Defendants in the aborted federal criminal trial for insurance fraud believe that their prosecution was not justified. After a mistrial was declared on February 9 because the panel of jurors dropped below 12, Gloria Keraga and Richard Seward, psychologist Judith Peterson, therapist Sylvia Davis, and hospital administrator George Jerry Mueck brought lawsuits totaling more than $3 million against the government. They filed under a 1977 law that allows criminal defendants who prevail in federal court to collect fees if the prosecution is deemed "vexatious, frivolous or in bad faith."
The defendants, who all worked at the former Spring Shadows Glen Hospital, were charged with using mind control techniques to keep patients in the hospital so that they could collect insurance monies. The government alleged that the insurance scheme involved knowingly misdiagnosing patients with multiple personality disorder and implanting memories of satanic abuse.
The defendants, however, claim that their treatment of the patients was appropriate. They argue that the patients had already been diagnosed with these conditions before they came to Spring Shadows Glen hospital.
Defendant Gloria Keraga said "I don’t know if it is a world wide conspiracy of satanism. But what does matter is that these individuals came to us with a lot of pain, a lot of suffering, and spoke about specific aberrant events they suffered through." She also said, "I will never know the whole truth. I do know that a lot of awful things happened to these people long before therapists at Spring Shadows Glen ever saw them."
Judith Peterson noted that "The government tried to be the ‘big brother’ to the mental health field while really not knowing one thing about the field."
In commenting about the former patients who testified against her in the trial, Peterson said, "It is much easier for these patients to think that nothing happened to them, and they did nothing to anyone else, than it is to deal with the shame and guilt of true victimization."
Peterson said, "I had deep pockets and became a cottage industry for a group of former patients and civil attorneys," and that she was a target of the False Memory Syndrome Foundation.
Peterson explained that her treatment was based on "psychological reality." "We are not detectives, reporters or investigators attempting to corroborate outside evidence."
Based on Houston Chronicle articles by Mark Smith, "Defendants want fees paid by government: Five sued over treatment seek $3 million," March 31, 1999 and "Defendants free, but not cleared, in cult-memories trial: Psychotherapists still say patients were abused," April 3, 1999.