Babbitt’s Gambit: Recasting Garcia Federal Fraud Lawsuit Against Scientology

Type4_PTS

Diamond Invictus SP
Breaking news from deep within the Underground Bunker:


"After several months delay in the federal fraud lawsuit that Luis and Rocio Garcia brought against the Church of Scientology, the Garcias have filed a surprising new motion: They’re dropping three defendants from the suit and asking Judge James Whittemore for the right to amend their original complaint.

If you remember our previous reporting on this lawsuit, you know that late last year it hit a snag. More than nine months after the suit was originally filed in January 2013, Scientology notified the court that the Garcias had committed a basic error. The Garcias had sued in federal court in Florida, even though the Garcias themselves and the trustees of some of the Scientology entities they were suing live in California. This appeared to violate a legal concept known as “diversity jurisdiction,” and Scientology asked to have the case dismissed."
...

"We asked one of our legal experts about Babbitt’s move here, and got this response…"


<snip>

Read Full Post: http://tonyortega.org/2014/03/28/te...fraud-lawsuit-against-scientology/#more-14063
 
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Type4_PTS

Diamond Invictus SP
Re: Ted Babbitt’s Gambit: Recasting the Garcia Federal Fraud Lawsuit Against Scientol

Some earlier information can be found over here:

http://tonyortega.org/2013/01/23/sc...d-over-refund-scheme-more-plaintiffs-to-come/

http://www.forum.exscn.net/showthread.php?30168-COS-sued-for-fraud&highlight=Luis+Garcia+lawsuit

http://www.forum.exscn.net/showthread.php?33355-Garcia-v-Scientology-Federal-Fraud-Lawsuit-Pre-Trial-Hearing-October-2013&highlight=Garcia+lawsuit

http://tonyortega.org/page/2/?s=garcia+lawsuit&submit_x=14&submit_y=7


Also, cross-posted from the Bunker:


garcia_zpsb69baa08.jpg
 
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Knows

Gold Meritorious Patron
Re: Ted Babbitt’s Gambit: Recasting the Garcia Federal Fraud Lawsuit Against Scientol

Breaking news from deep within the Underground Bunker:


"After several months delay in the federal fraud lawsuit that Luis and Rocio Garcia brought against the Church of Scientology, the Garcias have filed a surprising new motion: They’re dropping three defendants from the suit and asking Judge James Whittemore for the right to amend their original complaint.

If you remember our previous reporting on this lawsuit, you know that late last year it hit a snag. More than nine months after the suit was originally filed in January 2013, Scientology notified the court that the Garcias had committed a basic error. The Garcias had sued in federal court in Florida, even though the Garcias themselves and the trustees of some of the Scientology entities they were suing live in California. This appeared to violate a legal concept known as “diversity jurisdiction,” and Scientology asked to have the case dismissed."
...

"We asked one of our legal experts about Babbitt’s move here, and got this response…"


<snip>

Read Full Post: http://tonyortega.org/2014/03/28/te...fraud-lawsuit-against-scientology/#more-14063

Wow - my postulates are sticking! :happydance:It has been another devastating week for David Miscavige and his cult - and all we needed was to hear from Luis Garcia to remind him - The SP's are relentless, daunting and resolute!:yes:
 
Re: Ted Babbitt’s Gambit: Recasting the Garcia Federal Fraud Lawsuit Against Scientol

EXCELLENT !!!! I love it when I can answer the question my family knows they have to ask me every night. "What happened in $cientology today?"

Piercing the veil... any year now...
 

Knows

Gold Meritorious Patron
Re: Ted Babbitt’s Gambit: Recasting the Garcia Federal Fraud Lawsuit Against Scientol

EXCELLENT !!!! I love it when I can answer the question my family knows they have to ask me every night. "What happened in $cientology today?"

Piercing the veil... any year now...

Well I'll be - must be some type of EP from getting hurt by Scientology!

My family too. Everyday - we are like - "so, anything happen today to the cult? Miscavige? Start from the beginning and don't miss a beat"!:hyper::hyper::hyper::hyper::hyper::hyper::hyper::hyper::hyper::hyper::hyper::hyper::hyper::hyper::hyper::hyper::hyper::hyper::hyper::hyper::hyper:
 

Type4_PTS

Diamond Invictus SP
A good exchange in the comments section at the Bunker between John P and TX Lawyer as concerns this (and future) lawsuits:

John P.4 hours ago The real question in this move is how the defendants could recover damages by focusing on Flag instead of trying to involve the whole chain of entities in the organization.

