Breaking The Silence: Mail Fraud?

Chapter Six:
Mail Fraud?
 

 Over the past twelve years Alnor has remained the most active and key player (recruiting, nurturing, and aiding other players) in keeping the CRI controversy alive, alleging again and again in numerous forums that Hank has abused funds and been guilty of plagiarism and mail fraud.[1] For the remainder of this book I will address and answer all three of these allegations. I will start with the most serious and most recent, that CRI committed mail fraud, which resulted in CRI prosecuting a lawsuit against Alnor.

On January 26, 2005, a news release for Texas A&M University-Kingsville announced that the school’s very own

assistant professor of journalism Dr. William Alnor feels he may have uncovered financial misdeeds on the part of evangelist Hank Hanegraaff.…Through his personal online magazine The Christian Sentinel, Alnor reported that Hanegraaff was soliciting funds for his Orange County, California-based ministry, the Christian Research Institute (CRI), to make up for three months worth of donations Hanegraaff said had been lost because of misrouting by the U.S. Postal Service.

CRI claims that their mail was being wrongly delivered to a business named On-Target Marketing from October 2004 through December 2004, when an On-Target employee contacted the ministry to tell them of the mistake. According to CRI, they were able to recover only a bag’s worth of their mail from On-Target, with the rest having been thrown away. The ministry said they then contacted the responsible post office of Ranch [sic] Santa Margarita to report the error.

Alnor said he spoke with employees of the post office in question and found that none of them knew of any delivery problems with CRI. That led to Alnor filing a complaint against Hanegraaff and CRI with the U.S. Postal Inspection Service.

Following the posting of Alnor’s online story, the Los Angeles Times wrote up the events in an article published January 23. In their story, they reported that On-Target Marketing only knew of one tray of misrouted CRI mail, which was reported to the ministry the same day, and that no CRI mail had ever been thrown away.[2]

Alnor’s Christian Sentinel article was titled, “CRI—­Hanegraaff under Mail Fraud Investigation?” With Alnor’s allegations being given wide media coverage and Internet dissemination, CRI began receiving communications from disturbed donors who were worried that they may have been scammed by CRI. Up to this point in time, CRI had largely ignored Alnor’s persistent attempts to destroy both Hank’s reputation and CRI’s financial base, but this time, by accusing CRI of criminal activity, he had gone over the line. He was seriously impairing the work we believe from the depths of our beings that we were called by God to perform. By his continual assault on a work of God, his utter disregard for truth (from his unrepentantly bearing false witness against me for ten years to his practiced ability to twist every new development at CRI to put Hank and the ministry in the worst possible light), and his consuming hatred of Hank, he was, quite frankly, behaving as a servant of Satan and not of God and removing any basis for us to accept his Christian profession (James 2:14–18; John 8:44–45; 1 John 3:14–15) . For the sake of the ministry, the board of directors of CRI determined it was necessary to have the falsity of Alnor’s charges against CRI established in a court of law.

To quickly identify the many problems with Alnor’s reports on both CRI’s appeal letter and the lawsuit, I will quote from, and then respond to, the series of articles he wrote, beginning with his original article, posted on his Web site on January 19, 2005.[3]

Alnor’s Actionable Allegation
 

Bill Alnor alleges: “Christian Research Institute (CRI) President Hank Hanegraaff has become the focus of a federal criminal mail fraud investigation sparked last week by an unusual ‘urgent memo’ fundraising appeal letter he released on Friday on CRI’s website.”

CRI responds: While Alnor at least exercised the discretion of ending the title of his article with a question mark, in this opening sentence to his article he comes out and flatly declares that CRI is under a federal criminal investigation. As we shall shortly see, there was no basis for making this damaging allegation and therefore this allegation was the basis for CRI’s lawsuit.

Bill Alnor alleges: “The officer in charge at the post office where CRI receives its mail by maintaining PO Box 7000, disputes Hanegraaff’s allegation. The officer in charge, who identified himself as ‘Gus,’ claims it never happened, and referred the incident to the United States Postal Service’s Inspector General’s Office, which has begun looking into the case.”

CRI responds: After reviewing all the documents submitted by both CRI and Alnor, the Court of Appeal of the State of California concluded that the evidence confirmed that CRI was not targeted by a post office mail fraud investigation;[4] thus Alnor’s allegation is certifiably false.

