Scientology scam: ‘It hadn’t occurred to me I was getting appalling advice from Church execs’

This week in our series of excerpts from books about Scientology, we have an excerpt from the newest addition to the pile, Chris Shugart’s Fractured Journey: A Personal Account of 30 Outrageous Years in the Church of Scientology. We specifically asked for this portion of the book, which practically drove us nuts when we read it. Couldn’t Chris see the disaster he was walking into? Ah, Scientologists. From the books chapter ten, “Rising Costs,” here’s Chris’s setup for what became a world of hurt.

 
With the beginning of 1982, came a series of events that turned my life in a completely different direction. And I never saw it coming. It actually all started in 1978, when my dad, Al Shugart, founded Seagate Technology. He was already a prominent figure in the Silicon Valley computer industry, but this new venture would soon become his best known accomplishment.

In 1980 my dad gave me a few thousand shares of Seagate stock as a Christmas present. It wasn’t worth anything then because the stock hadn’t gone public. My dad suggested I hang on to it because he said, in a casual way, “one of these days it might be worth a million dollars.” I laughed and said, “Hey, you never know.”

Although Seagate was flourishing by 1981, I never thought much about the shares I owned. I really wasn’t interested in the stock market, and I had no idea if I was making any money or not. It was something I had no influence over, so I didn’t pay much attention to it. However there were those who, if they knew, would have been keenly interested.

My wife casually mentioned our Seagate stock to someone at the American Saint Hill Organization, and it must have created an instant buzz throughout the Scientology network. I had no idea how much my stock was worth but I sure found out in a hurry. I got a call from Darcy, an ASHO registrar who told me that my stock was probably worth a few hundred thousand dollars. Someone must have been doing their homework.

Darcy had one goal in mind. He wanted me to sell all of my Seagate stock and give all the money to the Church. On the face of it, that sounded like an absurd idea. Still, I was willing to let Church executives make their case, as I understood where they were coming from. I’d been a Church staff member, and even though I was now a public Scientologist, I was still part of the Scientology movement. Had it been me, I could have very well been just as eager as Darcy was.

I recall one encounter with Darcy, when he brought along a registrar from L.A. Org named Greg. They paid me a personal visit to my apartment to try and convince me that selling all of my Seagate stock would actually be a good financial move in the long run. They reasoned that prices for Church services were still going up by five percent every month. If I were to wait, I’d only be paying more later. They also tried to stress that paying for Church services was always a superior investment strategy under any circumstances. The gains to be had through Scientology auditing and training were of incalculable benefit. For an indoctrinated Scientologist such as myself, the spiritual gains were virtually infinite in magnitude.

Darcy and Greg’s last argument was the trump card that every registrar eventually plays. Because Scientology improves ability, it stands to reason that a Scientologist would enhance their skills and aptitude to such an enormous degree that they could easily generate more income, affluence and success. Like most Scientologists, I believed this was true.

My financial situation had no doubt spread like wildfire throughout a few of the Church organizations. One night, I got a visit from an exec who was with Scientology Missions International. He wanted me to buy a Mission franchise for twenty-thousand dollars. Besides the usual patter about the vital importance of expanding Scientology, the SMI exec presented me with another argument. He went into an elaborate story about how high-level Church management had been doing an evaluation of the world economy. They were predicting an eventual economic collapse that would devastate the world’s financial institutions. The exec said that it was only a matter of time that money would no longer be worth anything.

Taking this scenario further, the SMI exec said that the only effective hedge against an economic collapse was to invest in Scientology. Scientology had an immense value that existed independent of prevailing economic conditions. A Scientologist was valuable in a way that was superior to any monetary system. Because we were the only hope that mankind had, in the event of a global catastrophe, the world would be coming to us for answers. A thoroughly trained and processed Scientologist was the only person who could prevail in a world crisis. As a Mission Holder, people would be beating a path to my door!

At the time, it hadn’t occurred to me that I was getting appallingly bad advice from Church executives who knew very little about finance or the world economy. I naively assumed that I was dealing with responsible people who were top-notch executives who had just as much reliable information as the most knowledgeable New York stockbrokers.

There should be a Scientology axiom that states, “The amount of money at stake is directly proportional to the tenacity of the Church to get that money.” In my case we were dealing with what could potentially be a couple hundred thousand dollars. The Church wasn’t going to give up on getting their hands on that kind of cash. But I wasn’t convinced and I told Darcy that I didn’t want to sell my stock.

One day I got a call from Michael, a registrar from the Advanced Organization. He wanted to take his shot at getting my money. He positioned himself as the “good cop” in this back-and-forth struggle for my assets. He said over the phone, “Those regs are assholes. They don’t know what they’re doing. Why don’t you come in, and we’ll work out something you can agree with. The other orgs have turned this into a problem, and it doesn’t have to be.”

Finally, I thought, someone who was willing to see my point of view. I went to AOLA to have a meeting with Michael. He was a familiar figure around the Complex. He had a funny, likable personality and a reputation for being very good at his job. He was also known for performing mind-boggling card tricks.

At the time, I failed to see any irony in a Church registrar performing razzle-dazzle sleight-of-hand card tricks while trying to convince me to give thousands of dollars to the Church. He was an OT you see, and everyone attributed his magical skills to his high-level spiritual abilities. I was convinced too. He told me to think of a card, and he pulled that card right out of the deck. It really seemed like something way beyond a cheap flim-flam trick. I thought he was psychic.

After the entertainment, we had a long conversation. Michael asked me what I wanted out of Scientology. I discussed my goals, aspirations, and so forth, and talked a little about my experiences with Scientology. But I still had reservations about selling my stock.

