Guru ERHARD Accused of trying to hide assests

Los Angeles Times/March 27, 1991
By Martha Groves

Werner Erhard, the pop psychology guru who in the 1970s parlayed his est human-potential program into a multimillion-dollar enterprise, has been accused of attempting to thwart creditors by transferring valuable assets to close associates under the guise of a sale.

In a suit filed in Marin County Superior Court, Charlene Afremow, a former Erhard associate, said Erhard arranged a phony deal to shift the assets of Werner Erhard & Associates to Transnational Education Corp., which is controlled by Erhard's brother , Harry Rosenberg, and several longtime Erhard associates.

The complaint also alleged that Erhard established a trust and set aside funds to be used to pay attorneys' fees in a variety of cases in which Erhard is a defendant.

Among other things, the suit contended, Erhard conducted a sale of personal property, including valuable wine, art and clothing, to raise cash. According to the documents, the actions were part of a plan by Erhard to transfer assets to "persons acting under his control (and) to liquidate for cash" considerable amounts of property, with an eye toward putting the assets out of the reach of creditors.

"Erhard has both removed and concealed assets," claimed the suit, which was filed Friday. "The circumstances strongly suggest that Erhard made the transfers with the actual intent to defraud, delay and hinder his creditors."

The papers allege that Erhard is to receive half the profits on the sale of any real estate assets, 25% of Transnational Education's profits and a portion of the revenues from the sale of courses and programs that he originated. No cash changed hands in the "sale," the suit alleged.

Superior Court Judge Richard Breiner on Friday ordered Erhard and Transnational officials to temporarily refrain from transferring additional funds.

Afremow -- a longtime Erhard associate who led seminars in est (Erhard Seminars Training) and its 1980s successor, the Forum -- is also suing Erhard and two other officials of Werner Erhard & Associates for $2 million in San Francisco Superior Court, alleging wrongful firing, age and sex discrimination, intentional infliction of emotional distress and defamation.

Various other claims for personal injury and emotional distress, arising out of the seminar business, have also been filed recently against Erhard, a former used car salesman from Philadelphia, and Werner Erhard & Associates. Several individuals have alleged that they suffered psychological traumas after taking the courses, which were characterized by drill-sergeant-like trainers and infrequent bathroom breaks.

Afremow, 56, claimed that she was fired after criticizing such policies as making employees work 12 to 16 hours a day and six days a week, with burdensome travel schedules. In her suit, she claimed that employees were ordered to consider Erhard as "Source" -- in other words, the "source" of everything in their lives -- and were expected to emulate him.

San Francisco Superior Court Judge John Dearman on Monday assigned the Afremow case to Judge Alex Saldamando. Jury selection is expected to begin April 8.

Dearman on Friday had rejected a request by John Keker, Erhard's attorney, to postpone the trial for six months because of adverse publicity arising from a "60 Minutes" program, on which one of Erhard's daughters accused him of incest. Andrew H. Wilson , Afremow's attorney, told Dearman that Erhard has liquidated his assets and fled the United States for the Soviet Union, where he apparently is teaching human-potential and management courses.

A key issue in the San Francisco case is whether the judge will order Erhard to appear, as Wilson has requested. Keker has accused Wilson of attempting to turn the trial into a "media circus" by insisting on Erhard's presence, despite the brouhaha of publicity.

Last week, Erhard attorney Susan Harriman, a colleague of Keker, described the "60 Minutes" segment as a "hatchet job" that "succeeded in portraying Erhard as a depraved monster." According to the San Francisco Chronicle, Harriman's court filings include the results of a lie detector test in which Erhard denied ever sexually molesting, raping or abusing any of his children.

Keker, who led the prosecution of Oliver North in the Iran-Contra case, had no immediate comment on the Marin County complaint, except to say that it was "unusual and, in my view, outrageous when you have a pending lawsuit . . . to go file in another county" without telling the opposing side.

"It's sort of a cheap lawyer's trick," he added.

Transnational Education Corp. has declined to comment, although a statement from the company in February noted that Erhard "will have neither an ownership nor management role in the new company."