Were Swami Chetanananda’s followers merely "cash cows" milked by guru?

Former disciples offer insider’s look at guru’s finances, largely based upon loans and gifts from his devotees

September 1, 2005
By Rick Ross

Hone Ames says the swami once asked her for money to invest in a condo-conversion scheme in New Jersey. Hardly, anything spiritual about that, but she nevertheless found it difficult if not impossible to refuse the guru who had become her "link to God."

Ames told The Oregonian that she remains traumatized by both her financial losses and psychological pain caused by Swami Chetanananda the leader of the "Nityananda Institute," her controversial mentor known in Indiana as J. Michael Shoemaker.

Swami Shoemaker now lives with his followers in a pricey refurbished manor in Northeast Portland.

The guru repeatedly refused interview requests from The Oregonian concerning allegations made by his former followers. Instead, he sent a terse typed statement that said, "I have never coerced anyone, period," which interestingly did not respond directly to the subject of loans, gifts or investments from his past devotees.

Ames ultimately gave the guru $250,000 for his New Jersey condo deal. An initial investment was deposited in a joint account the swami controlled with one of his assistants. The wire transfer of funds was under his original given name, J. Michael Shoemaker.

Ames shared with The Oregonian relevant documentation about all the money she gave Shoemaker from 1988 to 1997.

On November 16, 1989 Ames deposited $62,500 into Shoemaker’s joint account and the swami wrote a check that same day to cover his investment.

"People are concerned about teachers because they're afraid they're going to get ripped off. There's no avoiding getting ripped off to some extent in this life." -- Chetanananda January 24, 1988

Former followers of Chetanananda have given the guru many gifts, such as artwork, camera equipment, first-class airline tickets and luxury hotel accommodations in Hawaii.

In 1999 one devotee Norman Bodek signed over his Portland house to the Nityananda Institute as a charitable contribution. Bodek has since left the group.

A corporation called "Productivity Inc." provided the guru with a monthly income.

Ames largely relied upon an inheritance from her grandmother to provide Chetanananda with money. She reportedly saw him as a "Christ-like figure," despite his constant requests for cash.

Ames first invested $100,000 in a commodity scheme hatched by Shoemaker in April 1988.

"I'll move to Portland. I'll either have enough people in that building to support it, or I'll go fly-fishing." -- Chetanananda December 1992

In 1993 Ames gave the Nityananda Institute $500,000 to build a meditation hall, but this time she loaned the money for a period of three years with 6% interest.

The guru bought a historic big brick building in Portland once called Laurelhurst Manor, which was formerly a rest home. Real estate records show $840,000 was borrowed toward the $1.2 million purchase price of the house. The group also bought about a dozen other houses in the Portland neighborhood.

The big brick building at 1021 N.E. 33rd Ave. built in 1910 required substantial renovations.

"As a swami, of course, I don't have the usual signposts in life that tell me I'm a success or a failure. For instance, when you're a swami, you don't get a salary." -- Chetanananda January 2, 1993

Ames moved into the Portland building later during 1993. It was remodeled somewhat lavishly; largely through the use of the money she provided and renamed the "Rudrananda Ashram." Ames recalled that fresh flowers were flown in from California and empty French wine bottles could also be seen flowing from the Shoemaker’s private suite.

Ames says that in April 1994, Chetanananda/Shoemaker called her into his suite and told her that all her money was gone from the condo investment. Actually the company involved had filed for Chapter 11 bankruptcy three years before that meeting. When she asked the swami for documentation the guru got angry and picked up a chair threateningly she told The Oregonian.

The swami then told Ames to talk it over with his brother, attorney John Robert "Bob" Shoemaker, another one of his disciples. She got a terse memo stating, "As you know the partnership never listed you as a partner. The investment was made in Swamiji's name, and his taxpayer I.D. number was used."

