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Crime & Law
Narconon patients allege credit card fraud
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Narconon patients allege credit card fraud

Narconon patients allege credit card fraud
Photo Credit: Pete Combs
Terri and Mike Dacy tend to the grave of their son, Jonathan, in Dallas, Ga.

Narconon patients allege credit card fraud

Embroiled in state licensure revocation proceedings, civil lawsuits and criminal investigations, the Scientology-affiliated drug and alcohol rehabilitation organization known as Narconon faces new allegations of credit card fraud.

Four families – three from Georgia and another from Oklahoma – allege Narconon employees illegally obtained credit cards in their names without their knowledge, then charged those cards to the maximum credit limit as payment for treating their addicted children. In three of the cases, family members said the treatment was incomplete.

Each family said it was lured into trusting Narconon with the personal information needed to secure the credit cards by assurances from employees that the information would be used to apply for insurance coverage or financial aid in the form of grants or no-interest “medical” loans. Some families said they were on a “pay-as-you-go” plan for their children’s treatment, but found that they had been billed in full for treatment within less than 30-days of receiving the credit cards. Two of the four families told WSB their children were kicked out of the program as soon as the credit cards were “maxed out.”

The stories told by these four families and their lawyers are remarkably similar.

A “FALSE” SENSE OF SECURITY

Jonathan Dacy, 28, was at the end of his rope. Kicked out of his father’s house because of his continued overuse of medication for pain, depression and anxiety, Jonathan was arrested in November, 2009, for shoplifting. As he sat in jail on misdemeanor charges, the family tried to delay his release while frantically searching for a drug treatment facility that would take him.

They thought they found what they were looking for in Narconon of Georgia.

“They told us everything we wanted to hear,” said Jonathan’s mother, Terri. “They said they were 80-percent successful in treating drug addiction.”

But Terri Dacy and her former husband, Mike, had no way to pay for the treatment they said their son so desperately needed. Jonathan had no insurance.

“Don’t worry,” they were told by an employee of Narconon of Georgia. “Get Jonathan in here right away and we’ll worry about the financing later.”

 So just before Christmas, 2009, the Dacys enrolled Jonathan in Narconon.

“(A Narconon employee) said they’d work with us on financing,” said Terri. They promised the family a $10,000 grant and financial aid in the form of interest-free loans, she said.

“But they called back later, after Jonathan was enrolled and said our financing was not approved.”

So the Dacys turned to Terri’s brother, Scott Maxey, who lived in Chicago. Maxey agreed to cosign a loan for the Dacys to pay for Jonathan’s rehab. Narconon agreed to bill Mike and to keep the payments under $300/month, said Terri. Narconon, she continued, also agreed that Scott would only be involved as a guarantor of the loan.

“All of a sudden, my brother started getting weird things in the mail,” Terri said. Maxey received a denial letter from Discover, saying he would not receive a new credit card because he already had a Discover account.

“He never applied for one,” Terri said. “At first, he thought he was the victim of identity theft.”

A day later, Terri said, her brother’s alarm increased dramatically when he found two new credit cards in the mail.

“That’s when he got a call from (Narconon). They said, rather than doing a loan, this would be easier. That’s why we got credit cards,” she continued.

Repeatedly assured by Narconon that the credit cards were approved by Mike Dacy, Maxey reluctantly agreed to authorize Narconon to charge them to the credit limits. In all, the charges amounted to $10,300.00. But Mike said he never talked with anyone at Narconon about credit cards. He was infuriated.

“I don’t lose my temper,” Mike said. But after learning about the credit cards and about what he insisted were false representations from Narconon about his endorsement of the plan, “I called them up and yelled at them. ‘What the hell is this?’”

 


 

Tari Anderson said she and her husband had no place to turn in trying to get their 24-year old son, Aaron, into a treatment program. Aaron had developed pneumonia. In November, 2011, he was hospitalized. Then, his parents found evidence that he had been shooting heroin. Aaron admitted he was addicted. Scrambling to find an inpatient rehab program, Tari said she stumbled upon Narconon while doing research on the internet. A Narconon employee urged her to get her son into the program “that night,” Tari said. She gave Aaron an ultimatum and he agreed to go.

