"This Case Involves a Religious Psychic Trying to Break a Family Curse by 'Cleaning' 'Dirty' Money"

From Magistrate Judge Edwin Torres's Report and Recommendation in U.S. v. Stevens (S.D. Fla.) recommending denial of defendant's motion to dismiss, just adopted yesterday by Judge Darrin Gayles:

This case involves a religious psychic trying to break a family curse by "cleaning" "dirty" money. Far-fetched as that might be, the Government has chosen to make a federal case out of it. And not just any federal case; a criminal wire fraud and money laundering case against the self-professed psychic, Defendant Stevens. Defendant squarely takes aim at the government's indictment, however, as an assault on a wide range of religious evangelism for profit in America, despite the fact that such profit-making enterprises are now ubiquitous. Defendant fancies herself as a religious prophet and follower who believes in her psychic abilities and carried through on her promises. Defendant thus challenges the legal validity of the indictment and argues that it represents selective prosecution on the government's part in favor of one type of religious activism while trying to criminalize her own unique beliefs.

It is undoubtedly true that millions of religious faithful, in reliance on messages communicated by wire and mail through channels of interstate commerce, contribute millions (if not billions) of dollars to religious institutions and enterprises (non-profit entities that do not pay taxes on those millions) on the belief that, directly or indirectly, their efforts will prove to be fruitful and worthwhile. After all, if one believes in God, one may also believe that religious prophets are worth investing in as symbols or agents of one's God who do God's work here on earth.

A humanist or atheist, however, would see things very differently. They would say that anyone who buys that religious message with monetary strings attached is foolish or gullible or naïve. They would say that one who contributes money to a religious prophet, in the hope that God will be more merciful towards them or bestow upon them some favor or benefit, has been defrauded.

Ordinarily, especially in our country where the First Amendment is sacrosanct in its protection for those who exercise or believe in religion, the government is not supposed to come down on one side or the other of this fundamental debate. So what makes this case different? Has the government arguably come down on the side of a non-believer by seeking to criminalize a non-traditional religious-based practice even though religious profiteering by established religions are purportedly carried out every day?

The government persuasively argues that, unlike religious-based pleas for money or tithes from religious believers as a whole, this is a case about fraud directed at a specific individual target with intent to harm that victim. So unlike a universal appeal for religious faithful to contribute to the cause, this case is about a direct fraudulent conspiracy for pecuniary gain under the guise of religious practice.

We review the facts supporting the indictment in that light that is most favorable to the government. The grand jury alleges (and we thus assume to be true) that Stevens is a self-proclaimed psychic and spiritual healer. Specifically, the superseding indictment alleges that Stevens "represented herself as a psychic and spiritual healer able to remove curses to assist clients with personal difficulties."

We know from the government's response that the victim in the fraudulent scheme, Ilena Torruella, first met Stevens at her psychic booth over 15 years ago. The two began to socialize and would meet occasionally at various Catholic churches in the Miami area. Torruella shared her family problems with Stevens during these encounters. Stevens explained to Torruella that she was cursed due to her possession of "dirty" family money. Stevens offered to break the curse by "cleansing" the money and showing God that Torruella was not attached to it. The grand jury alleges that by doing so Stevens was falsely representing herself as a psychic with such powers and that "if [Torruella] failed to provide the money bad things would continue to happen to her and her family. Through these representations, Stevens falsely and fraudulently induced [Torruella] to provide her with millions of dollars to purportedly cleanse the money and remove the curse."

In reliance on these false pretenses, Torruella then gave Stevens over $2 million dollars over several transactions during the course of three years, all in exchange for Stevens cleansing the money and having the curse removed. The first payment occurred on September 19, 2013, when Torruella gave Stevens $1,600,000 in the form of eight $200,000 cashier's checks. Months later, Stevens told Torruella that the ritual was unsuccessful, and Torruella would need to give her additional money to break the curse by performing a second ritual.

Torruella then gave Stevens additional money to clean in the form of (1) four $200,000 cashier checks on October 6, 2014, (2) four $50,000 personal checks on December 31, 2014, (3) a $160,000 wire transfer on April 30, 2015, and (4) a $420,000 wire on January 21, 2016. After the January 2016 wire, Stevens stopped communicating with Torruella, despite reaping $3,198,000 from the fraudulent scheme. Rather than returning the "cleansed" money, Stevens, along with her ex-husband, Michael Guzman, kept Torruella's money and used much of it to fund trips to Las Vegas to gamble, to purchase a Coconut Grove condo, and to buy expensive vehicles.