Bill Alnor alleges: “A mail fraud report was filed in connection with the case.”

CRI responds: Alnor neglects to mention here that he was the one who filed this report, thus making it seem as though a government employee or official, or someone else independent of Alnor, believed CRI’s appeal letter appeared to be mail fraud. Once again, Alnor inserts himself as a major and necessary player in the news he himself is reporting.

Bill Alnor alleges: “’This looks like mail fraud to me,’ said an investigator familiar with nonprofit prosecutions. ‘Hank could go to jail for this.’”

CRI responds: Notice that Alnor does not name his source, one of the many yellow journalistic practices I tried in vain to correct him of when he was writing for the Journal. He seeks to heighten the seriousness of Hank’s alleged misdeed by citing an authority without identifying the person or even the kind of “investigator” he is, thus making it impossible for his source to be evaluated or contested. This is pure sensationalism.

Who Was Looking into What?
 

Bill Alnor alleges: “At press time the case was also being referred to other government agencies for analysis and possible prosecution, including the Federal Trade Commission, the FBI and the U.S. Department of Justice’s Computer Crime and Intellectual Property Section (CCIPS).”

CRI responds: This is another glaring example of how Alnor manufactures a story and seemingly has little trouble making a false statement of fact to embellish or sensationalize his manufactured story. The only investigation that was ever conducted related to the post office’s alleged mishandling of CRI’s mail. Despite Alnor’s attempt to trigger an investigation of CRI and Hank, no such investigation was ever initiated. Moreover, at the time Alnor made the foregoing allegation, even the post office investigation had not begun. That investigation, according to the investigator’s own written report, was initiated by the postal service on its own after reading a newspaper article regarding the controversy that Alnor had created. It concerned the post office’s own conduct and not that of CRI or Hank. There simply was nothing to “refer” to other agencies for criminal prosecution.

In order to demonstrate conclusively to the court the falsity of Alnor’s allegation, CRI’s counsel made a request under the Freedom of Information Act to the USPS Inspector General, the Federal Trade Commission, and the FBI for any record of any investigation concerning CRI or Hank. Each agency provided a written response stating that there was no such record, and each of these documents was admitted into evidence in court.

Bill Alnor alleges: “’On occasion a machine may address some envelopes incorrectly, not just to CRI but other companies as well, and that’s why the Post Office tries to visually verify envelopes,’ the unnamed Rancho postal clerk noted. There may have been some inadvertent mistakes, she insisted, but ‘not into the hundreds of thousands of dollars as [Hanegraaff’s] letter claimed unless one envelope became lost that contained a check for several hundred thousand dollars,’ she said, laughing.”

CRI responds: Alnor quotes an unnamed clerk as if her comments are authoritative or official and as if an employee’s denying serious failure on the part of her own office settles the matter. In an article on CRI’s suit of Alnor, Christianity Today noted,

The Los Angeles Times and ChristianityToday.com’s Weblog reported allegations from Alnor that Hanegraaff and CRI may have engaged in fundraising exaggeration. However, new information provided to CT, MinistryWatch.com, and the Evangelical Council for Financial Accountability (ECFA) corroborates the [CRI appeal] letter’s claims.

According to a January 23 story in the Los Angeles Times, Alan Baron, chief operating officer for On-Target Direct Marketing in Foothill Ranch, California, said the company received just one tray of misdirected CRI mail and informed the ministry that day.

On-Target told CT that employees discovered discarded mail in a dumpster and returned to CRI what it believes is all of the mail it received by mistake. However, Baron did not rule out that employees might have inadvertently thrown some mail away.

Hanegraaff told CT that its marketing partner, KMA Media, has documented that the pieces of mail CRI received in response to its direct-mail efforts last October and November were down more than 36 percent compared to the same period in 2003. CRI says the 36 percent decline is equivalent to nearly 2,500 pieces of mail.

The apologetics ministry reported revenues of $7.6 million in the fiscal year ending in 2003, so CRI’s claim of a loss in the hundreds of thousands of dollars is credible. CRI says the tray of mail retrieved from On-Target contained more than $30,000 in donations.