“We were told we needed to pay $5,000 in cash and they would finance the balance for us,” she recalled. “The forms were filled out. They asked for our social security numbers, dates of birth, home address and our full names. I thought it was for medical financing. I wasn’t thinking credit cards. They never said that.”

A week later, Tari said, as her son was undergoing treatment, a Narconon employee called and asked if we had received any credit cards. The drug rehab facility had ordered a Discover Card and a Capitol One charge card in the Andersons’ names without notifying them. The cards had already been maxed out for a total of $11,000, she said.

“I was really, really surprised,” Tari exclaimed. “I asked if there were any other cards out there. They said they had applied for several and didn’t know which ones had been approved.”

The Andersons were furious, she said. “We were ripped off, very much deceived. I think it’s a criminal enterprise.”

 


 

Ben Burgess is an Athens-Clarke County firefighter. He and his wife, Rhonda, were desperate to help their son, Blaze, stop abusing the powerful painkiller Oxycodone.

“They got our name, address, phone number and social security numbers for insurance purposes,” said Rhonda. “But we were told that insurance wouldn’t pay for more than three to five days of inpatient care. So we wondered how to pay for this and were told, ‘Don’t worry, we’ll take care of it for you.’”

Ben Burgess said he was horrified to find that help had come in the form of credit cards.

“My statement is, the cards are from the devil!” Ben said. “I would have never agreed with a stinkin’ credit card!”

The Burgesses said Narconon ordered four unauthorized credit cards in their names, charging more than $19,000.  When they expressed their concerns, however, they said Narconon turned up the pressure.

“When we hesitated, they would say, ‘Don’t you love your child? You know this is the best place for them,’” Ben recalled.

“They got him in there by telling us not to worry about the money. But once he’s in, then they have you in a corner,” said Rhonda.

 


 

Sue Ann Newman was hospitalized, sickened by her addiction. After helping her get medical attention, her sister, Dena Shobe Smith, searched frantically for a rehab program. She found Narconon Arrowhead in Canadian, OK.

In a lawsuit filed in Pittsburgh County, OK, Smith’s attorney said Narconon initially pitched her $30,000 rehab program for Newman. Smith said she couldn’t afford it. She was then pitched a $15,000 alternative program, intimating it could be the only thing standing between Newman and death caused by her addiction. But Smith said she couldn’t afford that either, according to the suit. So Narconon promised to secure an interest-free loan that would be combined with a work program. Newman entered treatment at Narconon Arrowhead in May, 2012.

But two months later, Smith was told by Narconon that Newman had never been approved for the interest-free loan or the work program. Without Smith’s knowledge, workers at the Oklahoma facility ordered a Discover Card and a Visa card in her name and used them to charge $14,700 for Newman’s treatment, according to the complaint.

“The alleged Program has the appearance of being nothing more than a pyramid scheme and sham of the Defendants, to extort money from the Plaintiffs through fraud and other means, based upon fraudulent and willful conduct, inducements and as a recruiting tool for Church of Scientology,” the suit claimed.

Newman and Smith are asking for damages in excess of $75,000.

“I have challenges calling (these) business practices,” said Tulsa attorney Gary Richardson, who filed the lawsuit on behalf of Newman and Smith. “I can’t imagine what they’ve done in this instance would fall under ‘business practices.’ We allege fraud.”

 

NO REFUNDS

Of the four patients (Narconon calls them “students”) whose families said treatment was paid for with illegally obtained credit cards, only Aaron Anderson completed the program. Newman’s mother “rescued” her from Narconon Arrowhead, according to the civil complaint filed in Oklahoma. Treatment for Blaze Burgess and Jonathan Dacy was terminated after they were accused of breaking the rules or simply not fitting the program – even though the treatment had already been paid for in full.

Ben Burgess said his son, Blaze, warned him ahead of time.