Notably, the superseding indictment does not allege that Stevens made a direct promise to the victim that the "cleansed" money would ultimately be returned to the victim. But the government argues that the indictment reflects probable cause that Stevens knew the victim impliedly understood that the money would be cleansed and returned based on the nature of the transaction coupled with Stevens's understanding that the money was needed for financial support for the victim's mother. The grand jury also found that there was probable cause Stevens never intended to return the money given that she quickly spent the monies for her personal use before the victim could ever ask for it back. And when the victim tried to do so, Stevens ceased all further communication with her. This is fraud because the perpetrator intended to defraud the victim of her property with the specific intent never to return the cash the victim assumed she would get back….

The report and recommendation concludes that the indictment sufficiently alleges a scheme to defraud, doesn't violate RFRA or the Free Exercise Clause, and shouldn't be dismissed on the grounds of selective prosecution. Some excerpts:

RFRA is not a "get out of jail free card." Indeed, "no Supreme Court case supports the destruction of government, or another's, property on free exercise grounds." Here, Stevens has not come close to meeting her burden of showing how RFRA warrants dismissal of the superseding indictment.

Clearly, the government has a compelling interest to deter fraudulent schemes under the guise of religious activity. But we need not examine the particular contours of that interest here where Stevens has not met her initial burden of showing that she is being forced to choose to follow the tenets of her religion or face criminal prosecution. She does not allege that any religious belief or practice of hers requires her to convert other people's money for her benefit on false pretenses, not does she allege that any religious belief is implicated at all.

She instead argues that in general terms her Roma beliefs are burdened by the prosecution of this case based on her inability to practice her spiritual healing practices without government intervention. But that is too attenuated under RFRA because there are plenty of alternatives for Stevens to practice her religion without engaging in a scheme to defraud another observer of her faith. There is no substantial burden where a regulation or statute only prohibits one possible method of engaging in a particular religion, while leaving other available alternatives unaffected….

[As to the Free Exercise, t]he Supreme Court has determined that the enforcement of criminal laws can be constitutionally achieved even if the neutral application of those laws implicates the religious practices of individuals. "Nothing we have said is intended even remotely to imply that, under the cloak of religion, persons may, with impunity, commit frauds upon the public. Certainly penal laws are available to punish such conduct. Even the exercise of religion may be at some slight inconvenience in order that the state may protect its citizens from injury." Cantwell v. Connecticut (1940).

Hence, reliance on religious practices to commit fraud upon a victim is not privileged under the free exercise clause. Stevens is free to worship however she wishes. She is not, however, permitted to defraud others under the guise of exercising her religious beliefs…. If affirmative misrepresentations or material non-disclosures are carried out concerning the uses of funds obtained from another, with intent to defraud, then those fraudulent acts may be subject to criminal prosecution.

The jury must, of course, determine that her conduct was carried out with fraudulent intent. Defendant may present a defense that she was simply pursuing her religious practices, which may be antithetical with criminal intent. If the jury finds her belief to be sincere, she may be acquitted. But that is a matter for trial, not for a motion to dismiss….

Stevens argues that the statute prohibiting wire fraud has been selectively enforced against her because of her unique Roma ethnicity and religion. In support of this argument, the defendant, in a conclusionary fashion, argues that "[s]imilarly situated individuals are not prosecuted for the same conduct and the differential treatment could only be based on Ms. Stevens' ethnicity and religion." But Stevens has offered no evidence, let alone clear and convincing evidence, that she has been selectively prosecuted. Moreover, she has not offered evidence of any other similarly situated individuals who were not prosecuted, which on its face is fatal to any such claim seeking dismissal of an otherwise valid indictment. She merely argues that because the government does not prosecute all religious groups for accepting donations, or tithes, to the organizations, that the prosecution against her is discriminatory.

This argument is a non-starter. The indictment alleges that Stevens fraudulently induced the victim to provide her money to remove curses and "clean the money." This money was not alleged to be a donation to Stevens. She is not a charitable organization governed under 26 U.S.C. § 501(c)(3). The indictment alleges that, after converting the victim's money, Stevens used it for her and her co-defendant's private interests, including gambling in Las Vegas. Clearly, this was not a religious nor a charitable purpose. According to the government, Stevens is being prosecuted, not because of her religious beliefs, but because of her scheme to defraud the victim in this case. For purposes of a motion to dismiss, the showing of selective prosecution under these circumstances has not been satisfied….