Hoffman convicted of bankruptcy fraud

Spiritualist's lawyer says she'll appeal

The Dallas Morning News/November 23, 1993
By Pete Stover

After years of answering charges that she led a Dallas cult, spiritualist Terri Hoffman was convicted Tuesday on unrelated allegations of bankruptcy fraud.

A federal jury convicted Mrs. Hoffman of 10 counts and acquitted her of two in a document-laden white-collar prosecution case that touched only tangentially on the more lurid side of her story.

Mrs. Hoffman, 55, left the courthouse without comment, allowed to remain free until her Jan. 14 sentencing. She faces up to five years in prison and a $ 250,000 fine on each count.

"We believe prison time is appropriate," said Assistant u.S. Attorney Larry Jarrett, the lead prosecutor.

He portrayed Mrs. Hoffman as a schemer who connived to hide a slush fund of assets during bankruptcy.

Defense lawyer Shirley Baccus-Lobel, who had portrayed her client as sometimes addled but earnest, said there will be an appeal but declined to discuss the grounds.

She said she will ask u.S. District Judge Sidney Fitzwater for no prison time, based on what she described as the "petty" nature of Mrs. Hoffman's offenses and the small amount of money involved.

After a one-week trial and five hours of jury deliberation, Mrs. Hoffman was convicted on three counts of failing to report four credit card accounts and three counts of failing to report a $ 1,900 payment on one of those cards.

She was found guilty of two counts of failing to report an agreement to pay her lawyer, Fred Time, 15 percent of any book or movie deals. She also was convicted on two counts of failing to disclose that she had power of attorney to control her boyfriend's bank accounts.

Mrs. Hoffman was acquitted on counts that alleged she hid a contract for attorney services with Mr. Time and that she initially failed to disclose the sale of 13 Audubon prints for $ 65,000.

A juror said afterward that the panel went through each count and decided not to hold Mrs. Hoffman responsible for any matter that she disclosed to her attorney.

The consensus, the juror said, was that Mrs. Hoffman made a calculated effort to conceal her assets.

"We thought it was very premeditated," said Natalie Mariner, an account representative for a Dallas communications company.

Ms. Mariner said jurors looked at the overall picture on the documents that Mrs. Hoffman filed in bankruptcy, including portions not mentioned in the indictments.

"She would mention every little thing she had, but she didn't remember acres and acres of property," the juror said.

The not-guilty verdicts on two counts were because the lawyer's contract was too distant in time from the bankruptcy and because Mrs. Hoffman voluntarily disclosed the sale of the paintings, the juror said.

The jury was intrigued by witnesses' glancing references to the cult allegations against Mrs. Hoffman, Ms. Mariner said, but the panel had no idea what they meant.

"If something like that would come up, we would say it had nothing to do with the bankruptcy case," she said.

Ms. Baccus-Lobel declined to repeat her earlier suggestions that the government was on a witch hunt, stirred up by families who have accused Mrs. Hoffman of cult-like activities and mind control.

The trustee in her October 1991 bankruptcy testified that she passed along those families' concerns about hidden Hoffman assets to the FBI.

The Hoffman adversaries accuse her of cultivating an obsessively devoted clientele, drawn in by her teachings of auras, supernatural worlds and new age mysticism. They have filed lawsuits accusing Mrs. Hoffman of causing and benefiting from the 10 who committed suicide or suffered untimely deaths after willing or giving property to their teacher.

Before the federal case began, state authorities investigated the mind-control allegations but declined to file charges.

Federal prosecutor Bob Webster scoffed at the notion that the government used an "Al Capone" approach on Mrs. Hoffman, so named for the infamous gangster of the Prohibition era who stymied mob investigators but was convicted of federal tax evasion.

"Mrs. Hoffman has been toying with the bankruptcy court and its trustees for over two years," he said. "It took a jury verdict on 10 felony counts to put an end to the lying, the cheating, the deceiving and the concealing."

Nonetheless, the case was described in terms beyond simple bankruptcy by one couple who accused Mrs. Hoffman of cult leadership.

"It shows that she is not God, that she can be touched by the laws of the land," said Gail Cleaver, whose husband's daughter and ex-wife are among the 10 dead associated with Mrs. Hoffman.

Testimony at the trial suggested Mrs. Hoffman is an emotional wreck from four years of legal troubles and bad publicity, which began after Glenda and David Goodman, two close associates, were found shot to death in their locked home in late 1989 after giving her more than $ 100,000.

Her counseling business has dwindled in Dallas, leaving her to work a customer base in Chicago.