“He said they do that to everyone they get credit cards for. They max them out and know in a month or two or three they’ll be kicking the kid out and putting someone else (in his place),” Ben recounted. Blaze was ordered to leave Narconon of Georgia after an infraction that the family insisted had been fabricated after they fell a month behind in housing payments. He was told he could return, but would have to pay $4,500 up front. Already financially ailing and increasingly dubious of the program, the Burgesses declined.

Faced with more than $19,000 billed to credit cards they never asked for and never approved, the Burgesses had no idea how they would pay for it all. They decided to sell their home, but at closing, discovered they owed much more than the sales price. Instead of receiving money to pay off the Narconon credit card debts, Ben actually paid $10,000 to close the sale of his house. The family now lives in a single-wide mobile home.

“They pretty much ruined our lives,” Rhonda said.

Jonathan Dacy’s parents said he had a similar experience. He never underwent treatment at Narconon of Georgia – he remained in a doctor-supervised detoxification program required prior to treatment for the entire five weeks he was enrolled in the program. At the end of five weeks, after being falsely accused of failing a drug test, Jonathan was told that his detox was taking too long and that his problems were more than Narconon could handle. He was ordered to leave with just a few hours’ notice, his parents said. Their requests for a refund and an itemized bill of services went unanswered, Mike said.

“Eventually, they just stopped returning our calls,” said Terri.

The Dacys consulted a friend who was an attorney and wrote several letters to Narconon demanding a refund. They disputed the credit card charges, eventually getting Capitol One to agree to dismiss all fees charged on their credit card by Narconon. But they were not successful in obtaining such an agreement from Citi Financial, which issued the other credit card.

Jonathan went home to live with his father. In April, 2010, he married and was living in Rome. But two weeks after his wedding, Jonathan disappeared. His body was found May 4, 2010, in a ravine not far from his Floyd County home.

His parents are still struggling to pay off the Citi Financial card.

 

BUSINESS AS USUAL

“Sales people are trained how to bring people into the program and are told to focus on money,” said former Narconon Arrowhead President Lucas Catton. “They look for insurance, second mortgages and credit cards. They look for services that allow you to apply for credit cards on the phone or online. They have to find the money. Money is the driving force, without a doubt.”

Catton described the quest for financial gain as the primary purpose of Narconon – far outranking the treatment of addiction. Much of the financial issues are handled by former Narconon patients, who graduated the program to become counselors and office staff, he said.

“When you have people who’ve recently come from the program, they already have questionable morals and ethics. A few months ago, they were active addicts. Then they’re given the responsibility to get it all paid. It’s intense pressure…. Hurting someone’s financial status in the process is not a concern,” Catton said.

He said Narconon has obtained credit cards in the names of hundreds of people, many of whom did not know that was how treatment would be financed. The practice was ongoing at a number of Narconon treatment centers around the world and involved “multiple” people, he said.

The alleged practice has garnered the attention of Gwinnett County District Attorney Danny Porter. When his agents, along with those from Insurance Commissioner Ralph Hudgens, raided Narconon of Georgia April 26, they were looking for evidence of both insurance fraud and identity theft.

“The search warrants were primarily based on the Insurance Commission’s fraud case. But as a spin-off, we seized patient billing records to include ID theft and credit card fraud,” Porter said. “We’re working on five complaints now.”

But Porter said the case was complex because in at least one case, it appeared the unwanted credit cards were eventually authorized by the victims.

“It seems to me there would be some regulation on disclosing how (Narconon) obtains money,” Porter said.

Investigators seized dozens of computers and an entire truck load of documents. While Porter said there is a lot of material to sift, “We are in the analysis phase now.”

 

NARCONON STATEMENT

Asked for a statement, Narconon International President Clark Carr refused to answer specific allegations, citing privacy concerns. But in a statement to WSB, he said:

(I)t would, of course, be contrary to Narconon's policy to engage in the conduct you are alleging and I am unaware of it ever happening. Narconon International and all Narconons are bound by strict state and federal privacy laws. Therefore, we cannot discuss any details about any individuals or their loved ones that claim to have been involved with our program without their written authorization.”

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