"Egotism, . . . the fundamental sickness of human beings, is what people come here to be cured of. And you know, I run a hospital. I live here 24 hours a day, seven days a week. I'm on call for the last 25 years. This is not a benefit to me. It is a benefit to you." -- Chetanananda January or February 1996

On March 8, 1996 Ames signed a one-year extension of her loan to the Nityananda Institute.

"I probably try to do too much already, managing this place, carrying on my head the debt load that it represents. I don't know if any of you have been $2.5 million in debt before. All of you who have money pressures on you know what that's like. Well, magnify it a bunch." -- Chetanananda April 2, 1996

April 2, 1996 the Martha's Vineyard house in Massachusetts where Chetanananda once held retreats burned to the ground. The Fire department reported that the cause was "undetermined."

It was certainly easier to sell the property vacant without the house. And an insurance company paid out several hundred thousand dollars for the loss. This provided a much needed and convenient infusion of cash for the group, which promptly bought more property in Portland.

"The love and devotion we display toward a teacher is a crucial part of the transformation process." -- Chetanananda, in his book, "Choose to be Happy," Rudra Press, 1996

Ames personal breaking point came in January of 1997 when the guru yelled at her for missing a kitchen chore. At that time the years of accumulated doubts regarding his frequent temper tantrums, false predictions, failed investment schemes, insults and repeated put-downs, not to mention sexual encounters, finally caused Ames to reconsider his "Christ-like" status.

"There is one thing I want to make really clearly, and that is I am a liberated soul…I think it may not be possible for a liberated soul to live in the company of human beings." -- Chetanananda, on Aug. 12, 1997

The Portland ashram's mortgage was ceremoniously burned in July 1997. Chetanananda thanked disciple Kerry Ernest Smith for donating $1.7 million to pay off that loan.

But the portly guru from Indiana still faced repayment of Ames’ loan of $500,000 plus interest.

To further complicate the group’s finances former member Melinda Mandell was suing Chetanananda and his institute. Court records show that Mandell claimed misrepresentation, intentional infliction of emotional distress, breach of contract and racketeering. The suit asked for more than $4 million in damages.

Mandell said that the institute was not really a non-profit church, but rather a for-profit business that benefited the guru and his inner circle. Lawyers for the swami refuted her claims, but a confidential settlement eventually came in 1999.

During the litigation and thereafter the Nityananda Institute began requiring its members to sign a release forms that stated, "I accept that I am fully responsible for myself and my life…including my own actions, behavior, thoughts, financial status, health, relationships, and any other condition."

By August of 1997 the guru had arranged for a bank loan to pay off the $500,000 from Ames had and negotiated interest payments.

"If you're the person who's (expletive) judging what work you're going to do all the damn time, what do you need a teacher for?…I am constantly meeting people who are sitting in judgment of what I am communicating to them. You can't believe how frustrating it is for me to see people who think they're better than me." -- Chetanananda August 28, 1997

Ames says she moved out during December of 1997. As she left the woman who had helped her guru so much recalled that she didn’t even receive an acknowledgement or a goodbye.

"I bust my guts out for people who mostly wonder, you know, 'What in the hell happened?' and 'What's that son of a bitch trying to get from me anyway?' Well, the truth of the matter is, I'm after your money. Or, I could be after your bodies. -- Chetanananda February 1998

In the fall of 1998 Martha's Vineyard Land Bank commissioners approved the purchase of the swami’s old property in Massachusetts for $1.2 million. Through this transaction the Nityananda Institute gained some much-needed money and Ames got her interest payments.

But earlier that spring the swami was less than sanguine and let loose with what appears to be another temper tantrum. He told Ames in a letter, "You are a cowardly, vengeful, venomous witch...I do not sexually abuse women…I have never cheated you in business…If you don't stop these slanderous lies and harassment of members of our community, I will sue you…I will make the process as ugly and expensive as humanly possible."

Note: This report was based upon an article titled "In the Grip of the Guru (part three) "The high price of enlightenment" by Richard Read published by the Oregonian July 17, 2001