A fight over leadership has erupted within the self-actualization group Harmony Institute. On Friday, a group of Harmony graduates filed suit in 3rd District Court against founders Hans and Sally Berger, contending the Bergers stole institute money and defrauded former trainees.
Current owners Pamela and Steve Juback and other Harmony graduates had the locks changed on the center's South Salt Lake headquarters over the weekend and are holding a meeting tonight to discuss the organization's future. At issue is whether Hans Berger can continue as Harmony's leader or whether a committee of graduates will operate the program.
The lawsuit contends that over the past three years the Bergers skimmed $620,000 from participants' fees and that they formed multiple corporations to insulate themselves from the acts. The suit says the Bergers used a double set of accounting books -- a true set that showed all payments, including cash payments, and a "final" ledger that showed only payments made by check or credit card.
The suit also says Berger used his position of trust to persuade two former "students" to take out more than $400,000 in bank loans and give the money to him.
The plaintiffs, James Michael Cordell, Brett Harward and Harmony Institute, name as defendants the Bergers and their companies, Light Training, Quest Development and Cambridge Associates.
Hans Berger denied the allegations Tuesday.
"I assure you that when I get the chance, I will be able to show that there have been no inappropriate dealings," he said.
The South Salt Lake Police Department and the Internal Revenue Service have looked into Berger's business practices, according to the police department and court documents, but he has never been charged criminally.
The lawsuit, however, reads much like an indictment, accusing Berger of bank fraud, money laundering and racketeering.
"We are trying to get back property and assets taken from the plaintiffs," attorney Stephen Waldron said Tuesday. He said the Jubacks changed the locks to preserve business assets and keep Berger and his employees out.
Also on Tuesday, 3rd District Judge Roger Livingston signed a temporary restraining order preventing Berger from transferring, disposing of or concealing his assets or interfering with ongoing training sessions at the institute.
The suit says Berger persuaded Cordell -- a former student and, until recently, president of Harmony Institute -- to procure a bank loan for $350,000 so Berger could buy a parcel of wilderness property to relocate one of Harmony's programs.
But Berger also solicited $57,000 from Harward, another Harmony participant, to buy the same land, the lawsuit says, and has not repaid either man.
Berger has been in the self-awareness business since 1985, and his programs have attracted thousands of participants. Harmony was incorporated in February 1997, with Scott Giles as its sole shareholder and Berger as general manager. The Jubacks acquired the company a year later.
Initially, Harmony conducted its own training sessions and directly employed trainers. By the end of 1997, Berger had formed Light Training to provide trainers to Harmony. Berger subsequently formed Quest Development to hold property in Summit County and Cambridge Associates to contract for special training sessions tailored for business and professional employees, the lawsuit says.
Last spring, The Church of Jesus Christ of Latter-day Saints issued a statement saying the church does not endorse "commercial enterprises promising heightened self-esteem, improved family relationships, increased spirituality and the like." Although the statement did not mention Harmony by name, many observers speculated it was one target because about 50 percent of its participants were Mormons.
A memo circulating among Harmony graduates acknowledges that Harmony's "trainings have gone down extreme and unusual spiritual paths" and that trainers have "taken steps that anger the predominant Utah faith."
As a result, the memo said, the number of Harmony enrollees has dropped because some graduates "cannot bear to abandon their faith for their training."