Michael suggested a compromise. He said that there was no reason to sell all of my stock. I could just sell a portion of it—enough to buy plenty of services for Susie and me. He said, “It’s your money for God’s sakes, you should be able to do what you want with it.”

I thought it was a good solution. I really did want to go Clear and achieve OT, and I knew it was going to cost me lots of money one way or another. This seemed like a good plan. But I had to ask, “How much money are we talking about here?” Michael said he’d get with Darcy and they’d put together a service package and present the whole deal to me. Two days later, Darcy and Greg showed up at my apartment with a stack of invoices representing all of the stuff that I was going to buy. Because it was going to be such a huge donation, they were somehow able to apply substantial discounts on everything. The package included auditing all the way through OT VII (which hadn’t yet been released), and training all the way through Class 8, and a number of auxiliary courses. The total came to just over $100,000. Believe it or not, that was cheap compared to what I would have paid at full price. It seemed like I was buying every service the Church of Scientology had.

Initiating a hundred-thousand-dollar transaction isn’t like writing a check for cash at the supermarket. Though it’s much more elaborate, the complexity didn’t faze any of the execs involved. They tackled the procedure with a frantic obsession.

While the amount of money alone might have been more than ample motivation, there was another factor in play: production statistics. Not only did the Church want my money, they wanted it by 2:00 PM on Thursday. Every Scientologist is familiar with the manic frenzy that accompanies the hours prior to that deadline.

Because of my staff experience, I was familiar with this monomania, even a willing participant. I actually agreed to take out a short term loan to give the various Church orgs the chance to get their money before the 2:00 PM deadline. I did this in spite of the fact that the extra transaction was going to cost me additional money in interest charges. I was caught up in a fanatical moment that lacked a common sense perspective. It only occurred to me afterwards that all of the Church regs still would have gotten a big boost in stats anyway, although not until the following week.

Needless to say, my dad thought I was crazy for selling my Seagate stock. There was probably nothing I could say that would be a sufficient explanation, but I tried anyway. I told him that prices were going up steadily every month and therefore I was coming out ahead in the long run. Then I said that the Church was giving me huge discounts. The way I saw it, in one single purchase, I was buying all of the auditing and training that Susie and I could ever possibly do. It was a once-in-a-lifetime opportunity. My dad thought I was being scammed.

My mom and step-dad tried to counsel me towards a more prudent decision. My sister sent me a letter expressing concern that my financial folly was going to create an irreparable rift between my dad and myself. Considering the circumstances, my family showed incredible restraint, especially my dad. He didn’t press the issue any further, though I think he did come close to disowning me.

Everybody got their money—over one hundred thousand dollars in all. The Los Angeles Organization, The American Saint Hill Organization and the Advanced Organization of Los Angeles each got their piece of the pie. Even Scientology Missions International got their twenty grand. Since I’d agreed to purchase the Mission franchise that had been offered to me, I was going to be the Scientology Mission Holder for the newly established Marina Del Rey franchise. May as well go all the way. I’d become thoroughly immersed in the purpose of expanding the Church.

In all of the excitement, I somehow ended up selling all of my stock, even though that wasn’t the original plan. I’m not sure how it happened. Everything was moving so fast that I didn’t stop to take a good look at what was going on. I do recall the broker handling the sale saying something to the effect that the best offer we got included the stipulation that the purchase had to be for all of my shares. I have no idea if that was really the case, nor had I any idea if such a condition was at all commonplace. Darcy had hooked me up with a stockbroker and financial manager who were both Scientologists. I figured they knew what they were doing so I was just following their instructions. Before I knew it, all of my stock was sold. I thought, what happened?

After the Church got all of their money, I still had close to a hundred thousand dollars left over. In the aftermath of the financial carnage, that was of some consolation. At least I’d have the opportunity to reinvest. I began looking at my new options as a financial entrepreneur, although I had no idea what I was doing.

It’s one thing to be a Scientologist with money. It’s an entirely different situation to be a Scientologist with money and have other Scientologists know about it. You may as well be walking around with a neon bull’s-eye on your back.

It didn’t take long for a couple of young Scientologists to contact me with an investment proposal. They had what seemed like a sensible plan. They were account execs for a reputable investment company and they suggested that I put a portion of the remainder of my money in a low-risk high-yield account of some sort. It seemed like a good idea to me. It was definitely better than letting it sit in a checking account, and the money would be available should I choose to reinvest down the road.

The paperwork was simple and it got close to being a done deal. But I backed out at the last minute following a phone call from Darcy. There was still money to be had, and he had an idea. Darcy proposed that I loan out the rest of my money to Scientologists to pay for their services. He convinced me that loaning money to Scientologists was virtually risk free. They were trustworthy, and even if they weren’t, I had the Church’s Ethics system to back me up. What Scientologist would consider defaulting on a loan from a fellow Scientologist when it would mean jeopardizing their spiritual progress? They wouldn’t dare, I thought.

On paper, the deal looked pretty good. I’d loan the rest of the money to a handful of Scientologists who would make monthly payments with interest. I could cash in the interest, and hold the principal for future loans. Darcy told me that he had researched this and the whole thing was perfectly legal. I told him to go ahead and set it up.

The paperwork was rinky-dink and amateurish. No lawyer or notary, and nothing but handwritten contracts thrown together off the cuff. But we were Scientologists. Our word was our bond. Besides, we considered ourselves the most ethical people on the planet. A signature on a piece of paper was a mere formality between honorable people. It all seemed so easy. In an instant, I’d become a financial investor even though I had no idea what I was doing. When I started getting checks in the mail each month, it seemed like I had a good thing going. And I felt secure in the knowledge that I had the Church of Scientology solidly behind me, keeping it all in place.

 
— Chris Shugart

 
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Posted by Tony Ortega on June 30, 2018 at 07:00

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