CRIMINAL COURT BASEL
CITY
JUDGMENT
of 10 June 1987
IN MATTERS 1. (Accused x) 2. (Accused y) charged in criminal court by the State Attorney of Basel City Canton on 27 November 1986 for practicing usury and possible fraud.

Findings of Fact The indictment was based upon the following facts of the case:

I.

The accused x was from December 1983 until March 1984 president of the Basel "Scientology Church," a - according to its own account - "religious" congregation which, based upon the teachings of its founder L. Ron Hubbard "wants to help individuals in obtaining freedom as a spiritual being." In this capacity she was responsible for all the interests of the church, especially for the financial presence.

-2- The accused y was - before she took over the office of president from x in April 1984 - a staff member and board member of the "Scientology Church.

II.

(The injured party) (born 1957, ----------), as a consequence of an automobile accident in 1976 - after a trauma to the skull - suffered from a psycho-organic syndrome and is restricted to a considerable degree in his ability to think and act. As compensation for the results of the accident, he had received an insurance payment in the amount of 100,000 Swiss franks, which had been placed in the form of a bond in the Maennedorf/ZH Commerce Bank.

In September 1983 (the injured party), who was living at the time in Sch. and who was employed in the Labor Center for the Handicapped in Str., came into contact with the "Scientology Church" for the first time in Basel.

After he had been invited by a recruiter on the street to a "personality test" and then took the test in a local office of the "Scientology Church," it was mentioned to him that he was in a very poor way, and that he absolutely had to read the "Dianetics" Hubbard book, which was then sold to him for 45 franks.

On December 31, 1983 (the injured party) took up a written invitation from the "Scientology Church" to visit an event at the Seegarten Restaurant in M., where the people he met included the accused x and y. Invited by both of the accused, on New Year's Day 1984 he went to 432 Gundeldinger Street, the seat of the "Scientology Church Basel" at the time. The accused y, who received him, used this opportunity to sell him the course "Success through Communication" for 100 franks -- along with the book that went with it for 43.30 franks, upon which (the injured party) started this course on the same day, and - allegedly because of a failure and after payment of a further 95 franks - also -3- had to take the "Ups and Downs of Life" as well as acquire the "Ups and Downs Book" for 54.70 franks.

III.

Practicing of Usury, possible practice of fraud After the accused, x and y, learned from (the injured party) that he had a fortune at his disposal, they promised him in a following visit, at the beginning of January 1984 in Basel, that he would markedly improve his mental and physical abilities by taking other courses offered by the "Scientology Church, and would thereby be able to gain the potential of obtaining a good work position.

1. By deliberate exploitation of his mental and character weaknesses and by deceitful pretensions that he could shed a large portion of his invalidity by using the methods of Dianetics and Scientology, the accused, x and y, intending to enrich themselves to an unjustifiable degree, induced (the injured party) to pay 3,704.40 franks in advance for a so-called "Purification Rundown" on 3 January 1984.

They were aware at that time that the amount of this payment for the services being provided - consisting solely of visiting the church's private sauna on Gundeldinger Street for about two to three weeks, along with taking vitamin and other preparations - was a blatantly unfair exchange and, in spite of their assurances, was not suited to bring about a noteworthy improvement of physical or mental health.

-4- 2. A few days later, the two accused disclosed to (the injured party) in Basel, that for the successful treatment of his ailments, further courses would be necessary, for which he would have to pay a total of 59,000 franks.

Although (the injured party) attempted to shield himself from this demand, the accused, x and y, managed, by renewed exploitation of his weakness of discretion and by exaggerating - by cunning pretension, since they knew it could hardly be realized - his chance of being cured, to get him to mortgage his bond for a bank loan of a matching amount.

On 11 January 1984, the accused, y, drove her personal vehicle to Str., picked up (the injured party) at his place of work at the Labor Center for the Handicapped and drove him to Z. to a branch of the General Aargau Savings Bank, where the two were received by bank loan officers. Obeying the instructions given to him by the accused, y, (the injured party) obtained a loan for 59,000 franks, which was basically secured with what was left of his bond.

