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DOCUMENT TITLE: Stolen Hubbard Property Valued at $5 Million
SUBJECT: Gerald Armstrong, returning approximately $5 million worth of stolen Hubbard intellectual property to CST; Lawrence E. Heller, Special Director of Church of Spiritual Technology (CST) who negotiated settlement
PARTIES: Gerald Armstrong, thief; Michael Flynn, Armstrong's attorney, accomplice in the theft, and co-conspirator; Lawrence E. Heller, Special Director of CST who negotiated "settlement"


During 1980 and 1981, Gerald Armstrong stole approximately 30,000 documents, including original unpublished manuscripts, later valued at $5 million, from the Hubbard estate property while Sherman Lenske, Special Director of CST, was in charge of the estate property. Armstrong has been proven to have had ties to Sherman Lenske, admitting that he was "working with Hubbard's lawyers in L.A." It is impossible that Armstrong could have converted that much highyly valued intellectual property belong to the estate without Lenske's willing help.

That Armstrong took the documents illegally is incontrovertible: Judge Breckenridge ruled that a prima facie case for two counts of conversion had been made in the Armstrong case, further confirmed by the Supreme Court of Judicature, London, which observed, in a related case, that "Judge Breckenridge held that Mr Armstrong had been guilty of conversion." And a church publication issued on 22 April 1982, after Armstrong had left with the documents, also said that he had been guilty of theft.

That Armstrong had transported the $5 million in stolen property across state lines and delivered it to his coconspirator and "attorney" Michael Flynn is evidenced in an affidavit by La Venda Van Schaick, another Flynn client.

Here are excerpts from the Los Angeles Times story covering an undisclosed 6 December 1986 "settlement" with Armstrong and his attorney, Michael Flynn. In fact, the "settlement" was Armstrong's pay-off for his important role in the fraud. As is documented in the second excerpt below by Stephen A. Kent of the University of Alberta, the so-called "settlement" included $800,000 to Armstrong, arranged by Sherman Lenske law partner and fellow CST Special Director Lawrence E. Heller, also party to the fraud and grand theft.

These excerpts establish the estimated $5 million value of the property that Armstrong had stolen. They also document that Lenske, Lenske & Heller, in drawing up the settlement, built in protection for themselves, and for Armstrong, and for his attorney, Michael Flynn in the form of a mutual gag-order that fully insulated all parties from any disclosure, ever, about the conspiracy to commit grand theft that they had all been principals in. The description of the mutual gag-order quoted by Kent, below, is garbled syntax, but the intention is clear

Los Angeles Times
December 17, 1986, Wednesday, Southland Edition
BYLINE: By KIM MURPHY, Times Staff Writer

BODY: A former archivist for the Church of Scientology has agreed to return thousands of pages of confidential church documents in exchange for an undisclosed payment as part of a settlement of his lawsuit against the church, attorneys confirmed Tuesday.
     ...Armstrong will receive an undisclosed cash payment under terms of the confidential settlement approved last week in Los Angeles Superior Court.
     ...The papers, which a collector of Hubbard's work valued at $5 million, include letters from Hubbard to his various wives, manuscripts, a Hubbard biography and various letters described in court exhibit lists as "Penniless," "Suicidal Inclinations" and "Ill and Broke." The file also included a handwritten memorandum, "Open Up a Total War on IRS Gestapo."

FROM: Marburg Journal of Religion, Volume 6, No. 1 (January 2001)
By Stephen A. Kent, (Ph.D.)
Department of Sociology
University of Alberta Edmonton, Alberta, Canada

By 1986, Armstrong was part of a large lawsuit by former members against the organization. The lawyer for this suit, Michael Flynn, eventually brokered a deal with Scientology that gave each of his clients a substantial amount of money (in Armstrong's case, US $800,000.00) after all of them, individually, signed settlement agreements with the organization.

...The document that Armstrong signed (on December 6, 1986) was entitled, "Mutual Release of All Claims and Settlement Agreement." Armstrong agreed to dismiss the lawsuit that Flynn was litigating on his behalf. He also agreed, "no further claims arising out of his experience with, or actions by, the Releasees [i.e., various Scientology organizations and people], from the beginning of time to and including the date hereof, which may now exist or which may exist in the future may ever be asserted by him or on his behalf, against the Releasees" (Mutual Agreement, 1986: 6). Both parties, agreed, moreover, "that in the event of any future litigation between Plaintiff [Armstrong] and any of the organizations, individuals, or entities either alleged in this lawsuit or activity similar in fact to the evidence that was developed during the course of this lawsuit, will not be used [sic] by either party against the other in any future litigation. In other words, the 'slate' is wiped clean concerning past actions by any party" (Mutual Agreement, 1986: 11). Indeed, this interpretation about mutual silence concerning the other party seems to be the interpretation given by an attorney, Lawrence E. Heller, who had been involved (on Scientology's behalf) in the settlement agreement negotiations:

[T]he universal settlement provided for non-disclosure of all facts underlying the litigation as well as non-disclosure of the terms of the settlements themselves. The non-disclosure obligations were a key part of the settlement agreements insisted upon by all parties involved.

...The contractual non-disclosure provisions were the one issue which was not debated by any of the parties or attorneys involved.

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