Security Update – 26 May 2009

A trial began on 25 May in Paris in which the French headquarters of the Church of Scientology (the ‘Celebrity Centre’) and the church’s bookshop are being sued for fraud. Leading French members of the church are also facing charges of illegally distributing pharmaceuticals, after complaints from new adherents that they were made to pay thousands of euros for books, courses, ‘purification packages’ and electronic measurement to gauge spiritual progress.

The case against the church is based on complaints filed by two women in 1998 and 1999. Jean-Christophe Hullin, the investigating magistrate bringing the case against the church, claims that the organisation employs a deliberately manipulative system that exploits vulnerable people for money by placing them in a ‘state of subjection’.

If found guilty, the individuals charged could face up to 10 years in prison and the church could face a fine of 5 million euros (AU $8.95 million). Although the church is registered as a religion in the United States it does not have similar legal protection in France. A report by the French parliament in 2006 described the Church of Scientology as a dangerous sect and as such, the courts have the power to bar the organisation from functioning in France.

There has been a history of French courts pursuing the Church of Scientology. The church’s founder, L Ron Hubbard, was found guilty in absentia for fraud in 1978 and sentenced to four years in prison. In 2002, the Paris branch of the church was fined for a violation of data protection but was acquitted of attempted fraud.

International Operations Group – Analysis

The current global financial crisis is causing increasing levels of fraud to be discovered as organisations look more closely at their operations. Many high profile fraud cases have recently been brought by state judicial systems against individuals and businesses. The number of potential fraudsters is set to rise due to heightened workplace and financial pressures and, therefore organisations should ensure that they have secure and robust internal controls and risk management systems in place.

Businesses and government departments are advised to expand their teams working on fraud prevention and detection to prevent excess losses and be in a strong position for the economic recovery. Steps in the establishment of a comprehensive anti-fraud program include reviewing current internal security procedures, conducting risk assessments, implementing fraud monitoring, detection and control procedures, and promoting an anti-fraud stance. Once a fraud system has been installed, it is vital that it is regularly reviewed and maintained to ensure that it remains effective.

International Operations Group - Services

International Operations Group provides intelligence and security support for corporate and individual clients across the globe. Our team includes experienced specialists in fraud detection, fraud recovery and fraud risk management. Please email intel@interopsgroup.com for further information.

For more information on our fee-based intelligence updates or bespoke reporting, please email Rob Stevenson - rob@interopsgroup.com. Rob can also be telephoned on +61 [0] 420 244 909.