholders of that firm. ~ . . . . 10-16 Questions 10 e(i)-(ii) In our prior question 10, we expressed our concern over the possibility of continuing violations of public policy and requested certain information to assuage these concern-. We have additional follow-up questions in this regard. * * * * e. We have carefully reviewed the response to Question lO.d. The Service still requires a more complete understanding of the cases listed in the response. Please provide the following information, as well as any other information or documentation that you believe would assist the Service in this regard. (i) For each of the cases listed on pages 10-20 through 10-22, please provide a short description of all claims by the non-Church of Scientology parties. In particular, please describe any allegations that the Scientology-related organizations, and/or the individuals, described in Question 2.d of our second series of questions have engaged in any action that is an intentional tort and/or that would violate any criminal law. In your description, please include the date the action is alleged to have occurred and the party alleged to have committed the action. (ii) For each of the cases on pages 10-8 through 10-22, other than the "GO Criminal ActiVity Fallout Litigation" cases listed on pages 10-16 and 10-17, please provide a copy of any jury verdict, or any decision, finding or statement by a court that any Scientology-related organization, and/or any individuals described in our prior Question 10.d, engaged after 1980 in any action that is an intentional tort and/or that would violate any criminal statute. The copy should be provided regarding of the ultimate disposition of the underlying legal action (e.g., even if an appeal is still pending or the action was settled, dismissed, or successfully appealed). With respect to each copy provided, please state whether the Church agrees with the court's statement, and, it so, whether there in presently any connection or relationship between the individual(s) involved and the church. ------------------ Subparagraph 10 e(i) In our response to the Service's prior Question lO.d, we provided a lengthy description of litigation involving Scientology-related organizations or individuals since 1980. To facilitate the Service being able to understand these cases and put them into proper context, the cases were grouped according to the kind of case and allegations and the phenomena that brought the various suits about. 10-17 In this follow-up question the Service is asking for copies of any jury verdicts or judicial findings respecting all but a few ofthose cases, where it was found that a Scientology-related organization or individual committed a tort or criminal law violation; and with respect to just three of the groupings of cases, the Service wants further information concerning the allegations made in those cases. Those groupings are: 1) cases listed as financial or property disputes or transactions; 2) personal injury or medical-related suits; and 3) suits that appear to have been instigated directly or indirectly by the Cult Awareness Network. As described above in the Introduction to Question 10, in the vast majority of these cases the allegations that have been made and which are described below, trace back in one way or another to the IRS itself. Nonetheless, in the spirit of cooperation, we are providing in this response all of the information requested -- i.e. the description of the allegations in each of the cases listed on pages 10-20 to 10-22 of our response to your second series of questions and copies of the verdicts, decisions and findings requested in Question 10.e (ii). We feel it is appropriate, however, to make the following preliminary observations. Public Policy As An Exemption Issue: All of these questions concerning litigation relate to the issue of public policy. Section 501(c)(3), however, contains no express condition that an organization must operate in conformance with public policy to qualify for tax exemption. Whether or not an organization violates public policy is relevant to exemption only in the context of whether the organization is operated exclusively for one of the exempt purposes that section 501(c)(3) enumerates. Only one judicial decision has ever applied a public policy condition to the exempt status of a church -- the Tax Court decision concerning the Church of Scientology of California (the "CSC decision"). Judge Sterrett, however, limited his findings of public policy violations affecting CSC's exempt status strictly to the activities of the Guardian's Office ("GO'') that resulted in a number of GO members being convicted of crimes. Thus, although the Service was prepared to present testimony in the CSC case from tort claimants such as Larry Wollersheim and some of attorney Michael Flynn's clients, Judge Sterrett precluded that testimony and made no finding regarding public policy based on any civil tort claims. (See our response to Question 10.d of your second series of questions for a description of Michael Flynn's and Larry Wollersheim's claims infra.). 10-18 The CSC decision, upon which the Service has often relied, itself highlights the irrelevancy of pending, dismissed or settled legal cases where any form of tort allegation has been made. The public policy issue was addressed in the CSC case and decided in that case, and the only acts of any Church of Scientology members that were found to provide a basis for questioning exempt status were the criminal activities of the Guardian's Office. If Judge Sterrett did not find the allegations of Flynn's clients, Wollersheim and the rest to be relevant, there can be no legal basis for considering the same kinds of allegations now. The Church has addressed the Guardian's Office both here (see responses to Questions 3.e, 10.a and 10.d) and in our prior response (responses to Questions 3.d and 10.d). The Church also addressed at some length the various kinds of other litigation Scientology-related organizations and individuals have been involved in (response to your prior Question 10.d). On this basis, the Church feels that it has adequately addressed public policy against the relevant legal authorities. Public Policy As Applied to Other Churches: The Service has enforced the public policy standard selectively, applying it only to the Church of Scientology and not to other churches to which it could just as easily, if not more appropriately, be applied. For example, for most of the past decade the Catholic Church has been embroiled in a major scandal arising from the exposure of an astonishingly large number of instances of child molestation involving Catholic priests. Copies of newspaper and magazine articles about this subject are attached as Exhibit III-10-D. A book published in October 1992, Lead Us Not Into Temptation by Jason Berry, states that between 1984 and 1992 four hundred Catholic priests in North America were reported for molesting children, and in this same period the Catholic Church has paid out $400 million to resolve these cases. The book further details how other Catholic officials, including many high in the Catholic hierarchy, have covered up what occurred or were guilty of complicity by knowing what was happening and ignoring it or reassigning a tainted priest to another job where he would still have contact with children. These are not merely cases where unproven allegations have been made; some of the cases resulted in criminal convictions of the priests involved. In the case of Father Gilbert Gauthe, for example, Father Gauthe pleaded guilty to 36 counts of child molestation while serving as a parish priest in Louisiana. The attempts to cover-up Father Gauthe's crimes described in Jason Berry's book spanned the Catholic hierarchy and included archbishops, bishops, other priests and directions and orders emanating from Rome. Thus a jury also awarded a verdict of $1.25 million to one of the victims and his-family against the responsible Catholic diocese. 