Shifty business: Times inquiry finds secret debits, deception after Scientology 'Basics' released

BY JOE CHILDS AND THOMAS C. Tobin Times Staff Writers

Church of Scientology staffers were under so much pressure to sell the scriptures known as "The Basics" that some debited thousands of dollars from parishioners' church accounts without their knowledge or permission, a St. Petersburg Times investigation has found.

The church acknowledges the wrongdoing, saying "isolated instances of unauthorized debits'' surfaced in a year-end audit.

Seven members of Scientology's religious order, the Sea Org, manipulated accounts, the Times found. They tapped into church computers to debit accounts for materials parishioners hadn't ordered — and in some cases had repeatedly refused to buy, according to former church insiders and a review of account statements.

In one case, four church staffers in Clearwater diverted $75,000 from the account of a California parishioner. When she found out, she fired off a formal complaint to church brass. "These are criminals stealing money," wrote Carisa Marion, a Scientologist for more than three decades.

The church said that "in each and every instance" parishioner accounts were corrected and the staffers disciplined. Workers were removed from posts involving finances "where appropriate.''

The Basics are re-edited books and CDs containing Scientology founder L. Ron Hubbard's core writings and lectures. Church staffers started aggressively selling the 18 volumes and 14 packages of CDs in June, 2007. The price for a set was $3,000. The church imposed daily sales quotas as high as five sets per staffer, the former insiders said.

Scrambling to meet their quotas and avoid punishment, church workers resorted to unauthorized debits, former members said.

The church characterized the unauthorized debits as a "misallocation of funds, not felony theft." It said it considers parishioners' pre-payments for services to be donations that become church property. So while diverting funds was not appropriate, it wasn't theft.

"Indeed, in the United States, most parishioners claim tax deductions for their donations, indicating they have relinquished ownership of the funds,'' the church said.

One former insider disputed the church's contention that parishioners didn't lose anything.

"The effect on the person was the same as if they'd stolen money from them," said Hy Levy, who sold services for 16 years at the Clearwater spiritual headquarters. "That was money that they were going to use for services. Then it was gone."

Carisa Marion, 50, of Spokane, Wash., once owned a bungalow in Clearwater near the Scientology campus. The church wanted the property to make room for expansion. In October 2005, it paid Marion $1 million for it.

As part of the deal, Marion agreed to return $500,000 to the church, putting it in an account for her and her family to use for services.

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When the Basics went on sale, Marion, then living in Castaic, Calif., still had more than $350,000 in the account. The big balance likely made her a target, she now thinks.

She used some of the money to buy three sets of the Basics, one for her, two for family members. Her bookseller was a Sea Org member in Los Angeles who ensured Marion and others received quality counseling sessions at Scientology's big complex in Hollywood. He had sold her church materials before. She told him: No more Basics.

But weeks later, he pitched the sets as a way for her to repay a favor. He called Marion with good news: The counselor she had been waiting three months to see finally was available. He added: We just want you to buy two more Basics packages.

"I couldn't believe it,'' she said. Again she told him: No more.

About 10:45 that night, three church staffers showed up at her house unexpectedly. They knocked and knocked, but she didn't answer. She knew they wanted her to buy the Basics, she said.

Days later a Sea Org captain asked her to buy a set so the church could give it to the mayor of Santa Clarita, Calif. She told him no.

She intended to say no to a Clearwater staffer who called, pleading with her to buy four sets to boost the morale of the sales crew there. Marion gave in to this caller, agreeing to transfer $7,100 from her account for spiritual services to a separate account designated for book purchases.

After five months of pitches, she'd had enough. On Dec. 4, 2007, she complained to church officials. "I'm tired of being hounded for more book packages,'' she wrote in a formal complaint called a "Knowledge Report.''

It didn't stop the sales pressure. Two months later, while she was waiting to start an important auditing session at the Hollywood church, a staffer took her to the chaplain's office. More comfortable here, he said.