On the one hand, a sizable chunk of revenue from Flag is moved immediately through the various higher-level entities to safety away from the seizure capability of the US government. There's undoubtedly very little cash on the balance sheet, as various bill-paying problems would suggest (including the Florida liquor commission putting the restaurants in the Fort Harrison on a cash-only basis last Fall for failing to pay their booze wholesalers in a timely manner). And particularly if this petition is granted, then the cult will undoubtedly be even more aggressive about sweeping cash from Flag "uplines" than it has been previously.

On the other hand, if that's true, then a judgment against Flag could end up significantly disrupting services, as the lack of ready cash means the Court orders them to pay any damages awarded to the Garcias from future revenue, starving the cult of the ability to operate normally. Some chunk of Flag revenue must be paid promptly to food suppliers and other outside vendors to keep the operation rolling, a far higher percentage that at regular orgs where the only payments to non-culties are likely to be basic utility bills. If food vendors don't get paid on time, they're not shy about cutting off restaurants behind on their bills; they've seen that death spiral too many times before. So imagine the impact on the cult if it is unable to get food to service the Fort Harrison guests, and even to serve its own people. It simply can't operate, and it fails to operate in front of its best customers, those who can afford to come to Flag for weeks of very expensive services.

I have said before (including one scenario for the collapse of the cult, which I recently published on my blog) that a wave of additional suits and potentially even significant class action litigation could be waiting upon the success of the Garcia suit as a test case. Dropping the three trust defendants from the case means that this case won't be the one that pierces the complex corporate structure to expose Sea Org reserves and Int Management reserves (the really big money) to collection in a judgment. That doesn't mean that the corporate structure can't be unraveled in a future case, just that this case won't cover as much ground as a blueprint for future litigation as it might have done.


  • TX Lawyer3 hours ago You don't have to name the alter egos as defendants or pierce the various corporate veils in the initial lawsuit. If Flag defrauded the Garcias, they can get a judgment against Flag for those damages, then seek to collect the judgment against Flag. If Flag doesn't have enough money or assets to satisfy the judgment, they can then file suit to establish the other Scientology entities' alter ego/veil piercing responsibility for the judgment against Flag. If they try to squirrel away Flag's assets to other Scientology entities in order to avoid an actual or prospective judgment against Flag, the Garcias could then sue those other entities for fraudulent transfer. And in the meantime, any new money or property that came into Flag post-judgment would be just as garnishable as any pre-judgment assets.
 

CommunicatorIC

@IndieScieNews on Twitter
Scientology answers the Garcias — And turns over a trove of internal documents

Tony Ortega: Scientology answers the Garcias — And turns over a trove of internal documents
http://tonyortega.org/2014/03/29/sc...ver-a-trove-of-internal-documents/#more-14085

Excerpts:
Yesterday, we told you that Luis and Rocio Garcia had taken an interesting new direction in their federal fraud lawsuit against Scientology. After spending a few months gathering evidence about several Scientology entities, they decided to drop three Scientology trusts as defendants, and then requested the right to amend their original complaint.

They filed that request on Wednesday, just one day before Scientology was due to make its own filing to support its motion to dismiss the lawsuit on jurisdictional grounds.

We have Scientology’s filing, below. * * * *
And here are the supporting documents…