CRI officials say they believe the problem of misdirected mail at the local Rancho Santa Margarita Post Office continues. CRI chief financial officer Bob Eaton told CT that the ministry continues to monitor problems with mail delivery. Eaton says CRI receives several pieces of mail per week intended for other organizations, even though local postal officials say they have corrected the problem.

CRI provided CT with the contact information of two Rancho Santa Margarita businessmen who said they, too, had experienced problems receiving their mail. One told CT, on condition of anonymity, that the local post office has had “great problems.” He said that, after reading a press account about the CRI postal dispute, “We all passed the same article around and said, ‘See, we aren’t the only ones.’” A local sales representative for a steel company said, “We really noticed [a problem] when the mail just basically stopped.”[5] (emphases added)

In his April 1, 2005 update to this story,[6] Bill Alnor alleges:

Alnor filed a mail fraud complaint with the U.S. Postal Inspection Service and with the Rancho Santa Margarita Post Office. Alnor then received a January 19, 2005 letter from Patricia S. Sweeney, manager of the Criminal Investigations Service Center of the United States Postal Inspection Service, that assigned it a number C/MJC/006/S1137458/C1289672 that states in part, “the information you provided will be reviewed to determine if this matter constitutes any violation of the Mail Fraud or False Representation Statutes. If additional information is needed, you will be contacted directly. Again, thank you for assisting us in identifying suspected incidents of mail fraud.”

Last week, however, Yvonne Guerrero from the public affairs office of the postal inspector said the CRI mail fraud case is now “under review” by the postal inspector’s office but it was deemed not significant enough “at this time” to forward it to field investigators.

“It has not yet reached a threshold to forward it to the field,” Guerrero said. “It would depend on how many people lost money to this particular appeal. This could change.”

However, if more people contact the post office with mail fraud complaints about CRI that might do the trick, Guerrero said. She was also aware that Hanegraaff’s unusual appeal was also delivered through the mail. “When the case was brought before the U.S. Attorney’s office they thought the dollar amount lost by customers was not evident enough in this case at this time to throw it into the field unless more people come forward” who sent money to CRI, Guerrero said. “We have hundreds of cases similar to this, and we don’t have the resources to investigate them all,” she said.

“It gets tricky when one deals with religious organizations or churches,” Guerrero said. “People often don’t want to complain about them to the government.” If one wants to file a mail fraud complaint against an organization, a secure form is online with full instructions, she said. To access it go to:

https://www.usps.com/postalinspectors/fraud/MailFraudComplaint.htm

CRI responds: Alnor would like the readers of his online tabloid to think that the U.S. Postal Inspection Service (USPIS) viewed CRI’s appeal letter in the same cynical manner he did, but it seems safe to predict that most people who file mail fraud complaints with the USPIS receive comparably polite but noncommittal replies such as Alnor received from Sweeney and Guerrero. It would be both reasonable and charitable to infer that a professional such as Guerrero would not presume that an organization is guilty simply on the basis of a complaint, before an investigation might be launched.

Furthermore, Geurrero is on record disagreeing with Alnor about the very claim he quotes her to support. She told MinistryWatch.com that “if there is an investigation, the person who filed it would have been notified.” MinistryWatch further noted that

there is a disparity between Alnor’s report and what postal officials say. Alnor said, “The southern California Postal Inspector’s office told me there was now a criminal investigation under way by their office.” However, Guerrero countered, “There is a complaint. But I did not say there was a criminal investigation.” The number that Alnor and an associate pointed to – C/MJC/006/s1137458/C1289672 – as proof of an investigation, is actually the case number assigned to the Mail Fraud report, according to Patricia S. Sweeney, the manager for the Criminal Investigation Service Center of the U.S. Postal Inspection Service office in Chicago.[7]

Please note that Alnor, who brought this appeal letter to the USPIS’s attention, effectively proceeds to encourage readers of his tabloid to file complaints so that the USPIS will look into it! In terms of a fraud inspection, he is reporting on his own activity from start to finish. To point out the obvious: everything he writes reeks of his agenda to make CRI look guilty and to discourage people from financially supporting it.