10-19 We are not suggesting that the IRS should now investigate the Catholic Church or make a tax exemption issue out of an unfortunate scandal that should be dealt with in the criminal justice system. Rather, this example serves simply to illustrate the unfair double standard that has been applied to the Church of Scientology. Nevertheless, the following is a description of the cases that were listed in our prior response, describing the allegations in those cases of commission of intentional torts or violations of criminal statutes. Description of Tort Litigation: The suits listed on pages 10-20 through 10-22 each have their own set of facts and assortment of claims, but for the most part are of the same general character. They involve frivolous claims by "crazies" who think they can make some money suinq Scientology; suits against former spouses or business associates naming the Church to seek a tactical advantage; and a considerable number of suits inspired by the Cult Awareness Network, which bombards the person with negative information about the Church and then refers them to an attorney who tells them they can sue the Church and get rich. (See the "Introduction To Question 10" for further information on CAN). There are a few instances, like the Rabel case, where a stereo speaker fell from the window of a Scientology mission injuring someone walking below, where there was a valid claim which the Church equitably settled. Not one of the cases asked about in Question has been adjudicated by a court; thus all the claims listed are unproven. Because many of these suits are refund suits, it is useful first to review the Church's refund policy. It has been a long-standing policy of the Church that if someone is dissatisfied with their Scientology services and asks to have their contributions returned within a three month period these amounts will be returned. Likewise, if the person asks for return of ccontributions for which no services were received (i.e. an advance payment), there is no three month limitation period. Anyone newly enrolling in services at a Church of Scientology is informed of the policies and signs an agreement to abide by them. As a further condition of receiving a refund or repayment, the person understands that they may not again receive services from the Church. 10-20 Within the Church, there are two separate terms: A "refund" refers to a return of contributions to a parishioner within 90 days of participating in religious services while a "repayment" refers to a return of a parishioner's advance payment before he or she has participated in religious services. For simplicity, the following discussion will use the term "refund" to describe both types of transactions, because both involve a return of parishioner contributions. The Church's refund policy is exceedingly fair. If someone isn't happy with Scientology -- which is a very small minority of people -- he simply has to make a proper request for his donations back, agree to forego further services and his donations will be returned. For the Church, in addition to the fact that this policy aligns with Scientology principles of exchange, it also serves the purpose of allowing our churches and the parishioners who are very happy with Scientology, to carry on without the unhappy few in their midst. The presence of a considerable number of refund suits in the following list is directly related to the influence of CAN and CAN attorneys. As described in the "Introduction to Question 10," CAN's modus operandi is to seek out anyone who is unhappy with Scientology feed them negative information and then refer them to an attorney. The CAN attorney then convinces the person that he can not~onTy get a refund of his donations, but by allowing the attorney to handle the claim he can get damages as well, and possibly get rich. As will be seen in the descriptions of the cases that follow, almost one for one such suits are ultimately settled for the refund amount the person could have obtained in the first place simply by requesting it. It is also of interest that we know of no suit filed for refund that wasn't instigated by CAN. In fact, the Church rarely has any refund requests, by suit or otherwise, except when instigated by the IRS- sanctioned CAN. And in most cases, further discussion reveals the person was quite happy with his service at the Church and seeks his money back only after CAN has told him how "terrible" Scientology is. Descriptions of individual suits follows: Mira Chaikin v. Church of Scientology, L. Ron Hubbard. et al.: The following is from the judge's ruling dismissing the case, which says all that needs to be said about this case: "In this pro se complaint, which can most charitably be described as bizarre, plaintiff Mira Chaikin ('Chaikin') alleges that the various defendants are exploiting her, impersonating her and 'implanting' her. 10-21 She alleges that because defendant Ron Hubbard has been 'flowing to (her) sexually and romantically' she is his 'true wife,' as well as 'having been (his) wife in (her) last life who was murdered. ' Thus, she further alleges, defendant Mary Sue Hubbard is 'in no way the wife of Lafayette Ron Hubbard ' but has merely been impersonating plaintiff with resulting severe endangerment of plaintiff's mental health. "As against the Church of Scientology, Chaikin appears to be claiming that the organization is acting contrary to its theoretical foundation. For the reasons set forth below, I dismiss the complaint. "An action may be dismissed 'when the allegations of the complaint are beyond credulity . . .' [cite omitted]. I find plaintiff's allegations, to the extent they are comprehensible at all, to be patently incredible." Terry Dixon v. Church of Scientology Celebrity Center of Portland. et al.: This is a typical CAN-influenced suit for refund by Terry Dixon, which also asks for damages based on claims of breach of contract and breach of fiduciary duty. Dixon alleges that the Church of Scientology Celebrity Centre Portland, Church of Scientology of Portland and Church of Scientology Flag Service Org, breached a contract with him and their fiduciary duty, by failing to deliver to him results he considers to have been promised him from Scientology religious services. The suit was filed in December 1990. Each of the three churches filed motions to abate the case pending arbitration, based on enrollment agreements signed by Dixon while he was in the Church, which include a clause that any disputes between the Church and the parishioner must be arbitrated. The judge ordered the case to arbitration and it has now