On 13 January 1984 the accused, y, once again looked up (the injured party) in Str., had him sign a filled-out form so that a direct deposit in the amount of 59,000 franks would be made to the account of the "Scientology Church" in the Basel Volksbank, and sent him with it to the bank at Z. After the formalities had been completed, the planned transfer of funds finally took place on 19 January 1984.

According to the receipt filled out by the accused, x, for (the injured party) -5- - without his cooperation and without further communication - the amount paid was valid for the following "services":

Receipt Nr. 13691 12 "Intensive" and 1 "Sunshine Rundown" Fr. 45.290,30 Receipt Nr.13692 "HQS" Course and "Solo 1"- course Fr. 4.747,15 Receipt Nr. 13693 1 Mark VI E-Meter" with var. technical manuals on Scientology and Dianetics Fr. 6.730,50 Receipt Nr. 13694 var. course documents and cassette tapes of lectures by L. Ron Hubbard Fr. 1.401,50 Receipt Nr. 13695 "Installment" for books Fr. 830.55 Total Fr. 59.000.-- This unjustifiable enrichment gained by "Scientology Church" required from (the injured party) and in exploitation of his mental inability through deception was obviously disproportionate to the services promised. For instance, he was given a bill for an "e-meter" which has a material worth of, at most, 200 franks for 7,786 franks (inc. 20% rebate) and 12 "intensives," each consisting of 12 hours of "auditing" (hearing from a Scientologist) for 46,665 franks (inc. 5% discount for pre-payment).

Moreover, these "courses" and "instructional aids" had been in no way suited to help (the injured party) in decisively improving his conditions of health as had been dangled before him by the accused.

-6- IV.

With the knowledge that (the injured party) had another 41,000 franks at his disposal, and intending to secure the rest of his fortune for the "Scientology Church," x, a short time later, assigned sect member R.F. to talk him into getting another loan in the amount of 41,000 franks. This amount was to be given to another member (J.B.) as a loan by (the injured party) for payment for courses from the "Scientology Church."

In the beginning of February 1984 F. and B. looked up (the injured party) in Str. in order to set up the planned loan. The deal was not concluded, however, because the employer and the parents (of the injured party) learned of it and put a block on his bank account in time, and established a guardianship for (the injured party).

As a consequence (the injured party) broke off his relationship with the "Scientology church."

V.

As a result of an agreement of 23 July 1986 between the legal representatives (of the injured party) and the "Basel Scientology Church," the injured party was paid back 62,000 franks on July 29, 1986.

- 7 - VI.

The accused, x and y, were released on their own cognizance.

Considerations I. Factual and Legal The facts of the case, as the indictment describes them, were not stipulated, in objective hindsight, by either of the accused, so this was established from an exterior setting. Both of the accused vehemently denied the subjective side of the events, i.e., both asserted that from their perspective, (the injured party) never appeared mentally handicapped, that there was never any question of misuse of services and counter-services, and that the services of the Scientology Church had been of considerable financial use to them which they had considered to be appropriate (see attached testimonies of the accused HV Prot. p. 6-21 and 36-40 as well as the testimonies in the investigative proceedings).

Based on this circumstance, the primary question is whether the two accused could or would have been able to recognize the effective condition of (the injured party).

Here it must be ascertained that the state of (the injured party's) health described in the charges can be clearly established through objective means. At the top of the list here are the various doctor's reports (see records p. 40, 41-2, 44-5, 46), which diagnose serious brain damage in the sense of a psycho-organic syndrome for (the injured party) as a result of an accident. Disturbances of memory and thought are characteristic for this injury (see attached from Bleuler p. 186). As can be further gathered from the doctors' reports, the psychological condition of (the injured party) is expressed in ways which include forgetfulness and not being able to relate to reality, i.e., he has demonstrated limited mental - 8 - capacity, which has made it necessary that he be placed under guardianship. As can be gathered from the medical opinions, (the injured party) exhibits a 75% disability, which is the maximum category in actual practice, and which comes close to 100% disability. On the basis of this condition, (the injured party) was accepted into the Labor Center for the Handicapped in Str., where he received an hourly wage of 3.27 franks for carrying out the easiest chores.