Bill Alnor alleges: “Meanwhile, CRI is hopping mad at Alnor, and allegedly on April 1 CRI filed a lawsuit against Alnor alleging defamation because of the old claim published below in the Jan. 19 Christian Sentinel that the USPS was investigating them when clearly the USPS was looking into the situation—and still has it under review.”

CRI replies: Notice the equivocation in Alnor’s choice of terms. CRI sued him for originally accusing the ministry of being under “federal criminal mail fraud investigation.” After CRI’s suit was filed, he only admits to alleging that “the USPS was investigating them” and then attempts to justify this weakened allegation by affirming that “clearly the USPS was looking into the situation—and still has it under review”—as if “looking into” and “under review” in any way approach the same meaning as conducting a “federal criminal mail fraud investigation.” As the California Court of Appeal observed,

Plaintiffs’ sole cause of action against Alnor is libel. Civil Code section 45 provides: “Libel is a false and unprivileged publication by writing, printing, picture, effigy, or other fixed representation to the eye, which exposes any person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation.” There is no question the phrase “Federal Criminal Mail Fraud Investigation Launched Against CRI and Leader Hank Hanegraaff” exposes plaintiffs to “hatred, contempt, ridicule, or obloquy,” would cause them to be “shunned or avoided,” and has a tendency to injure Hanegraaff in his occupation.[8]

At the most (and this is far from clear, as the Court noted[9]), the USPIS had “looked into” whether a criminal mail fraud investigation should be initiated concerning CRI and, although deciding not to do so at that time, it was keeping the matter “under review.” It clearly had not initiated such an investigation (and four years later it still has not done so). In his April 1, 2005 update, therefore, Alnor backs down from his original discredited and damaging allegation about CRI while attempting through equivocation to fool the reader into believing that he is standing behind what he said.

Nonetheless, emboldened by the Court of Appeal’s two-to-one decision to overrule the lower court and strike CRI’s complaint, Alnor stated in a June 20, 2007 article,[10] “It also turned out that my initial article about a criminal probe against Hanegraaff and CRI was entirely accurate at the time it was written.” That is an amazing statement, since the same Court opinion that Alnor bases this claim on concludes, after evaluating all evidence submitted to the Court, that “plaintiffs [CRI] have met their burden to prove falsity because the FOIA [Freedom of Information Act] letters provide sufficient evidence the USPS did not investigate the plaintiffs, contrary to Alnor’s claim.”[11] In other words, the Court concluded that there was no evidence of a federal criminal mail fraud investigation and thus CRI had met its burden to prove that Alnor was flat wrong and had defamed Hank and CRI. If this is so, why did the Court of Appeals grant Alnor’s motion to have the case stricken? As we shall see below, this was solely because of the higher (many would argue unreasonably high) bar that a public figure such as Hank must cross to successfully prosecute a defamation case.

Bill Alnor alleges: “It is also true that no one at CRI bothered to contact Bill Alnor to correct any part of the story they thought was wrong, despite a public appeal to do so. CRI never returned phone calls to Alnor inquiring about the case.”

CRI responds: This is true, but why was it the case? For CRI to take Alnor up on his offer there would need to be some good faith; but Alnor has long ago destroyed any remaining shred of that, so this appeal can only be viewed as disingenuous. Why would we supply him with any information when he has a fourteen-year track record of trying to discredit CRI at every turn, and to spin whatever information he is given so it reflects negatively on CRI?

Insignificant Victory—Significant Vindication
 

Bill Alnor alleges in the June 20, 2007 article previously cited: “In filing the 2005 law suit against me the court ruled that CRI’s arguments could not be sustained, and the suit was apparently meant to silence a critic. Thus in filing the suit, Hanegraaff/CRI violated California’s anti-SLAPP legislation.” In his August 7, 2007 update on his Web site, Alnor reiterates the same claim: “Victory! CRI/Hank Hanegraaff loses merit less [sic] defamation law suit against Bill Alnor! CRI to pay up to a quarter million dollars to Alnor’s legal team. As was expected, the Hank Hanegraaff and The Christian Research Institute vs. William Alnor Case was thrown out of court. Moreover, a California appeals court ruled that CRI/Hanegraaff violated California anti-SLAPP legislation by filing frivolous law suit against Alnor.”