been settled for the refund amount. John Finucane. David Miller. Alexander Turbyne v. Emery Wilson Corporation, et al.: This suit was instigated directly by CAN and CAN attorney Toby Plevin. All of the plaintiffs are dentists who were clients of Sterling Management Systems (Emory Wilson Corporation) for a brief period of time and also briefly received some services from the Church of Scientology of Orange County. Sterling is a company that has been owned and run by Scientologists and uses methods of organizational administration developed by L. Ron Hubbard to help business people improve their businesses. Some of these individuals, upon being impressed with Mr. Hubbard's works, have become interested in Scientology. The lawsuit was filed in LA Superior Court on December 26, 1991 by Finucane, Miller, and Turbyne, who reside, respectively, in Aiken, South Carolina, Sacramento, California, and Sohigan, Maine, 10-22 against Sterling and the Orange County Church. The complaint contains causes of action for deceptive trade practices, fraud, and injunctive relief, alleging that Sterling misrepresented itself to be an independent management training organization when, in fact, it was a part of the Church of Scientology and operated as a recruitment office for the Church with the goal of procuring new members and getting them to take Church services. Miller and Turbyne settled their cases with the Church of Scientology of Orange County for a refund, but not with Sterling, leaving all plaintiffs with claims against Sterling, and only Finucane suing the Orange County Church. Finucane has so far refused offers from the Church to have his claim arbitrated as per the enrollment agreement he signed. The Church therefore filed a counter-claim and criminal complaint against Finucane relating to his breach of contract (his refusal to abide by the enrollment agreement) and invasion of privacy (for secretly tape-recording a conversation with a Church staff member and then broadcasting a heavily edited version of it on national television). Dorothy Fuller. an individual v. Applied Scholastics International et al.: This is another Toby Plevin, CAN instigated suit filed in April 1992. The claims are breach of lease, fraud and negligent misrepresentation. Applied Scholastics leased a residential property from Fuller who claims that the house was misused in several ways, including housing more people than agreed upon in the lease, use of the house as a child center, dormitory style living, and fabrication of products for resale. Thus it is a minor property dispute escalated by Plevin into tort litigation. It is expected that this suit will be quickly settled. Lisa Stuart Halverson v. Church of Scientology Flag Service Organization, et al.: This was another suit for refund that CAN attorney Toby Plevin filed, alleging several torts for purposes of effect. The claims were for violation of the deceptive practices act and fraud, based on Halverson being told she could get a refund and then not being able to get it. The suit was settled for the refund amount. Thomas and Carol Hutchinson v. Church of Scientology of Georgia, et al.: The complaint in this suit is virtually a carbon copy of the complaint in the Corydon case, one of the Michael Flynn cases listed at page 10-13 of our prior response. Although the Corydon case was settled, Hutchinson apparently got a copy of the complaint, very likely provided by CAN, and felt its inflammatory claims against a wide array of Church organizations would add spice to what is otherwise a suit for refund of money paid to the Church of Scientology of Georgia. The claims are stated as fraud and deceit and infliction of emotional distress, seeking unspecified damages and injunctive relief. However, the claims revolve around a core that the teachings of Scientology differ from those of 10-23 Fundamentalist Christianity, a topic constitutionally barred from secular adjudication. The Church anticipates dismissal of this suit, favorable summary judgment or settlement for a refund of the Hutchinson's donations. Mark Lewandowski v. Church of Scientology of Michigan. et al.: This suit was against the Church of Scientology of Michigan and two individuals, one former and one current staff member of the Michigan Church. Mark Lewandowski, who had previously been under psychiatric treatment with a substance abuse disability, took some courses at the Church of Scientology of Michigan in 1988. Although Lewandowski's relationship with the Church was short, in his suit he alleges that the Church committed consumer fraud by failing to ascertain his unstable mental condition, fraud, for allegedly misrepresenting the nature of the courses he took, and intentional infliction of emotional distress through the above. The nature of Lewandowski's claims and allegations strongly suggest that he was influenced to file suit by CAN. This case went before a mediation panel where a settlement was accepted by the Lewandowski's attorneys for a refund. The Church of Scientology of Michigan is in the process of paying this amount to end the suit. Peter and Francis Miller v. Church of Scientology et al.: The suit was filed on April 29, 1991 by CAN attorney Toby Plevin against several organizations, including CSI, Church of Scientology Orange County and Sterling Management Systems. This suit makes claims not unlike those of the Finucane suit described above, that they were misled into Sterling and Scientology and therefore want their money back. The claims include fraud, breach of express and/or implied warranties, invasion of privacy, intentional infliction of emotional distress and negligence. The Millers' claims against Sterling were arbitrated, with the millions the Millers originally claimed reduced to the refund amount. The case is still at the pleading stage as regards the Church parties. Dee and Glover Rowe v. Church of Scientology of Orange County. et al.: This is another Toby Plevin/CAN suit naming the Church of Scientology of Orange County, RTC, CSI, the Sea Org and Does 1-100. It was filed on October 7, 1991, alleging fraud/deceptive trade practices, invasion of privacy, false imprisonment, assault, and intentional infliction of emotional distress. The suit essentially repeats the allegations made by the Rowes in the May 6, 1991 edition of Time magazine, that they took courses at Sterling Management Systems and allegedly under the guise of management training were induced to take Scientology services. Discovery in this case has demonstrated that the Rowe's claims are contrived and maliciously false, and that these are people with a history of criminal activity. Glover Rowe embezzled 10-24 money from a fraternity in college and Dee Rowe has a history of emotional turbulence starting long before any contact with any Scientology organization. One of their claims, which has already been dismissed on summary judgment, was that the Church bugged their hotel room. This was a completely fabricated claim as seen by the fact that the staff of the hotel testified that this was impossible and that the Rowes could "support" it only by stating without any proof that their room "must have been bugged." It was not, a fact quickly recognized by the court. The Rowes were referred to Time magazine by CAN and continue to be encouraged by CAN . Pretrial summary judgment motions are still being considered in this case and the Church expects all of the Rowe's claims to be dismissed. The Church also expects to prevail on a counterclaim naming the Rowes and CAN defendants, for libel and breach of contract, and that by deprogramming the Rowes, CAN interfered with the Church's relationship with the Rowes. Frank and Joan Sanchez v. Sterling Management Systems. et al.: This is yet another CAN-inspired suit involving a dentist, Frank Sanchez and his wife, Joan Sanchez, filed against Sterling, the Church of Scientology of Orange County and IAS. The Sanchezes attended a Sterling seminar at the end of October 1989, after which Sanchez asked Sterling to administer a program in his office. The Sanchezes went to the Church of Scientology of Orange County in December 1989 and were involved with the Church for less than a month. Sanchez wanted help with his marriage as he and his wife had marriage counseling over a twenty year period but it had been unable to straighten out problems arising from twenty years of adulterous affairs. Joanne Sanchez was opposed to the trip to Sterling and Orange County and went only because her husband wanted her to go. The Sanchezes paid some money to Sterling and the Orange County Church, but then returned to New Mexico and refused further participation in any services at either Sterling or the Church, which would appear to have been directly caused by negative information provided them by CAN. Although the bottom line of what they are seeking is a refund of their money, their complaint asks for damages for breach of contract, intentional infliction of emotional distress, breach of covenant of good faith and fair dealing, for fraud and all the usual, boilerplate CAN allegations. The suit was dismissed with respect to the Orange County Church and it is expected that ultimately it will be settled for a repayment of the money they paid to Sterling. Thomas Spencer v. The Church of Scientology, et al.: This suit was settled for a refund and dismissed on August 31. 1992. It was another suit for refund laced with the standard CAN claims, 10-25 breach of contract, fraud, and intentional infliction of emotional distress. Irene Zaferes v. Church of Scientology: This was a personal injury suit filed in April 11, 1989. The plaintiff was a Hollywood woman who claimed that a wrongful death occurred when her brother, Luke Andrea (a.k.a. Louis Zaferes) died on April 12, 1988, some months after he did some "heavy construction work" at the church of Scientology Flag Service Org, while having a heart condition. Zaferes was acting as her own attorney. The case was dismissed. Jo Ann Scrivano v. Church of Scientology of New York. et al.: Jo Ann Scrivano, had an extensive psychiatric history including the use of heavy psychiatric drugs; before she came to the Church of d ' Scientology Mission of Long Island in January of 1986. After receiving a small amount of introductory level auditing for which she donated $450, Mrs. Scrivano became upset and blamed this on her auditing. She was offered her money back, but refused it and left. She subsequently filed a suit naming not just the Long Island Church but also a number Church organizations that had never heard of her. She even alleged an array of torts and sought $10,000,450 in damages. Her claims include Fraud, Constructive Trust, Breach of Fiduciary Duty, Malpractice, Negligence, and Intentional Infliction of Emotional Distress. None of these claims is true, and both Scrivano's own attorneys and the judge assigned to the case have encouraged her to accept a token settlement offered by the Church just to get rid of the suit. Marissa Alimata and Richard Wolfson v. Church of Scientology of California etc.. et al.: This case, of Marissa and Richard Wolfson, furnishes an excellent example of how any fruitcake can file a civil suit. The Wolfsons sued for $1 billion alleging intentional infliction of emotional distress and that the conduct of the Church was "outrageous, fraudulent, malicious, abusive, indecent, intentional, unduly influential, willful, wanton and beyond bounds of common human decency." They claimed to have been subject to "undue influence" and to have suffered "violation of fiduciary relationship," interference with prospective economic advantage, loss of consortium and fraud. Before winning summary judgment on all of the Wolfsons' claims, the church was required to endure the public airing of delusional charges and suffer through such bizarre conduct as Mr. Wolfson appearing at his deposition dressed as Mrs. Wolfson. _ Sherry Fortune v. Church of Scientology American Saint Hill Organization and Chuck Tingley: This case was brought by Sherry Fortune against the Church of Scientology American Saint Hill Organization and Chuck Tingley, her former husband, an independent contractor who had been a computer programmer at the Church. The case was essentially a domestic dispute between Fortune and Tingley that involved the rights to some computer software Tingley had developed. Fortune believed that naming the Church in her suit 10-26 would give her additional leverage over her former husband so she alleged that the Church was guilty of intentional interference with economic advantage, fraud and misrepresentation, intentional infliction of emotional distress, and conversion. The frivolous claims against the Church were dismissed and Fortune and Tingley reached a settlement between them. Gary and Susan Silcock v. Church of Scientology, Mission of Salt Lake et al.: The Silcock's received some religious services from the Church of Scientology Mission of Salt Lake in 1984 and then asked for a refund. The refund amounts requested were paid to the Silcocks and the suit was dismissed in September 1986. Pedro H. Rimando and Irene Marshall v. The Church of Scientology of San Francisco. et al.: This suit was a suit brought by the parents of Rodney Rimando, a former Church staff member who committed suicide in November 1986 by jumping out of a window of a Church of Scientology building. The suit's claims were wrongful death, intentional infliction of emotional distress, negligence, and outrageous conduct. The suit claimed that Rimando came to the Church of Scientology of San Francisco for spiritual guidance and that no precautions were taken to prevent his suicide or see that he got psychiatric help. This suit only came about because a CAN attorney incited the parents to file it. The parents did not really believe the Church to be responsible for their son's suicide. The suit was never served and was voluntarily dismissed with prejudice. Wendy and William Rabel v. Eric Rising. Jane Doe Rising, Church of Scientology, Mission of University Way. et al.: As described previously, this suit involved an incident where a stereo speaker placed in the window of the University Way Mission in Seattle, Washington fell out of the window and struck Wendy Rabel on the head. A settlement payment was negotiated and the case was dismissed in January 1988. Francine Necochea a minor child. by her Guardian Ad Litem Cecilia Garcia v. Church of Scientology. et al.: This was an insurance suit dealing with an incident in 1983 when a girl on a motorized bike hit a Golden Era Studios Bus. She sustained a broken leg and other minor injuries. The