Commercial Crime

From: "FACTS"
May 28, 1998
Switzerland: sects

The former Sankt-Galen judge, Hans Kaspar Rhyner, took well-meaning investors for a ride so that he could give money to Scientology.

by Michael Solmicky

The company name sounded impressive: American Federal Banking Association, or, in German, "Bundesverband Amerikanischer Banken (BAB)." It operated out of 48 Stampfenbach street in Zurich. Attorney Hans Kaspar Rhyner, former judge of the Sargan District (Bezierksamt Sargans SG), lent the institution an atmosphere of trustworthiness as the "Executive Director Switzerland."

Today, the bank proves to have been a facade for a million dollar fiasco. With alluring promises of ten percent dividends, Rhyner and his German partner took a whole series of well-intentioned investors for their money. Instead of investing the money, it was was simply deposited in the accounts of those supposedly responsible for the bank. As the swindle came to a head, it was too late.

In his written complaint of December 19, 1997, the Zurich district attorney counted 350 charges of fraud for a total of 22 million franks ($16 million). The artful deception of the fictitious bank consortium shows how the Scientology organization relieves its members of their money and makes them susceptible to illegal business practices. For the first time, sect experts, in connection with Scientology, are warning of a phenomenon which, until now, was limited [in Switzerland] to drug addicts: "commercial crime." "The member's necessity for money is so great," says Odette Jaccard, speaker for the Swiss Information Group on Scientology and Dianetics, "that it can hardly be accumulated fast enough by legal means."

The expensive Scientology membership had finally brought Hans Kaspar Rhyner upon hard times. He needed money, is how Rhyner explained his part in the million dollar debacle to the investigative authorities. The 54 year old attorney put everything he had into Scientology owned and foreign capital.

The higher Rhyner got in the Scientology hierarchy, the worse his economic situation became. "Especially in 1988 and 1989", ascertained the Zurich district attorney's office is his written complaint, "the private and commercial mountain of debt took on dangerous proportions." During this time, Rhyner's career in Scientology took a sharp turn upward. In 1987 he entered the controversial organization; by 1989, he had already reached the state of "clear". That is a level in which the person is supposed to have been relieved of his spiritual ballast. In the next two years, he worked his way up to Operating Thetan 5, called OT5, one of the highest steps in the Scientology hierarchy.

His ascension alone cost Rhyner about a half million franks ($350,000). On top of that came payments for further membership courses and for the International Association of Scientology (IAS), which brought him the title of "Patron Meritorious," a privileged position inside of the organization. Cost: another half a million.

Rhyner's balance fell into the red, which is the same fate as many other high-ranking Scientologists. Confidential documents from former Scientology members prove that in the past few years, three dozen Thetans have had to declare bankruptcy in Switzerland. "A good Scientologist," affirms Scientology opponent Odette Jaccard, distinguishes himself by having been involved with a yard-long list of businesses."

Scientology speaker Jurg Stettler disputes the susceptibility of Scientology members to bankruptcy. "That has nothing to do with a membership in a religion," says Stettler, "Catholics also go broke." The church tax [imposed upon Catholics] would have cost much less than Scientology. That did not keep the already heavily indebted lawyer from financing his Scientology career with foreign capital. In 1989, he received a $345,000 loan from Albert Jacquier, a high-ranking Scientologists from Geneva. Jacquier did not see his money before he died on December 11, 1994. It was not possible for him to initiate a legal process against Rhyner. Scientology forbids its members of have legally opposing relationships with each other.

Instead of this, Scientology entered into business with Rhyner. This happened with Author Services Incorporated (ASI), the administrative executor of the writings of the Scientology founder L. Ron Hubbard. In order to preserve the works of the sect guru "for all eternity" with expensive preservation methods, ASI sells Scientologists paintings which follow a motif from Hubbard's science fiction novels, presumably for under market value. A re-sale is supposed to reap a fat profit.

In the early 90's, Rhyner took over as representative for a portion of Europe, and invested luxuriously in the high-stepping project of the Scientology enterprise. He appeared on the ASI honor roll with a patron's contribution of $500,000. Since then he has played a leading role in commercial areas, according to sect experts. "Rhyner serves as a relay station for financial business," says the German author and Scientology specialist, Peter Reichelt. The business with the pictures turned into a catastrophe. The paintings , for the most part, turned out to be worthless on the art market. Rhyner was left with a bill of goods. In 1991 his debts climbed another 1.5 million franks for a total of 3.5 million franks. This was exactly as much as he had invested in Scientology up to that time.

Even Scientology speaker Jurg Stettler has to admit today that Rhyner lost out in the picture business. "This project", interjects Stettler, "went down the tubes."

"The greater the financial pressure," said Fridolin Triet, the Zurich attorney entrusted with Rhyner's case, "the greater the danger of engaging in business of a dubious nature." This is what has played a role in Rhyner's case, said Triet. Renate Hartwig, the German Scientology sect expert, took it one step further. "The organization empties its members' pockets of their money, thereby making them susceptible to criminal behavior." The OT steps should not be called Operating Thetan, continued Hartwig, but "Operating Perpetrator" ("Operierender Taeter").

The millions he had in debt drove the former judge Rhyner into the illegal investment business. Between 1991 and 1994, he and his German partner, Ullrich Tiggelbeck, under the name of "Bundesverband Amerikanischer Banken BAB", promised "yearly dividends of up to 10 percent in D-Mark (German mark) investments." Today, the Zurich district attorney's office for commercial crime came to the conclusion that neither a bank consortium nor a serious investment opportunity was ever in the making. The offices on Stampfenbach street in Zurich were a facade. The BAB address in the United States is not that of a bank, but of Business Service Center, which contracts for mail and secretarial work. The stocks were just as counterfeit as the entry of BAB in the US American bank register. The bank consortium exists only on paper.

However, both of the self-named directors, Rhyner and Tiggelbeck, did a thriving business. In only three years their paper bank was bursting with 350 investors and 22 million franks. The money had not been accounted for in regular books. The substantial contributions were channeled to an account in Germany. When the fraud was exposed, Tiggelbeck absconded with 13.7 million franks ($9.5 million) and disappeared.

Rhyner was not available for comment. Despite calls for his resignation as an attorney, he has not let himself be shaken. He told the investigation authorities that he had always believed he was conducting a serious bank business, and that he knew nothing of fraud.

Even though he claims to have known nothing, on November 24, 1993, he traveled to New York in order to answer the questions of a large investor about the existence of BAB. For this reason he brought ready-made company signs with him and mounted them on 67 Wall Street and in the Empire State Building, so that the postal address of the BAB would appear as if it were the main office. The trick worked. The customer never suspected a thing, and invested his money. This has convinced the Zurich district attorney that Rhyner was guilty of malevolent deception and therefore of commercial fraud. The punishment will be four and a half years in prison. Scientology has not been charged with anything, which is a sin of omission, according to Scientology sect expert, Renate Hartwig. "The organization has driven Rhyner to investment fraud," criticized Hartwig, "yet it does not have to answer up for its actions."

German Scientology News