Two more staffers came in. The three Sea Org members asked Marion to buy 16 sets of Basics, she said. Their pitch: The church would deliver the sets to her house and other parishioners would take them and sell them. The sellers would repay her.

Marion didn't want to do it. She wanted to do her auditing. She said the staffers kept telling her: We need your help.

She held out for five hours.

"It felt like it was never going to end. I finally gave up,'' she said.

Marion told them they could debit $30,000 from her account. The church delivered 16 Basics sets on a wooden pallet. They sat in her living room for months. No one showed up to sell them.

Clearwater Sea Org staffer Stephanie Bills tapped into Marion's account a few days later, Marion's account statement shows. She pulled out $3,625 — without permission, Marion said — to pay for individual titles in the Basics series. Those books were sent to Marion's brother in New York City.

It was February 2008, seven months into the Basics campaign.

Marion found out when her brother called saying: What are these? He already had those titles.

Marion contacted Christine Revell, head of the treasury division of the Clearwater church, demanding that the books be picked up and the debits restored. Revell promised to do that, but the sales frenzy continued.

In mid July, Clearwater ethics officer Jarrod Kelly phoned Marion to propose a deal. Several of her 16 packages were incomplete. Kelly said he would have UPS pick up eight flawed sets and deliver four new sets, plus an additional series of Hubbard lectures that go with the Basics scriptures. He also would put $5,000 back into her account.

Marion said okay, but she insisted the debit not go through until her sets were picked up.

That didn't happen. Kelly debited four sets and UPS delivered them to Marion. Now she had 20. The four new sets sat on a pallet in her driveway, sprayed by her sprinklers.

It took a week of phone calls, but Marion got the church to pick up all 20 sets and promise to restore her account for those debits.

What she didn't learn until later: One day after proposing the swap, according to her account statement, Kelly debited another $15,000, without her okay, for four more sets that were to be donated back to the church to distribute.

Then in September, two more Clearwater staffers phoned Marion. They promised to fix errors in her account. Jesus Martinez and Jose Luis Martinez went over her ledger line by line, keeping Marion on the phone for several hours over three days.

They also asked her to buy 20 sets of Basics. These would go to a Scientologist in Italy who would sell them and pay her back.

"I told them repeatedly, no.''

By now, she'd been asked to buy four dozen sets in all.

While on the phone with Martinez and Martinez, Marion asked to see an account summary. It would show any corrections. The staffers faxed a statement at 10:10 p.m. showing an available balance of $278,374.55. Marion knew that was wrong.

The staffers "had been lying to me the whole time'' when they said they were fixing problems, she said.

Marion told them: You didn't fix a thing.

Sixty-five minutes later, they generated a second statement and faxed it to her. The available balance had jumped more than $71,000, to $350,121.54. A prepayment for 12 1/2 hours of Scientology counseling had gone into Marion's account since the first statement was sent.

"Obviously a complete lie,'' she said. "All they did was add $70,000 to try to show me they fixed it.''

Marion demanded a detailed account summary. After a three-week wait, she got one. It showed an entry that stunned her: Jose Luis Martinez had allocated $56,535.01 for the 20 sets of Basics that Marion had refused.

She was furious.

She sat down at her computer and wrote another Knowledge Report. She titled it "Financial Crimes.''

"This is criminal activity. This is gross. It needs to stop,'' she wrote.

"Did they really think they would get away with hiding a $56,000 transaction?"

Clearwater staffer Paola Bond's Basics quota was five sets a day — $15,000 in total sales, said her boss, Hy Levy, one of five "registrars'' at the Clearwater church. She started strong, selling numerous sets as Scientology launched its campaign.

Only after Bond was removed as Levy's assistant did he learn what she had been up to.

Using her access to church computers, Bond diverted about $80,000 from a few parishioner accounts to get credit for Basics sales, said Levy, who left the church in 2009.

She drained the account of a deceased parishioner after phoning his home and learning of his death, Levy said. The survivors were not Scientologists.