CRI responds: The success of Alnor’s high-powered legal team, the ACLU and the law firm of Ross, Dixon, & Bell (six lawyers working against CRI’s one lawyer, Tom Chun), at getting CRI’s complaint stricken by the court may allow Alnor to claim victory as far it goes, but it does not go very far. CRI could have appealed the appellate court’s decision to the full panel of the court of appeal and beyond, if necessary, and there is a reason why we did not: the official document published by the court satisfactorily accomplished both of the purposes CRI had in bringing this complaint against Alnor: (1) it vindicated CRI from Alnor’s charge of mail fraud and (2) it exposed Alnor’s unprofessional and harmful journalistic practices. It was never CRI’s primary concern to punish Alnor monetarily, and that would have been the only reason to carry the costly legal proceedings any further.

We have already seen that the court ruling vindicated CRI of Alnor’s charge that we were being investigated for mail fraud. As to his journalistic practices, the court opinions (including that written by the two judges who decided in favor of Alnor’s motion to strike) are so damaging to Alnor’s journalistic credibility that it was amazing that he put a link to the document up on his Web site.[12]

A reading of the same document also shows that Alnor’s claim that the court found CRI’s lawsuit “meritless” and that we are somehow lawbreakers because we “violated California anti-SLAPP legislation by filing frivolous law suit” is preposterous. On the contrary, the court clearly found merit in CRI’s lawsuit, holding that we had met our burden to prove by a preponderance of the evidence that Alnor’s allegation that CRI was under a mail fraud investigation was false. The only reason the court granted Alnor’s petition to have the complaint stricken from the court was because two out of three judges in the appellate court assigned to the case did not believe that CRI met its burden to prove actual malice on Alnor’s part by clear and convincing evidence. The original trial judge did believe CRI had met this burden to show actual malice, which is why Alnor and his ACLU/ Ross, Dixon, & Bell legal team had to appeal the lower court’s ruling. It was our judgment that with the lower court judge and the presiding judge of the appellate court both finding that we had demonstrated actual malice on Alnor’s part (meaning two out of four judges believed we had proven actual malice and all four agreed we had proven falsity), the merits of CRI’s case had been vindicated and it was unnecessary to appeal the case to a higher court.

The anti-SLAPP legislation is a legal provision meant to protect critics of public figures from having their free speech rights chilled through litigation. If they are sued, they may present the court with a motion to strike the complaint from its dockets on the basis of the anti-SLAPP provision. The plaintiff must then demonstrate “a probability of prevailing on the claim,” which includes not only proving “by a preponderance of the evidence” that they have been defamed but also proving “by clear and convincing evidence” that the defamation occurred with “actual malice.” Clear and convincing evidence, the court explains, ‘‘’requires a finding of high probability. The evidence must be so clear as to leave no substantial doubt. It must be sufficiently strong to command the unhesitating assent of every reasonable mind.’”[13] The court defines “actual malice” as “publishing a knowingly false statement or where he ‘entertained serious doubts as to [its] truth.’”[14] We see then that a tremendous burden is placed on public figure plaintiffs such as Hank in defamation cases that is not placed on other citizens. The court describes it as “‘a heavy burden, far in excess of the preponderance sufficient for most civil litigation.’”[15]

In their published opinion on the case, the two judges who found that CRI had not proven that Alnor was guilty of “actual malice” went to great lengths to describe how far Alnor could go without crossing the line. They explained, for example, that “the failure to conduct a thorough and objective investigation, standing alone, does not prove actual malice, nor even necessarily raise a triable issue of fact on that controversy. Similarly, mere proof of ill will on the part of the publisher may likewise be insufficient.”[16] They stressed that “actual malice ‘“is not measured by whether a reasonably prudent man would have published, or would have investigated before publishing. There must be sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication.”…Lack of due care is not the measure of liability, nor is gross or even extreme negligence.’ …Thus ‘mere failure to investigate the truthfulness of a statement, even when a reasonably prudent person would have done so, is insufficient’ to demonstrate actual malice….”[17]

The majority opinion finally states:

We conclude that plaintiffs have not demonstrated Alnor acted with actual malice by clear and convincing evidence. We recognize the actual malice requirement places a substantial barrier to defamation claims brought by a public figure, particularly at this early stage of the proceeding….Our nation’s highest court has recognized: “This standard administers an extremely powerful antidote to the inducement to media self-censorship of the common-law rule of strict liability for libel and slander. And it exacts a correspondingly high price from the victims of defamatory falsehood. Plainly many deserving plaintiffs, including some intentionally subjected to injury, will be unable to surmount the barrier….[18]

The above excerpts from the court document make it quite clear that as a public figure, Hank was faced with a daunting challenge in proving that Alnor was guilty of actual malice, and, conversely, Alnor could get away with a lot of reckless, untruthful, and malicious reporting without being called to account for it, as long as he did not so clearly demonstrate knowledge that what he was alleging was false that no reasonable person could fail to see it. Alnor was well aware of this fact. Back when he was pursuing Phil Aguilar in a manner very similar to how he has pursued Hank, he candidly wrote me in a December 16, 1991 letter:

I am also appreciative of your being afraid of my getting embroiled in a lawsuit. I was aware of that when I sent out the Set Free mailing on my own stationary without involving CRI. The truth is that I was the only one with guts enough to mail it. I knew he [Aguilar] would flip out when I sent it. But please also realize that I am extremely well-versed in libel; in fact, I teach libel law at Temple University in Philadelphia. I have had extensive experience with it from my days at Religion Report and at the newspaper. Aguilar has gone to three attorneys about my mailing. Each of them told him to forget it. How can he prove malice? How can he prove my mailing wasn’t true and was the result of reckless disregard for truth? (For example, I still think it is substantially true but I will ‘fix’ any perceived inaccuracies.) To complicate matters further Aguilar would be considered a public figure. The mailing was a success. Prior to it going out Aguilar and the posse were performing at a dozen churches per month. After the mailing the posse was only invited to one church—a Vineyard in Palm Desert. These are figures from Aguilar’s own newsletter.

This quote from 1991 provides a stunning window into Bill Alnor’s end-justifies-the-means rationale for crusader journalism. This is how he has operated all along. He takes calculated risks with the very real possibility of lawsuit confident he can survive in the end without financial penalty, and in the case of CRI he succeeded by the narrowest of margins. But he has not escaped the verdict of the court regarding his truthfulness, ethics, and journalistic practices. Two out of four judges believed there was a probability we could provide clear and convincing evidence of actual malice, and all four concluded that “plaintiffs [CRI] have shown by a preponderance of the evidence that Alnor’s statements were false.”

Alnor’s proclamation of victory thus rings hollow. How much satisfaction can he reasonably take in the fact that, while all four judges concurred that he defamed Hank and two concluded that he did so deliberately, the other two (who happened to constitute a majority on the appellate court) were not absolutely convinced that he defamed Hank deliberately but allowed for the possibility that he rather did so out of sheer journalistic unprofessionalism? Again, even the two judges who handed Alnor his insignificant victory provided significant vindication to CRI, thus making it unnecessary for CRI to take its case against Alnor to the next level.

Alnor’s claim that “CRI to pay up to a quarter million dollars to Alnor’s legal team” is posted to this day on apologetics/discernment ministry Web sites that share his animus toward CRI,[19] but it is totally false. To be fair, Alnor thought at one point that it would be true. In fact, he seemed to take particular delight in the prospect of CRI paying such a large sum to the ACLU. He trumpeted that this payment would come “out of CRI’s contributors’ donations, money that donors thought they were giving to God.”[20] He elaborated further on this in a February 5, 2008 post to the apologetics e-mail list, AR-Talk: “We went to court to force CRI to pay more than $250,000 in legal fees. The court already ruled that CRI must pick up my legal fees. We expect a ruling on the amount soon, then we are going to aggressively go after Mr. Hanegraaff and CRI, both personally and corporately.”

Alnor’s attempt to extort funds from CRI was denied by the trial court and denied again on appeal. In fact, the same appellate court that granted his anti-SLAPP motion had some unusually harsh words for Alnor’s exorbitant request and his “padded” legal fees.[21] In the final settlement CRI was not required to pay any money in any capacity to Alnor or any of his lawyers, including the ACLU.

Now that the question of legal fees has been settled (albeit not to his liking), we await Alnor’s promised next round of personal and corporate attacks against Hank and CRI.