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The Black and White of Justice
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Legal Arena

Cyberspace plot Revealed

Internet Extortion Scheme Exploded

By Ben Buttler

“Looks like I got myself in a terrible mess, which will cost me more than just my job.”

— E-mail message from former U.S. Embassy computer programmer Peter Mante.

The Church of Scientology and landmark legal rulings have never been strangers. Consider just the past half-year:

“Scientology Wins First Internet Fight — Landmark case says copyright laws apply to material in Cyberspace.”

Denver Post, January 20, 1996.

“Church of Scientology Wins Lawsuit.”

Japan Times, January 21, 1996.

“Internet access providers may be responsible for policing the postings of their members after all ...Netcom may be liable for copyright infringement...of text copyrighted by the Church of Scientology.”

Wall Street Journal, November 28, 1995.

Here’s another that may well be coming soon to a headline near you:

“Church Exposes Plot to Use copyright Infringement as a Tool for Extortion; Conspirators to Face Justice for International Scheme.”

The words at the beginning of this article, from Peter Mante, one of the lead conspirators, reveal that the day of reckoning has dawned for a band of Internet racketeers.

A Cyberspace Cabal

Before this plot spread to international dimensions it began with the ambitions and prejudices of a small group who sought to service their greed by bringing together a combination of theft, trafficking in stolen property,Copyrightinfringement and extortion, with disclosure of confidential Church of Scientology scriptures as their threat and the Internet as their vehicle.

At the heart of the scheme is the fact that more than 40 million words of Scientology scripture are freely available for anyone to read, while a minute percentage of sacred texts are confidential. Access to that discrete body of religious writings is strictly limited to those who both have attained the requisite level of spiritual development to prepare for the study of such works and have demonstrated that they live their lives according to the ethical and moral precepts that Scientology teaches. But the vast majority of the works of the religion are available for any and all to see.

With the courts moving to halt the copyright infringements in the United States, the scene shifted to Holland.  The Church discovered postings in the name of Felipe Rodriguez on the Internet -- apparently attempting to exploit the ignorance of Dutch Internet users.

All of Scientology’s writings — published and unpublished — are copyrighted, and, exercising the same prerogatives as any copyright owner, the Church protects these copyrights. Yet it is through copyright infringements that this pack of opportunists undertook their effort to extort vast sums of money from the Church. How? On the Internet, where potentially broad exposure is cheap and easy, and where anarchy seems in some quarters to be regarded as a sort of perverse virtue instead of a vice.

Using a copy of a stolen version of the confidential materials, Virginia resident Arnaldo Lerma posted some of those materials on the Internet. He had been warned beforehand that he was violating the law, but he refused to stop his actions. This led to a raid of his home to seize evidence led by U.S. marshals, and ultimately a U.S. federal court judgment of copyright infringement (see “Rights of Ownership on the Internet Protected”). Cohorts of Lerma’s find themselves in a similar predicament as their cases proceed toward final judgment.

Lerma and the others expected — indeed, welcomed — the lawsuits. They mistakenly saw them as their ticket to riches, assuming the Church would pay large sums of money and settle those suits in exchange for an agreement that they would no longer misuse the copyrighted materials. But the Church wouldn’t pay, and as the legal heat built up beneath them, Lerma and his cohorts looked for assistance around the world.

One user who was fooled into thinking that there was an opportunity to profit was known on the net by his alias, “Newkid.” As the plot developed, others knew him as Snorri Helgarsson. In the real world he was Peter Mante, an employee of the U.S. Embassy in Holland.

Mante’s shame and subsequent dismissal from the embassy is only a tiny part of a story that reads like a spy novel, complete with secret messages, confidential meetings in coffee houses, mysterious phone calls, aliases upon aliases, and abject betrayals. But ultimately, at the heart of all the intrigue, the motive was always greed.

Lawsuits Filed to Protect copyrighted Material

The criminal dream of “easy” money through extortion was powerfully alluring for some, both in the United States and in Holland. One infringer and extortionist started producing compact discs containing copyrighted Church scriptures, offering them for sale for hundreds of dollars.

When the Church contacted the infringers and asked them to stop, the violators responded by mounting a campaign in the media and in the Internet community to smear the Church’s efforts to protect its property — cynically claiming selling pirate CDs was an exercise of their right to “freedom of speech.”

Some Internet users joined forces with the violators, not understanding the background nor realizing that “freedom of speech” was the euphemism of the guilty and a smokescreen for wanton violations of the law.

Given the strong interest in Scientology among a broad range of people, there is a large volume of communication on the Internet about the Church. Some of it is critical. Yet the Church has never made any attempt to suppress the right of any person to speak their mind or post critical comments. Freedom of speech is a treasured right to which Scientologists wholly subscribe. But there is no “freedom to infringe,” and the Church took legal action only once the copyright of its scriptures was threatened and no attempt by the Church at dialogue and peaceful resolution satisfied the infringers’ avarice.

During the past year, three lawsuits were filed in the United States by the Religious Technology Center—the Scientology Church that safeguards the purity of the religion’s practice—against the former Scientologists who sought to abuse the Church’s property rights. In each case, the materials are now protected by a court order.