(The injured party's) easily recognizable limited mental condition was observed by the bank officials (records p.

67-8) who informed the parents (of the injured party) after a second meeting for a loan, which then led to guardianship. In this context, it can be further seen from the statements of Scientology members B. (records p.

98-100, F. (p. 93-7) and K. (p. 106-8), which all confirm that the handicap was noticeable to them.

(The injured party) was heard as a witness in today's primary proceedings (see testimony HV Prot p. 21-36).

During this intensive questioning, the court itself could form a picture of him which incontrovertibly demonstrated that for every lay person, it was recognizable from the first glance that (the injured party) was a man who was considerably mentally handicapped.

The form of (the injured party's) expression, along with his unmistakably extreme slowness in diction and response, left no doubt that this was a severely handicapped person. That was indicated in this context in the records of the main proceedings (records p. 21-36, incl. comments). The symptoms which were ascertained by the court were conspicuous enough so that it would have to be said that they could have escaped neither of the accused in their contact with (the injured party).

In today's main proceedings, both of the accused took the position that they were shocked, today, at the condition of (the injured party), they said it had obviously worsened (see HV Prot. p. 29). To this objection, which has to qualify as extraordinarily unhelpful and even tactless, - 9 - it can only be responded that the objective condition (of the injured party) has improved during the past three years, since he was able to get a better wage of employment on the outside today - even if in a limited capacity. Altogether, it can be clearly determined that the psychological condition (of the injured party) has gotten better during this period of time rather than worse.

The objection made by both the accused that (the injured party) had passed the intelligence test given by the Scientology Church with 100 points, whereby they could clearly see that he was mentally fit (see HV Prot. p 15/16), cannot be heard. The questions in this so-called IQ test are given in a primitive environment - and have not the least in common with acknowledged IQ tests - so that it has to be determined that these type of questions can be answered by even the least qualified, and are therefore no indication at all of ability to express oneself.

Altogether it has to be said that (the injured party's) severe mental limitations are unmistakable and that they could not have remained concealed from the two accused. In spite of this perception, the two accused sold (the injured party) the sauna visits mentioned in the charges, books, various courses, etc., for a grand total of 59,000 franks by telling (the injured party) that he would improve his mental capabilities which would enable him to get a better job (see (the injured party's) statement HV Prot. p. 21-36). It is undisputed that the accused, x, gathered an amount of 59,000 franks from (the injured party) and deposited it into the bank account of the Scientology Church. The fact that (the injured party) could be talked into departing with the majority of his wealth that quickly clearly shows the degree of his discretionary ability.

- 10 - In fourteen short days he handed over a total of 62,000 franks to the church of which he hardly knew a thing, and it is quite clear from his testimony that he did not want to make a donation to the church, but that he expected help in getting better work.

Now the question arises of whether the accused, through their conduct, have exploited the mental incapacity of their victim and if there was an evident incongruity between services offered and services rendered, as is necessary in the commission of usury.

Even if the word "price" is avoided in favor of "donation"

in the documentation of the Scientology Church, it is nevertheless clear that the offered services have fixed prices, and that these must be paid in advance. That means that price and service are related to each other objectively, and the expense can be effectively estimated.

The fact that this money is needed for the advance and expansion of the organization, as has been made clear by the accused, cannot be relevant. The only thing which (the injured party) wanted for his money was the cure of his illness and a better job; without doubt that was also the only thing that he had understood of the Scientology teachings. It must be mentioned in this context the the letter from the Scientology Church to the advisor (of the injured party) also indicated "that the possibility existed that (the injured party) would lose a large part of his invalidity and could once again reach his full mental potential" (see records p. 49d). All the statements which (the injured party) had to sign in which he had to confirm that he understood all the documents he received, including the "Dianetics" book, are rated to be the sheer application of alibi. His inability to understand any of it is shown by the fact that the reading comprehension of (the injured party) is on the level of comic books and horror stories (see comment HV Prot. p. 28).

