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