J. Donald Walters (Kriyananda) and Ananda Found Liable For "malice and Fraud"
In 1997–98, Anne-Marie Bertolucci, a former resident of Ananda filed suit against Ananda, Ananda minister Danny Levin, and J. Donald Walters (Kriyananda). Kriyananda admitted sexual contacts with most of the women but with full consent but denied it constituted sexual abuse.
The jury found the church (Ananda), and Kriyananda liable for "constructive fraud", with a finding of "malice and fraudulent conduct". The church, Kriyananda and Levin were found liable for "intentional infliction of emotional distress" with a finding of "malice" and a finding of "despicable conduct" against the church. The church was found liable for "negligent supervision" of Kriyananda, with a finding of "malice and fraud" on the part of the church.
Kriyananda was judged to have misrepresented himself as a monk and to have caused emotional trauma, and was ordered to pay $685,000 in compensatory damages, and another $1 million in punitive damages. The jury also found that Levin had made "unwelcome sexual advances". The punitive damages were reduced by $400,000 on appeal. The Ananda Church responded to the million-plus-dollar judgment by filing for protection under Chapter 11 of the federal bankruptcy code. That allowed Ananda to settle the lawsuit by paying $1.8 million dollars to Bertolucci and her attorneys. They presented, according to Kriyananda, "lies and complete distortions of the truth." Ananda hired a private investigator who was caught rummaging in the trash of opposing counsel. The judge's sanctions of Ananda included disallowing the questioning of the women alleging sexual misconduct.
In March, 2004, Italian authorities raided the Ananda colony in Assisi, responding to allegations of a disgruntled former resident who accused Ananda Assisi of fraud, usury and labor law violations. Nine Ananda residents were detained for questioning. They also had a warrant for Kriyananda's detention, but Kriyananda was in India. A seven-year long investigation followed. In March 2009 the judge ruled that the case was "non luogo a procedere perché il fatto non sussiste" (not to be continued as the matter is without substance).
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