- 11- As the first service, a "Purification Rundown" was sold to (the injured party) by the accused on January 3, 1984 for a price of 3,704.40 franks. This Purification Rundown amounted to a sauna cure which included taking various vitamin tablets. A comparison of services and price reveals that the use of a sauna costs, on the average, between 10 and 20 franks, and the vitamin tablets could cost, at most, several franks. Since taking the entire service meant that (the injured party) would have to go into the sauna daily for two to three weeks, this, at a cost of 20 franks per visit, would have come to a maximum worth of 400 franks. The objection on the part of the accused, that these services were very expensive as a result of significant costs, cannot be accepted; this is only an attempt on the part of the accused to place the whole matter in a medical-therapeutical light which bypasses the facts. In the sauna reports (see Sep. attachment I), it can be seen without a doubt that the whole undertaking consists of a banal sweat cure which would give (the injured party) nothing outside of a feeling of heat and thirst. Since there is a crass disproportion in the price of this Purification Rundown between the services offered and the services tendered, no more need be detailed on this account.

The price-to-services ratio of the "package" sold to (the injured party) for 59,000 franks falls wide of the mark.

This was to cover 12 so-called "intensives," including 1 Sunshine Rundown, which were listed for the hefty sum of 45,290.30 franks. The exact breakdown is 12 segments of 12 hours each of auditing (interrogation sessions by a scientology adherent) conducted by, mostly, very young people who enjoy no kind of recognized education. When one calculates the price per hour, it comes to about 315 franks. An hour at a degreed psychiatrist's, by comparison, is 150 franks. It would be very difficult to provide obvious proof that this type of spiritual counseling - 12 - is outside the scope of good and evil. It is mentioned only in passing that the circumstance under which the weakly gifted (injured party) was sold about 150 hours of session in one fell swoop, when it was known that next to nothing could be accomplished with his abilities and with completely unqualified people, can only be described as unconscionable. It is also mentioned in this context that the auditing reports in the separate enclosure I consist of completely illegible sheets of paper. As further service, an "HQS" course was sold to (the injured party) - along with a "Solo 1" course for the price of 4,747.15 franks.

Even though both accused have been members of the Scientology organization for years and have taken courses up to "clear," they sold (the injured party) courses which they had not taken, since they had not reached this level yet, according to their testimony (see HV Prot. p. 40). This course was sold to him because, according to testimony from the accused, y, it made a "more favorable package," although he would have had to attain the level of "clear" first (see attachment p. 142).

There are hardly words to describe the relentlessness which lies in this relationship of price to services in this sale. It may not be overlooked that (the injured party) had to struggle to sleep in taking these services, since he was not able to understand what was being done with him. In this situation he was sold courses for his near, far and furthest-term future with no regard as to whether he would ever be able to take them. Also the fact that the psychically ill person was sold courses in two short weeks which neither of the two accused had been able to take after years of having belonged to the questionable organization as a "special action" make the tactics of the two accused more than clear. The other services are analogous to this one, for instance the e-meter, for which a price of 6,730.50 franks was named, and which is to be used for spiritual processes in a dust-free room. Apart from the fact that this device, according to a report by the Institute for - 13 - Physics of the University of Basel yields a material worth of from 100 to 200 franks, it, according to an instructional pamphlet in the teachings of Scientology (see records p. 142), is supposed to be used after one has reached a "clear" state, from which (the injured party) was far removed. The picture was rounded out, then, through course documents to the amount of 1,401.50 franks and particularly by the last entry on the invoice, "payment for books" in the amount of 830.55 franks.

This last entry shows with the highest clarity desirable for that the invoice was calculated out to the last cent for the purpose of relieving (the injured party) of 59,000 franks at one stroke. This machination legally qualifies as exploitation in accordance with the law. It puts a picture book in hand of how the two accused exploited the mental incapacity of (the injured party) in order to obtain a fortune for the Scientology Church which it would never have obtained under normal conditions. In this finding, the belief of the two accused in the Scientology Church cannot change anything, even so little as could their statement of retribution make up for damage done after about 2 1/2 years and intensive efforts on the part of (the injured party's) guardian.