girl's family sued the Church and the Church's insurance company handled the case and settled it for $5,000. Roxanne Friend v. Church of Scientology International. et al.: Some background leading up to the filing of this suit will help make it understandable. Shortly after breaking away from the Church of Scientology, Roxanne Friend became romantically involved with a non-Scientologist. After an on-again, off-again relationship, they 10-27 finally broke off the relationship in August 1989. For months after this Friend experienced what she later characterized on a medical questionnaire as a "nervous breakdown." Documents authenticated by Friend in her own hand illustrate her state of mind during this period, and outline the series of bizarre and violent acts that she admits were preceded and prompted by the break-up with her non-Scientologist boyfriend. She first secretly absconded with her former boyfriend's young son and molested him sexually. She next tried to persuade a karate instructor to murder her former boyfriend. Failing this, she wrote letters to the ax-boyfriend claiming that he had drugged, hypnotized and forced her to perform lewd sexual acts for he and his friends. When all of this further alienated the man, her conduct became more bizarre. She scrubbed her mare's vagina with bleach causing the animal severe pain and then physically assaulted and injured the proprietor of the stable when she tried to intercede on behalf of the horse. A bit later Friend was stopped for dangerous reckless driving and resisted arrest by assaulting a police officer. Church staff who knew Friend and Friend's brother, nonetheless attempted to help by taking her to doctors in Los Angeles and then escorting her to Florida to be in a less stressful environment where she could also be examined by doctors. Once in Florida, Friend refused help, and went to the police with the hallucinatory claim that someone put crack cocaine in her cigarettes to account for her bizarre behavior. She was taken to a hospital at her insistence. The Church attempted to get her to submit to a full medical examination, knowing that most such behavior episodes are initially prompted by some undetected and untreated physical ailment. Friend refused. Friend was then taken to her mother along with a written recommendation from the Church that she receive a full medical examination. Friend's mother ignored the recommendation and Friend was later arrested, incarcerated in a mental hospital and sent for counselling at a Jewish support group. A psychiatrist at that group turned her over to the Cult Awareness Network (CAN). As they do in every such case, CAN promptly pumped Friend full of false and derogatory information about the Church and turned her over to their attorney Plevin. Up to that point, when CAN became involved, Friend had never considered the efforts of the Church members to help her as anything other than help, and despite her agitated state, had never accused the Church of causing the condition -indeed she recognized that the break-up of her ill-fated romance was what brought it on. After being manipulated by CAN, however, Friend decided the Church was to blame and should pay her damages. 10-28 Months after the Church had its last communication with Friend, she finally received two medical examinations. The first found nothing wrong with her. The second found that she had a large lump in her abdomen and it was diagnosed as a very rare form of cancer. Friend's CAN attorneys, the same attorneys who had represented the Aznarans (see description of the Aznaran litigation in the response to your prior Question 10.d) considered this the next best thing to a plane crash, and suddenly saw in Friend the prospect of a circus trial with a dying woman to play on the emotions of a jury. Her attorneys rushed to court with a lawsuit that claimed the Church was responsible for her cancer not being earlier detected by not allowing her to see a doctor, and that all her psychotic episodes stemmed from this undetected physical condition. The attorneys characterized the efforts of Church members to help her as examples of assault and battery, wrongful imprisonment, invasion of privacy and intentional infliction of emotional distress. The suit also claimed the Church was guilty of fraud and false advertising and breached express and implied covenants in representing it would refund money to those not satisfied but then failing to do so. These claims were completely unfounded as discovery proved that Friend had seen many doctors on a regular basis during the period that she was at the Church, both at the Church's direction and on her own, and thus the Church took the appropriate measures to see that she got the care and diagnosis needed. Her own doctor testified that the type of cancer Friend contracted was very rare and virtually undetectable by modern medical science until well developed and spread. The doctor testified that the only way to detect such cancer was for the patient to complain of a lump and then have a biopsy performed. Friend subsequently testified that she had felt a lump developing for two years, but never mentioned it during that time to the several doctors she did see. The Church settled this case for nuisance value, for less than the cost of a trial, even if the Church prevailed. David Miscavige met with Friend in settlement talks as he was concerned that her attorneys would leave her destitute when doctor reports were submitted in court stating she only had several months left to live. Once settlement terms were generally agreed upon, the first thing Friend did was ask whether if she miraculously recovered, could she get back into the Church and take services. Thus, in the final analysis Friend herself acknowledged that her frightening claims against the Church were contrived. To our knowledge, despite the claims that were made by Friend and her attorneys of imminent death, she is still alive. Bruce and Lynnel Arbuckle v. Skip Pagel M.D. Church of Scientology Celebrity Center Portland. et al.: This suit was brought by the parents of Chris Arbuckle, a former Church 10-29 parishioner, who died of kidney failure. The suit's claims were wrongful death against Scientologist Dr. Skip Pagel and the Tuality Community Hospital, and breach of fiduciary duty against the Church of Scientology celebrity Centre Portland, Church of Scientology of Portland and Church of Scientology Mission of Fairfax. Arbuckle, a 25-year-old chiropractor, participated in the Purification Rundown after first receiving a physical examination by Dr. Pagel. Subsequent to this Arbuckle died, in August of 1986, of a heart attack resulting from a kidney failure which followed a dying liver, with the cause of the dying liver attributed to "probably hepatitis" on the death certificate. The complaint alleged that the Purification Rundown caused this to occur. What was found on further examination was that Arbuckle was known to be abusing steroids for body building purposes, that he had undergone a bout of hepatitis prior to doing the Purification Rundown (which he did not disclose to Dr. Pagel), and that a pathologist familiar with Arbuckle's death stated that his liver died as a result of Hepatitis B, and that there was no way the Purification RD could have caused this to