Named in the indictment are Dr. Judith Peterson, psychologist, Gloria Keraga and Richard Seward, psychiatrists, therapist Sylvia Davis and hospital administrator Jerry Mueck. The prosecution intends to establish that the defendants (among other things):
Conspired to defraud health insurance providers of millions of dollars for the treatment of patients falsely diagnosed as suffering multiple personality disorder said to be caused by severe ritualized sexual abuse in satanic cults
Paid several thousands of dollars out in health insurance premiums to keep the patients' policies in effect with the intent to file claims amounting millions of dollars against these policies
Directed subordinate members of the clinical staff to falsify patient records in order to justify these claims
Established a hospital ward with the express purpose to defraud insurance carriers
Abused their status as professionals, applied techniques associated with mind control or "brainwashing", used hypnosis, administered drugs for untested uses and in untested dosages, and used restraints to coerce patients into believing they had been ritually abused in cults
Used the U.S. mails to send out fraudulent bills for treatment.
The prosecutor in the case is Assistant U.S. Attorney Larry Eastepp. In a copyrighted article in The Houston Chronicle by Mark Smith, on October 29, 1997, Eastepp said the case is based on medical records and insurance billings for seven patients treated at Spring Shadows Glen. The identities of the seven patients are not revealed in the indictment, which refers to the patients by numbers. However, all of the patients had generous or unlimited insurance policies.
According to the October 29 article "more than a dozen other patients have made similar civil claims involving the former Spring Shadows Glen Hospital." In August of 1997, plaintiff Lynn Carl was awarded $5.8 million dollars by a federal jury for damages suffered as a result her treatment at Spring Shadows Glen, believed to be the second highest award yet granted in a false memory case. Carl testified that during her stay at Spring Shadows Glen she became convinced that she had 500 different personalities as a result of ritual satanic abuse. In December, a similar suit was settled against treators and a major teaching hospital in Chicago for a record $10.6 million.
NOTE: The False Memory Syndrome Foundation has established a website for the use of media to follow this trial and other breaking news on this issue. Check the website at: http://www.fmsfonline.org