Altogether it is found that both accused had to have been able and did recognize the obvious incapacity of (the injured party), and exploited this in the crassest way. No doubt, therefore, can remain that the subjective findings of fact have been fulfilled; both of the accused are, as pertains to the charges of practice of usury, guilty.

II Degree of Punishment The culpability of the two accused is described as serious. The amount of the misdeed of about 62,000 franks, is extremely high, especially in view of the fact that it is the total wealth of (the injured party). Both of the accused proceeded purposefully, stubbornly and ruthlessly to obtain (the injured party's) money in the shortest time possible.

- 14 - This desire for profit becomes extraordinarily repulsive, as the two accused also had to have been aware, in that the severely handicapped person was completely dependent upon his insurance payment. Their procedure can be described as nothing other than unscrupulous. The desire for profit and the disregard for any moral limitation which the accused exhibited are extremely reprehensible.

The fact that both the accused are long-term members of Scientology whose senses have possibly already been somewhat dulled through the practices of this institution may also explain their lack of insight in the crass injustice of their deed. The assertion by the accused that they, themselves, have already afforded high sums for the organization may not extenuate the judgment in the present matter. What the accused themselves may have invested is not of significance here, since the both of them are healthy, young women who are accountable for themselves.

The culpability may be viewed with a less harsh light when one considers that the accused were dealing primarily in the interests of their community of faithful, however, in spite of everything else, it cannot be overlooked that a unique, if also more decisive, advantage was connected with this for them, since their pay is dependent upon sales.

In favor of the two accused is the lack of prior convictions (see preliminary report file p. 3, 14) as well as the condition that both have unsullied reputations.

Not to be held in favor of the accused was covering the damages, which was a long time in the coming and occurred only under pressure of criminal proceedings.

Even though the circumstances listed under Part IV of the charges do not specify charges for x, there is no hiding that x also had the intention to relieve (the injured party) of his last 41,000 franks, which reflects upon her reputation.

- 15 - In consideration of all the above named circumstances, a differentiation in the degree of punishment appears to be indicated in regards to the two accused, with the accused, x, as the one more primarily accountable for the financial consequences. The 8 months imprisonment being asked by the state's attorney for x and 6 months for y is held by the court, in view of the crass guilt in casu, as far under the justifiable limits.

The circumstance that the accused was operating primarily for the organization alone rather than for her own pecuniary interest permits the punishments be set at 12 month imprisonment for x and 11 months imprisonment for y.

Because of lack of prior convictions and a favorable prognosis of the conditional execution of sentence, the minimal probation period of two years is approved.

A fine can be associated with the confinement, 1,000 franks for x and 900 Swiss franks for y.

III. Accessory Points The separate attachment I, Scientology folders of (the injured party), are, since they were used in the commission of a punishable offence, confiscated in accordance with Art. 58 Abs. 1 StGB.

The confiscated E-meter and 6 pill-shaped preparations will be given back to the Scientology Church Accordingly the CRIMINAL COURT finds x and y are declared to be guilty of the practice of usury and sentenced 1. x to 12 months imprisonment suspended with a probation period of 2 years, as well as a fine of 1,000 franks which if not paid will be commuted to confinement, in accordance with article 157 number 1 and 41 number 1 of the criminal code.

2. y to 11 months imprisonment suspended with a probation period of 2 years, as well as a fine of 900 franks which if not paid will be commuted to confinement, in accordance with article 157 number 1 and 41 number 1 of the criminal code.

The separate attachment I, Scientology folders on (the injured party) will be confiscated in accordance with article 58 paragraph 1 of the criminal code.

The confiscated E-meter and 6 pill-shaped preparations will be given back to the Scientology Church.

Those convicted will bear their own costs, of the general costs each will bear half as well as judgment fees of 1,500 franks each.

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