occur. The suit was settled and dismissed in August 1990. In re Dynamic Publications Inc.: Dynamic Publications was a company owned by two now-expelled former Scientologists, who filed for bankruptcy in early 1987 in United States Bankruptcy Court for the District of Maryland. The trustee in bankruptcy, appointed by the court to collect all the assets of the company, determined that these individuals had made donations to Churches of Scientology and Scientology-related organizations through the company and sought to get some of this money back as having been fraudulently conveyed when the company was in debt. The suit was settled in January of 1991. Ted Patrick. et al. v. Church of Scientology of Portland. et al.: The Church of Scientology of Portland filed a suit against the deprogrammers of Julie Christofferson in September, 1980, suing them for barratry and practicing medicine without license. Ted Patrick, a convicted felon, was one of the deprogrammers. He filed a counterclaim alleging abuse of process and claiming that the Church's suit was frivolous and vexatious. The attorney on the suit was an associate of Michael Flynn associate. The counter-suit was ultimately dismissed. Gregory F. Henderson v. A Brilliant Film Company, et al. and Gregory F. Henderson v. Marvin Price. et al.: Henderson had a contract with Brilliant Film Company to shoot a movie written by L. Ron Hubbard. Brilliant Film went bankrupt and Henderson filed suit on May 14, 1982 against a series of defendants, including L. Ron Hubbard. It raised financial claims and also that there had been a conspiracy to induce Henderson to agree to a loan that would not be repaid and to keep him from pursuing his legal remedies. He 10-30 also filed a second suit, against Marvin Price, an ex-scientologist who had was the mission holder of the Church of Scientology Mission of Stockton stating claims for negligent misrepresentation, fraud, breach of fiduciary relationship and conspiracy to defraud. The suit with Brilliant Film Company was settled and the other suit was then dismissed with prejudice in July 1984. Peter Siegel v. Religious Technology Center. et al.: Peter Siegel is a "sports hypnotherapist", doing business as "Achievement Plus Institute". Siegel used a logo similar to a trademark owned by RTC. Attempts were made prior to litigation to settle Siegel's confusion as to the ownership of the mark, which was registered by RTC in December 9, 1986, and to obviate the need for litigation. Siegel was uncooperative in this and RTC and CSI filed suit. Siegel filed a pro per cross-complaint on December 20, 1989 for registration of the mark in his name, cancellation of RTC's registration, trademark infringement, intentional infliction of emotional distress and revocation of RTC and CSI's tax-exempt status. Siegel has no valid claim to this trademark and RTC's summary judgment motion is presently pending. Although Toby Plevin came in at the last minute to represent the defendant at the summary judgment hearing, the court, after hearing her argument, told Plaintiff's counsel to propose an order on the summary judgment motion to be written from the viewpoint that the court was ruling in Plaintiff's favor. The court has also asked for more detailed information concerning RTC's pending motion for attorneys fees. Steve Dunning v. Church of Scientology. et al.: Dunning was a Church staff member for three months in 1983 and came and went for very brief periods after that. He is currently in a half way house for psychiatric patients where he committed himself because he could not function in the outside world, has an outstanding warrant for his arrest in North Carolina for assault with a deadly weapon and another arrest for threatening someone with a knife. He filed a suit against the Church asking for over $5 billion claiming breach of contract, breach of implied covenant of good faith and fair dealing claims, fraud and intentional infliction of emotional distress. The suit was completely groundless and it was dismissed in favor of the Church in August 1987 when Dunning failed to appear at the hearing on the Church's Motion for Entry of Final Judgment. Jeff and Arlene Dubron v. Church of Scientology, International. et al.: This suit which named 21 defendants and 50 "John Doe" defendants, alleged claims of defamation, invasion of privacy, outrageous conduct, and negligent infliction of emotional distress. The suit stemmed out of an incident where some Church staff posted a notice around Scientology churches calling for Scientologists to report unethical conduct and used some facts concerning Dubron as an example. The suit was voluntarily dismissed. Church of Scientology 10-31 Vicki Adler v. American Sun, Inc., Church of Scientology of Los Angeles: This suit alleged emotional distress as a result of Adler's alleged brainwashing by American Sun, a business owned and operated by several Scientologists. The suit was essentially an employment dispute between Adler and American Sun where Adler made Scientology an issue to intimidate the company. The suit was settled and dismissed in 1988. ' Benham v. Church of Scientology Celebrity Center of Dallas. This was a personal injury case in Dallas, Texas. Vicki Benham alleged that she was injured while on the Purification Rundown and that she had emotional distress. The case was settled in 1991 for a refund and nominal nuisance fee which was paid by the insurance company. Michael Burns v. The Recording Institute of Detroit, Inc.. et al.: This case was filed on July 25, 1991 against the Church of Scientology of Michigan, Church of Scientology Flag Service Org and several individual Scientologists, and a recording school owned by a Scientologist. Burns claimed that he was subjected to mind control by the Scientologist from the recording school and that this induced Burns to become involved with Scientology and join Church staff, which prevented him from pursuing his studies in the recording field. The case alleged fraud, breach of contract, intentional interference with a contractual relationship, intentional infliction with emotional distress, and conspiracy. The suit has no merit and is expected to be dismissed shortly. Clay Eberle and Eberle & Jordan Law Firm v. Church of , Scientology of California: Eberle is an attorney who formerly represented refund/repayment claimants suing the Church. His suit alleges that he was damaged when CSC settled directly with some of the claimants as the claimants then did not pay him attorneys' fees. In April 1988, the Court granted the Church's summary judgment motion dismissing the case and ruled that there was a qualified privilege for the Church to deal directly with its former members notwithstanding the retention of an attorney by the former member, and there was no evidence that the Church intended for the persons to breach their attorney/client contracts with Eberle, and no evidence that the Church caused the attorney/client contracts to be breached. Mario Metellus v. Church of Scientology of New York. and Linda Barragan: Metellus was a non-Church member who responded to an advertisement placed by the New York Church for part-time help. After working less than a day, on November 29, 1989 he was dismissed. Metellus refused to leave and the police had to be called in to remove him from the