EXHIBIT A
: Answers from the US IAS Members’ Trust, including the names of trustees (Carol Bragin, Linda Hamel, Mislav Raos, and Carol Warren)
EXHIBIT B: Answers from CSRT, including names of trustees (Glen Stilo, Mary Huber, Guillaume Lesevre, Catherine Rinder, and Dave Petit)
EXHIBIT C: Declaration of Guillaume Lesevre (Scientology’s legendary ED Int, who says he’s lived at Int Base since 1982)
EXHIBIT D: Declaration of Catherin Bernardini (formerly Catherine Rinder)
EXHIBIT E: Declaration of Dave Petit
EXHIBIT: Response by CSRT, with historic documents of the trust.
EXHIBIT F: Declaration of Carol Bragin
ADDITIONAL EXHIBIT: More data on CSRT, etc.
EXHIBIT H: Declaration of Linda Hamel
EXHIBIT I: Declaration of Mislav Raos (Note the admission that documents for IASA were “mistakenly” filed in Clearwater, Florida.)
IAS Corporate Documents, Part 1
IAS Corporate Docments, Part 2
EXHIBIT J: Declaration of Carol Warren
EXHIBIT K: Creation of IAS Trust
EXHIBIT M: Declaration of Luis Garcia
EXHIBIT N: Supplemental Declaration of Glen Stilo
EXHIBIT O: Declaration of Charlaine Roger
EXHIBIT P: CSRT Receipts
EXHIBIT Q: CSRT Receipts 2
EXHIBIT R: USIMT Receipts
EXHIBIT S: USIMT Receipts 2
EXHIBIT T: USIMT Receipts 3
http://www.scribd.com/doc/215162804/Garcia-v-Scientology-Scientology-Supports-Motion-to-Dismiss
 
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JBWriter

Happy Sapien
So, nerd that I am, I start reading the newly filed documents and,
in Exhibit A I get to page 6 of 7 and see the notary's name is:

Kenneth D. Long.

That rings a bell...maybe? :confused2:

A simple Google search shows Kenneth D. Long, a "scientology executive" filed an affidavit in the CSI vs. Fishman/Geertz matter in 1993.

Here's the FullWiki link: http://www.thefullwiki.org/Church_of_Scientology_International_v._Fishman_and_Geertz

Excerpt (internal links disabled by me):

Critics of the church have accused it of intentionally using lawsuits in these and other cases as SLAPP suits, intended to silence their opposition. Critics of Steven Fishman have produced the affidavit of Kenneth D. Long, a Scientology executive, which states that Fishman received services from a Scientology mission, did a few introductory courses, never worked for the Church or CCHR and did not get any auditing or do any courses at the main Miami church, which would conflict with his claims.

Is the Los Angeles notary Kenneth D. Long the same person that filed an affidavit in a federal lawsuit as a "scientology executive"? :confused2:

If so, does anyone have a link to that 1993-ish affidavit?

It's not an uncommon name, I suppose, but this is scientology, so...

JB

ETA: Okay, Ken Long is well-known here at ESMB already. As of 2012, works as a "director of legal affairs". ESMB post here: http://www.forum.exscn.net/showthre...rg-via-Karen-1&p=738789&viewfull=1#post738789
 
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TG1

Angelic Poster
TX Lawyer and his posts are awesome.

Most of us are not lawyers, but that doesn't stop us from spinning our b.s. because these lawsuits are so interesting and important to the cult's future survival.

That's why I appreciate it so much when real lawyers explain the real deal to the rest of us.

From over here in ESMB Land, THANK YOU TX LAWYER!

TG1
 

dchoiceisalwaysrs

Gold Meritorious Patron
Re: Scientology answers the Garcias — And turns over a trove of internal documents

Incorporated in the Netherlands Antilles:


original.jpg




HT - comment by media_lush on Tony's blog: http://tonyortega.org/2014/03/29/sc...ove-of-internal-documents/#comment-1309477026

I notice # 7 is not filled in and wonder where the incorporation Articles and bylaws are? Were they attached? How does this coordinate with the 1993 IRS agreement? Why was item Not filled in? Was the IRS blackmail not yet complete and to follow later that year? And how does this fit with the original 1984 IAS formation?


Can't help but think about the 1982 Corporate sort out that was done regarding the Church of Scientology of California which in my opinion was done to escape possible liability while the 1980 case filed by plaintiff Larry Wollersheim was in progress http://www.xenu.net/archive/events/wollersheim/
 

Bea Kiddo

Crusader
One of the listed trustees is Dave Petit, who is the CO of CCInt. I am trying to wrap my wits around that. Why the check would he be listed as a trustee?

Last I knew he and both of his kids were in the Sea Org. His wife is not qualled for the Sea Org but she was given special permission to train to Class VIII and become an auditor at CCInt. Years later I saw she was a C/S at LA Org.