Action Moves to Holland

With the courts moving to halt the copyright infringements in the United States, the scene shifted to Holland. It was in autumn 1995, shortly after U.S. federal marshals raided Lerma, that an anonymous subscriber to an Amsterdam Internet access provider posted copies of the scriptures on a website — the very same ones posted by Lerma.

Cartoon of man typing on keyboard The Church contacted the access provider several times and asked them to remove the materials, pointing out that they were copyrighted. The provider refused, stating that it is not
responsible for what its subscribers put on their homepages. But shortly after this, the Church discovered postings in the name of Felipe Rodriguez on the Internet—apparently attempting to exploit the ignorance of Dutch Internet users regarding the full background of the situation.

Parroting the same disingenuous “freedom of speech” lies unsuccessfully advanced in the U.S., the messages encouraged Internet users to refuse to cooperate with the Church, falsely characterized the nature of the copyrighted materials at issue, and suggested that users even ignore the
illegality of their actions. The messages also distorted beyond all recognition the actions the Church had taken to protect its copyrightsthrough legal means, which were in fact actions any other owner of a created work could and likely would have taken.

A few other subscribers and other Internet access providers followed the lead and reposted the same copyrighted materials.

Although the Church contacted each one repeatedly to request that they simply honor their own user agreements—which prohibited copyright infringement—a few refused to do so. The Church even went so far as to make comprehensive evidence available to the access providers so they could see for themselves that the postings were infringements.

The access providers in Holland had been banking on the Lerma case in the United States which concerned the same materials. They hoped to see a ruling from the judge that would justify the materials being on the Internet or one which indicated that access providers are not liable for copyright infringement by their subscribers.

When the exact opposite occurred and the Lerma court made it clear that the law does apply to the Internet, the Church informed the infringing access providers in the hope that they would come to their senses. Again, it was requested that the access providers take action to remove infringing material from their system. Several then did so, but others refused.

To put this in perspective, consider this scenario: You are a car owner whose car is stolen. You then find people driving it and approach them, asking for the return of your car. The thieves tell you that you don’t own the car, it “belongs to the people” and refuse to turn it over. So you present evidence of your exclusive ownership of the vehicle. But the thieves, knowing full well that the car is stolen, claim that you have no right to demand the return of the car. You go to the police and the thieves then proclaim loudly that their right to drive vehicles on the streets is limitless and that preventing them from using your stolen car is just an effort to prohibit them from exercising their constitutional rights to use the roadways.

You obtain a court ruling that it is improper for someone other than yourself to possess or drive your car, and that those who have done so must pay you damages. Now they really begin to wail about how you have oppressed them and denied them their “rights.”

Car thieves could not arouse anything but incredulous laughter were they to accuse the true owner of violating their rights in trying to get his stolen car back. What is the difference between this argument and the one advanced by these Dutch access providers?

Left with no alternative, lawsuits were filed by RTC against the intransigent access providers.


But there was yet another rip-off scheme.

It started with a self-styled Mata Hari who identified herself as “Marlene,” calling the Church of Scientology in Amsterdam and in the United States. She claimed that a conspiracy existed in Holland to encourage access providers and ordinary users to place the Church’s materials on the Internet, and demanded $20,000 in exchange for “proof” of this. The central player in the conspiracy, she claimed, was a Snorri Helgarsson, who was working with Karin Spaink and Felipe Rodriguez of XS4ALL.

To get to the bottom of the matter, an attorney firm which represents the Church of Scientology in the United States retained a retired New York police detective who specializes in economic crime investigations to look into the matter.

The investigator went to Holland and met with “Marlene,” who eventually identified herself as Jennifer Mae Kadir, a Dutch national formerly employed at the U.S. Embassy.

Although the Church refused to pay the $20,000, Kadir provided written documents to substantiate her story and it was she who informed the investigator that “Helgarsson” was “Newkid,” and that his real name was Peter Mante.

The day after that meeting, Mante himself contacted the Church in Amsterdam. He confirmed the claims of a conspiracy against the Church, and in a subsequent meeting with Church representatives asserted that he could provide documents which would prove it — for a price.

 Price $1 Million

The figure Mante ultimately came up with was $1 million, payable to a Swiss bank account. In exchange, he proposed, he would steal secret documents from the U.S. Embassy to prove his claims that a group of Embassy employees were behind a scheme to violate the Church’s copyrightsand civil rights in Holland and to cause it financial harm.

As evidence that he had valid materials, Mante produced what he claimed was a U.S. government cable giving him official authorization to violate the copyright of the Church.

He also claimed that he had access to documents as well as electronic mail between himself and others that would demonstrate that there was an organized effort to place the Church’s copyrighted materials on the Internet.

Naturally, the Church immediately notified the embassy and the U.S. State Department of the threat to national security posed by Mante’s extortion attempt and his offer to use his position as an embassy employee to steal official documents.

State Department security personnel quickly determined that the so-called government cable was a forgery and Mante’s employment was promptly terminated.

The Church then filed penal complaints with the authorities in Holland and the United States for further action and possible prosecution.

So as it stands, blackmail seems to be bad business for the would-be blackmailer. Lerma faces damages he may never be able to satisfy. Mante faces a lonely, uncertain future. The other conspirators, still holding out for the payoff that never materialized, face justice in the near future. They are learning that extortion and copyright infringement are an unhealthy mix.

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