premises. Metellus even refused to respond to the police officer's directions to leave and 10-32 was arrested. When Metellus refused to allow the police to take his fingerprints, he was held in custody. The complaint, claimed that Metellus was falsely accused of criminal trespassing and falsely arrested. Metellus also sued the City of New York. The complaint against the New York Church was settled for a nominal amount. Subparagraph 10.e(ii) In this subparagraph, the Service has asked for a copy of any verdict, decision or judicial finding that any Scientology-related' organization or individual was involved in the commission of an intentional tort or violation of criminal law. Copies of these documents are attached as Exhibit 10-P. There were verdicts, or decisions with judicial findings of intentional torts in only four of the cases discussed on the pages of the prior submission referenced in this question, and all of these cases were discussed in the response to Question 4.d of the Service's May letter -- the Stifler case, the Christofferson case, the Wollersheim case, and the Armstrong case, discussed at pages 10-12; 10-15 to 10-16; 10-16; and, 10-12 respectively, of our prior response. The Service has asked the Church to state whether it agrees with the findings of the Courts in each of the above decisions. The Church's response to this part of the question follows: Lawrence Stifler v. Church of Scientology of Boston: The Stifler case was, for all practical purposes, won by the Church, as the only money judgment in the case was entered against an individual Church member for $979 in medical bills. This was one of Michael Flynn's stable of cases described in our prior response at 10-12. Lawrence Stifler accosted a staff member of the Boston Church, Roger Sylvester, on the streets of Boston, Massachusetts in the early 1980's. Stifler verbally abused Sylvester for attempting to disseminate his religion. Both men lost their tempers and came to blows. As a result of the altercation Stifler suffered a minor injury to his knee. Stifler filed suit claiming $4,250,000 in damages. During the 1984 trial, Flynn attempted to show that the altercation was part of a nefarious Church of Scientology scheme. Flynn sought to introduce his standard retinue of professional anti-Church witnesses in order to reap a large punitive damages award. The Court refused to go along with this charade, bifurcated the Boston and California Churches from the trial and prohibited Flynn from introducing any of his general Scientology issues or "evidence." 10-33 Stifler claimed to have suffered major trauma to his knee which had permanently incapacitated him. Yet, when the evidence was presented at the trial, the defense showed that whatever injuries he may have suffered at the time of the altercation with Sylvester were extremely minor. Evidence supporting this defense included photographs of Stifler engaging in competitive stair climbing up skyscrapers at the very time he claimed to be incapacitated. The jury awarded a mere $979.00 against Sylvester to cover Stifler's medical costs, and the Church defendants were dismissed from the case. The Church disagrees with the fact that Stifler was awarded any money at all. The Church agrees with the dismissal of the Church of Scientology of Boston and the Church of Scientology of California from the case. Church of Scientology v. Gerald Armstrong: We have included some background information here and an epilogue to the decision in question. That is because the Service has continuously thrust the Armstrong case at us, demanding an explanation. The Armstrong case decision was so inflammatory and intemperate that it was used to stigmatize the Church in the legal arena and make other outrageous decisions possible. As we shall demonstrate below, all this decision ever involved was Armstrong's state of mind, which subsequently obtained evidence proved conclusively to be one sordid, sado-masochistic nightmare. Furthermore, Armstrong's state of mind horror stories have fallen on deaf ears in recent litigation. Relying on Armstrong or the Armstrong decision is wholly unjustified. During the later years of his tenure as an employee of the Church, Gerald Armstrong was placed in charge of a huge quantity of documents that belonged to Mr. Hubbard that contained private and personal information regarding Mr. Hubbard. Part of his duties included research to support the work of an author who had been retained to write an authorized biography of Mr. Hubbard. In late 1981 after the initial clean out of the higher levels of the Guardian's Office, and when investigations were turning toward identifying those in alliance or sympathy with the GO, Armstrong suddenly vacated Church premises and left its employ, taking with him huge numbers of confidential documents that belonged to Mr. Hubbard or his wife which the Church was holding as bailee. It was no coincidence that Armstrong left at that time because he had repeatedly expressed his ambition to join the GO and work in Bureau 1 (Information Bureau), the same area of GO that had been responsible for the criminal acts of the 70's. Armstrong also had been a long-time friend and confidant of Laurel Sullivan. Just prior to the take over the GO taking place, Sullivan had made a 10-34 proposal to place convicted GO members into corporate positions of control throughout the top of the ecclesiastical hierarchy. She was also found to be spying on the CMO for the GO during the early days of the CMO's investigation into the GO. Armstrong assisted and supported Sullivan in her efforts. In the summer of 1982 the Church received evidence that Armstrong had stolen thousands of documents from archives when he left the Church. Church counsel wrote to Armstrong, demanding that he return them. Armstrong denied the theft. Once the demand for return of documents was made, Armstrong turned the stolen documents over to Michael Flynn, with whom Armstrong decided he could make a lot of money. In August 1982, the Church sued Armstrong for conversion, breach of fiduciary duty and confidence, and invasion of privacy based on Armstrong's theft of extensive amounts of private papers owned by the Church or the Hubbards. The Church sought return of the papers and the imposition of a constructive trust over them, and any proceeds derived from them, as well as preliminary and permanent injunctive relief against dissemination or disclosure of the private documents. In September 1982, Armstrong, represented by Flynn, answered the complaint and raised the defense that he was justified in stealing the documents entrusted to him as a fiduciary because he wished to make public information about Mr. Hubbard and the Church out of fear for his safety and well-being. His defense was stricken on four different occasions by three different judges. In April 1984, the case was assigned for trial before Judge Paul Breckenridge, Jr. At that time, the Church presented motions in limine to prevent Armstrong from introducing the stolen, confidential documents since their introduction into evidence would vitiate the very rights of privacy the action sought to protect. The Court not only allowed Armstrong to introduce the confidential documents, but also allowed him to raise his four-times stricken defense with a new perverted twist. He would not have to prove there was anything to fear from the Church, but only his state of mind when he stole the documents. The Church was completely ambushed in the trial by these documents, as in most cases Armstrong had stolen the only copy that existed. Then, after he and Flynn had ample time to prepare their case from them, the documents were placed under seal in the Court. Although the inflammatory allegations that Armstrong made and purported to support with these documents could have been shown to be false or grossly distorted by other evidence, the Church had no chance to prepare and put on that evidence before being hit with the documents in court. 