http://washparkprophet.blogspot.com/2006/07/maines-ag-sues-cult.html

16 July 2006
MAINE'S AG SUES CULT

As previously discussed in this blog, the Maine based religious
organization known as the Gentle Wind Project is an organization
that tries to get people to buy its bogus health products (it calls
the payments donations), and has harassed former members with
frivilous lawsuits. A federal lawsuit was dismissed and a new one
was commenced in Maine's state courts.

Now, the attorney general of Maine has stepped into the fray. A copy
of the attorney general's complaint is available here.

The complaint alleges that the Gentle Wind Project has intentionally
made false claims regarding the health benefits of its remedies,
failed to disclose that testimonials came from people with a
financial interest in the organization, improperly characterized
purchases of health products as charitable donations, failed to keep
proper non-profit organization records, and used charitable funds
for improper purposes on multiple occasions.

As relief the attorney general seeks to have the claims declared
fraudulent, to ban the use of the false claims to sell the remedies,
to collect sales taxes on the sales of the products, to declare that
the leaders of the group of breached their fiduciary duties and bar
them from official roles in any Maine charities, to force the
leaders to disgorge the benefits they have received, to ban the
leaders from operating under the name of the organization, to freeze
the organization's assets, to dissolve the organization as a non-
profit under the supervision of a receiver, to reimburse everyone
who was defrauded, to distribute anything left over for the benefit
of the mentally ill, and to assess hefty civil fines against the
leaders.

In short, the attorney general has done everything short of bringing
criminal charges against this group and its leaders, vindicating the
claims that those who have been sued by the organization have been
making all along. Because the claims involve breaches of fiduciary
duty, the debts could not even be escaped through bankruptcy, which
is probably where most of the leaders of this group are headed in
the near future.

Because no criminal charges were brought, the attorney general will
need to meet a "preponderance of the evidence" standard, rather than
a "beyond a reasonable doubt" standard. The attorney general will
also be able to compel leaders to either testify under oath about
their conduct, or claim the 5th and allow the judge or jury to make
negative inferences from that decision. The decision not to bring
criminal charges also deprived the organization and its leaders from
a right to representation from the public defender if they can't
afford their own attorneys. And, the decision to bring civil charges
allows the attorney general to obtain preliminary and injunctive
relief from a judge, and greatly limits the scope of the issues, if
any, which can go before a jury. Generally speaking, there is no
right to a trial by jury in matters in which relief other than money
damages is sought, and in matters concerning breaches of fiduciary
duties by corporate officers and directors.

Of course, if the leaders of the group choose to testify, rather
than taking the 5th, anything they say can and will be used against
them in later criminal cases, and nothing prevents the attorney
general from bringing criminal charges against the leaders after
this case is concluded, or parallel to it. Since many of the sales
were interstate transactions, federal civil and criminal charges are
also possible once the attorney general has laid out the factual
basis for the state charges.

Almost every state attorney general has general supervisory
authority over charities in that state, but it is very rarely
exercised, and when it is, the suits are frequently brought when
there is overwhelming evidence that a non-profit has spun entirely
out of control, as the Gentle Wind Project has, to the point where
it has become a virtual criminal enterprise (although the AG's suit
does not itself make any civil RICO claims). If this suit is
successful it could serve as a step by step manual on how to shut
down organizations that make intentionally false health claims and
try to use a religious or charitable status to cover their tracks.