Bond told them that only a small balance was left, nothing they'd want back, when in fact a few thousand dollars were in the account, Levy said. She used it to buy Basics, getting credit for several sales.

Bond and church treasury chief Charles Moniz also manipulated the account of a wealthy Mexican Scientologist in a way that freed up money for Basics, Levy said. The parishioner didn't notice until she traveled to Clearwater to receive her services.

Church officials disciplined Bond by sending her to a Sea Org work detail called the Rehabilitation Project Force for several months, according to Levy. While on the RPF, Sea Org members work in silence to reflect on their actions. They are isolated from their spouses, segregated from other staffers at meals and sleep in designated areas.

Moniz was sent to the RPF later, Levy said.

The church said it disagrees with Levy's account of Bond's "alleged actions'' but did not elaborate.

It added the church investigates any complaint about parishioner accounts "until it is resolved" to everyone's satisfaction. Staffers guilty of "financial irregularities" are disciplined.

More than Bond and Moniz were manipulating accounts, Levy said. "It was so rampant.''

Sea Org officers combatted it by canceling computer passwords of some staffers, Levy said, and reducing the number of staffers authorized to write invoices, which were required for each sale.

Church officers also ordered software modified so they could freeze select accounts.

The idea of calling the police about the unauthorized debits apparently never came up.

"Are you kidding?" Levy said. "It is a closed community. We handle our own laundry … You just wouldn't dream of going to the police.''

In Los Angeles, even dead parishioners "bought" the Basics.

A senior Sea Org officer logged sales by debiting the dormant accounts of the deceased, said Lisa Hamilton, who supervised several departments.

She said she personally saw the officer, Jon Lundeen, and his deputies searching computers for such accounts. A Sea Org investigation determined that Lundeen debited five accounts.

"I absolutely know that,'' Hamilton said.

The church said it would not discuss Lundeen or the cases of any other staff members.

The Times asked to interview the Sea Org members named in this story. They work and live in a highly restricted environment and are not reachable by phone. The church declined to make them available.

Hamilton left the church in the summer of 2008 after 22 years in the Sea Org, dismayed that the Basics push and other appeals for money were taking staffers away from religious work.

She said Lundeen faced a "Committee of Evidence,'' a key part of the church's internal justice system. The "ComEv'' recommended that Lundeen be removed from his post, but he never was, Hamilton said.

"He was protected. If you could make money, you were protected,'' she said.

In Scientology, that kind of immunity is called "ethics protection," a term coined by Hubbard.

The founder valued a worker's statistics over all else. Productivity outweighed wrongdoing.

"We are not in the business of being good boys and girls," Hubbard wrote in a September 1965 policy letter. "We're in the business of going free and getting the (church) production roaring."

He said a worker "can get away with murder so long as his statistic is up." And if someone reports a top producer for doing something wrong, "what you investigate is the person who turned in the report."

That didn't happen to Carisa Marion. After complaining repeatedly about people monkeying with her account, Flag's treasury chief apologized in writing.

"I want to reassure you this matter has been investigated,'' wrote Christine Revell. She told Marion that her account had been frozen again "so there can be no further unauthorized debits.''

The church eventually restored all the money improperly debited from her account, which stood at $399,161.81 at the end of last year.

The church didn't comment specifically about the debits of Marion's account. It said simply that she was expelled from the church.

Marion said that's not true.

Last December, she sent the church a resignation letter, saying she continued to believe in Scientology but had no intention of joining an organized religion ever again. She was frustrated. Her church in Hollywood had denied her services for eight months because she had written a Knowledge Report accusing church executives of "treason" for their response to a CNN news report about Scientology.

When she resigned, she demanded the church return the money in her account. After waiting for months and thinking the church was stalling, she filed complaints with the Better Business Bureau and Pinellas County Consumer Services. She hired a lawyer and frequently contacted church officials, requesting action.

Last month, she told the church she was participating in a Times story and suggested it would look good for Scientology if it repaid her.

Marion got her money in a cashier's check that arrived on Halloween.