10-35 During the trial, Armstrong presented testimony from numerous witnesses who testified for the purpose of establishing Armstrong's supposed "state of mind" with regard to his alleged justification for stealing the documents. Each of the witnesses was hostile to the Church and, in fact, was a plaintiff against or taking a position adverse to the Church in other litigation in which Flynn was the counsel. Each witness gave general testimony about his or her own viewpoint on relationships with the Church in an effort to bolster Armstrong's state of mind justification defense. The Court did not allow the Church to put on evidence to rebut the testimony of those witnesses. The Court also declined to allow the Church to put on evidence explaining the confidential documents and precluded the Church's proffered rebuttal evidence on the ground that the adverse testimony was admitted only for the purpose of establishing Armstrong's state of mind and not for the truth or falsity of the matter testified about. On July 20, 1984, Judge Breckenridge issued a Statement of Intended Decision which became final a month later, which held that the Church had "made out a prima facie case of conversion.... breach of fiduciary duty, and breach of confidence" (as the former employer who provided confidential materials to its then employee for certain specific purposes, which the employee later used for other purposes to employer's detriment). Judgment, however, was entered in favor of Armstrong. The Statement of Decision adopted as the facts of the case the allegations which Armstrong had made in his trial brief. These allegations included the statements on which Armstrong premised his justification defense; i.e., that defendant "... became terrified and feared that his life and the life of his wife were in danger, and he also feared he would be the target of costly and harassing lawsuits." The judge went on to pontificate on the psychological mind-set of not only Mr. Hubbard, but Scientology at large. The only lawsuit that there was to fear was the one that was ultimately filed for return of the stolen documents. It never would have been brought had Armstrong voluntarily returned the documents when asked, despite the theft. The IRS CID, however, absorbed Breckenridge's findings as the definitive statement of what Scientology is, and used this decision and the Flynn witnesses who testified at the trial as the nucleus of their investigation. The Church tried repeatedly to explain to the IRS that the Armstrong decision was nothing more than a statement concerning Armstrong's state of mind. The CID and EO weren't interested, as they found in Armstrong a kindred spirit who echoed their own sentiments. They therefore embraced Armstrong and the Flynn witnesses and used their fabrications as the basis for their investigations and denials of exemption. Evidence found after the Armstrong trial proves not only that Armstrong never was afraid of the Church as he claimed at trial, 10-36 ------------"PART THREE" OF IRS 1023 DOCUMENT------------- Question 1-c c. As part of the response to Question 1 and elsewhere, entities are listed about which the Service has little or no information. Have any of the following entities had, at any time after December 31, 1988, gross assets in excess of $1,000,000 or annual gross receipts/contributions in excess of $250,000 If so, please provide for each such entity the information contained at Exhibit I-9 and Exhibit I-17. Where possible data should be for 1989 and 1990. The entities are as follows: (i) the publication organizations that were first described in your June 29, 1992 response; (ii) Nesta Investments, Ltd.; (iii) C.W. Properties, Inc.; (iv) Dexter Development Company; (v) Graymoss, Inc.; and (vi) Northstar Publishing (disclosed on CSI Form 1120 for 1987). If the entity dissolved or otherwise wound up its operations, please state when and to whom all assets were distributed. (i) The answers relating to the publications organizations are as follows: (1) New Era Publications International ApS Tokyo This corporation did not have gross assets over $1,000,000 or gross receipts over $250,000 at any time since 31 December 1988. (2) Nueva Era Dinamica, S.A. This corporation did not have gross assets over $1,000,000 or gross receipts over $250,000 at any time since 31 December 1988. (3) Importaciones v Exportaciones Nueva Civilizacion S.A. de C.V. This corporation did not have gross assets over $1,000,000 or gross receipts over $250,000 at any time since 31 December 1988. (4) Continental Publications (Pty) Ltd This corporation did not have gross assets over $1,000,000, but it did have gross receipts over $250,000 since 31 December 1988. Therefore, a schedule of its Exhibit I-9 data for 1989 and 1990 is attached. (5) South African Publications Trust This trust did not have gross assets over $1,000,000 or gross receipts over $250,000 at any time since 31 December 1988 1-3 (6) 719008 Ontario Limited This company did not have gross assets over $1,000,000 or gross receipts over $250,000 at any time since 31 December 1988. (7) Scientology Publications Limited This company did not have gross assets over $1,000,000 or gross receipts over $250,000 at any time since 31 December 1988. (ii) Nesta Investments. Ltd. (page 1-45); This company did not have gross assets over $1,000,000 or gross receipts over $250,000 at any time since 31 December 1988. (iii) C.W. Properties. Inc. (page 1-46); This US corporation, which was formed in 1990 as a wholly owned subsidiary of Church of Scientology Religious Trust, was dissolved in September 1991. It did not have gross assets over $1,000,000 or gross receipts over $250,000 at any time since 31 December 1988. All of its assets were transferred to Church of Scientology Religious Trust. (iv}Dexter Development Company (page 1-46); This US corporation, which was formed in 1990 as a wholly owned subsidiary of Church of Scientology Religious Trust, was dissolved in September 1991. It did not have gross assets over $1,000,000 or gross receipts over $250,000 at any time since 31 December 1988. All of its assets were transferred to Church of Scientology Religious Trust. (v) Graymoss, Inc. (page 1-46); This corporation was formed in 1990 as a wholly owned subsidiary of Church of Scientology Religious Trust. It was inactive until early 1991 when it purchased real estate in Clearwater with funds provided by the Trust on behalf of the Trust. It was dissolved in October 1991 and all of its assets were distributed to Church of Scientology Religious Trust. Exhibit I-9 information for 1989 and 1990 is therefore not applicable. 1-4