Something about it does not add up. Unless he is just one of the last remaining trusted who has not made it to the Hole yet.
 
What I don't understand is the point that the Cult's lawyers are making seems valid - that CSRT (the trust that owns the super power building ) etc. shouldn't be dropped. I can see that they prove diversity (if I understand correctly, it means Garcia can't sue multiple Scio corporations that are in different states, that are part of the fraud in Federal court, that they must be sued individually in the appropriate state.) they win by default. However, if it goes to trial and if they are lumped together, they become liable for any judgment.

Is that a simple defense against piercing the corp veil? It seems to be an interesting method to scuttle the suit. What I don't get is this: The actual reality is that all these corps are part and parcel of the Scientology umbrella. The legal reality is they are separate corps. and should be treated and sued separately - despite they shuttle personal, money etc back and forth between the corps. and are all run by one man.

Wouldn't you want to go after the lot instead of one, Flag, which though it houses the reg offices of the Super power project, IAS etc. has nothing to do with them? All the times I was at Flag I was under the idea they were separate organizations, and staffed separately, despite being part of the overall Scio umbrella.

To me this seems to be a large mis-step on Babbitt's part.

Mimsey
 

secretiveoldfag

Silver Meritorious Patron
From Tony's blog (a quote of a quote):

Upon completion of recent discovery, however, Plaintiffs believe FLAG to be the defendant that has spearheaded all activities relating to the other entities which have given rise to this suit to wit, and rendering Defendants USIMT, CSRT, and IASA dispensible parties.

http://tonyortega.org/2014/03/28/ted...gy/#more-14063

I added another point but it seems to have vanished. It was just to say that if the Garcias sue Flag they don't need to sue the other entities since (a) they are controlled by Flag and (b) Flag is in Florida and the others are in California.

It seems to be getting easier and easier (if not cheaper or quicker) for plaintiffs to get CoS driven into a corner. Perhaps their attorneys are beginning to believe in their cases.

Best luck to the Garcias this time round.
 
Today, the Tony Ortega story on the Garcia case - Scientology's motion that Garcia's amended motion is bs... because you can't separate Flag from the other entities? Because the trusts.. they are definitely involved according to Garcia's own statements (and aren't they the ones with the deep pockets?

IS SCIENTOLOGY SAYING THEY ARE ALL ONE THING? I'm confused. Wouldn't that be contrary to their interest in keeping them all illusorily separate?

Or is SCIENTOLOGY saying, go sue us in California and leave Flag out of it?
 

Rene Descartes

Gold Meritorious Patron
Tell me if I have this right.

The Garcias are standing in front of a table. There are shells on the table.

One shell is labeled CST

Another shell is labeled RTC

Another shell is labeled FSO

etc

etc

The table itself is labeled COS

Now the Garcias can sue shells for their money back but the question is which shell or shells is the money under.

They have to be careful because maybe they will successfully sue a shell but that shell might not have the money under it.

Hell maybe they can sue all the shells and win but the money is not under any of the shells.

Maybe the money is hidden in a crevice somewhere, a deep dark crevice that reeks a vile stench.

Godspeed to the Garcias

Rd00
 
IANAL,

I prolly have this all bolluxed up, but I think the Garcia's picked which shells to sue, based on a combination of
who they interacted with (where the trail leads of evidence)
where they interacted, where the fraud occurred-part of doing business, and the super power building is (Florida, which was where Flag is),
where the actors "do business" (where trust is registered.. but then cherch claims it got registered by mistake in the wrong place once, but really belongs in California)

cherch says, where trusts do business is some how separate from the above Florida activity and registration trail, due to the majority of trust employees being physically in California, and most business being done in California even though the Garcia's actual fundraising was done in Florida with the Garcias, but that doesn't matter to subject matter jurisdiction anyway, since for 'trusts' instead should be residences of "trustees" in California, nondiverse like Garcias, so therefore,

to sue the trusts, no diversity, doesn't belong in federal court, and needs to go to California. this could make it sound like cherch wants to spare Flag, separate Flag from the trusts, make two separate cases. But I think Garcias are saying Flag was intimately involved. I don't hear cherch saying Flag was not involved. I hear cherch not denying trusts were involved. so that's my confusion. it sounds like cherch is admitting they are all in it together...
 
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