seth joseph
brian haney
SEC
info@digl-watch.com
"About midday, Bryan came to my office and asked me to leave the building to take a walk with him. We left the building and walked for about 40 minutes. He told me that he could not terminate Denise without greatly damaging his standing in the Church of Scientology because Denise is the sister of the Chairman of the Board of the Church, Mr. Miscavige. Bryan has devoted many years to the church and values his standing in the church. The sister of the Chairman had to be protected according to Bryan."

~ Personal Notes of Seth Joseph
Digital Lightwave, Inc. vs Seth P. Joseph
Pinellas County, FL Case #01-9010CI
Arbitration Award
 

In this December 2001 ruling, the American Arbitration Association awards former Digital Lightwave senior VP Seth Joseph $3,896,487 for damages and lost stock options that resulted from company founder Bryan Zwan's decision to fire him after Joseph protested what he saw as fraudulent inventory filings.

The arbitrators found that Digital Lightwave "retaliated against Joseph because of his objection to or refusal to participate in the inventory fraud," an offence under Florida's Private Sector Whistle Blower Act.

One of the reasons behind the ruling, as explained within, was the difference between how Joseph's termination was handled as compared to that of Denise Miscavige Licciardi, who was permitted to keep her options, and left with a generous settlement package.

Motion to Vacate or Modify Arbitration Award
  In this motion from Digital Lightwave, the company argues that the Arbitration Award should be vacated due to "the Arbitrator's abuse of discretion, improper conduct and manifest errors," and also complains that, among other injustices, the Arbitrator himself was biased against Digital.
Reply to Digital's Motion to Vacate or Modify Arbitration Award
  Seth Joseph fires back at Digital in his reply to the motion to vacate, and claims that in fact, the amount of the award should be slightly higher due to incorrect figures that were used in calculation in the original ruling.
Personal Notes of Seth Joseph  ++  Text version
 

In these notes, written by Joseph himself immediately following the events that led to his abrupt dismissal from Digital Lighwave, he recalls the day that he first learned about Digital employee Chuck Anderson's "Knowledge Report" on Denise Miscavige Licciardi, as well as his discussions with other executives, including Bryan Zwan, about serious transgressions that Anderson alleged had been committed by Digital VP Denise Miscavige Licciardi.

Joseph also gives more details about the inventory fraud claimed by Anderson's report, but the bulk of the notes refer to the Digital atmosphere post-Anderson revelations, as well as the seemingly inexplicable behaviour of company CEO Bryan Zwan.

Joseph also details the tension and fear of retaliation that was experienced by both himself, and the rest of the finance staff, noting that "people had been so threatening in the office."

He also describes Zwan's about face on Denise Miscavige Licciardi's future with Digital, noting that at first, Zwan had agreed that she had to be terminated immediately, but after a late afternoon appointment in Clearwater, he revealed that to fire Ms. Licciardi would greatly damage his standing within the Church of Scientology, as she is the sister of the Church's ecclesiastical leader David Miscavige.

Knowledge Report of Chuck Anderson - Subject: Denise Licciardi  ++  Text version
  Part Scientologese, part cry from the heart, this Knowledge Report prepared by Digital technical Chuck Anderson on the unprofessional and possibly criminal activities of Digital Vice President Denise Miscavige Licciardi caused shockwaves throughout the senior management of Digital Lightwave when its contents became known to non-Scientologists Joseph and Dr. Steven Grant.

Although the Report itself was initially submitted directly to company founder Dr. Bryan Zwan, when Joseph attempted to get a copy of it himself the next day, Zwan told him that he'd given the only copy back to Anderson. Joseph called Anderson to try to retrieve the document, only to be told by its author that he had destroyed the only hard copy and deleted the file from his hard drive.
When Joseph offered to send over a technician to recover the file from his computer, Anderson refused.

NOTE: DENISE LICCIARDI REPLIES THROUGHOUT THIS DOCUMENT, BUT THERE IS NO VISUAL INDICATION OF WHICH WORDS ARE HERS AND WHICH ARE CHUCK'S. WE HAVE ATTEMPTED TO INDICATE DENISE'S COMMENTS WITH RED, ITALICIZED TEXT. HOWEVER, ERRORS ARE POSSIBLE.
Memo to Bryan Zwan from Denise Licciardi  ++  Text version
 

In a memorandum loaded with Scientology lingo, quotes from L. Ron Hubbard and -- of course -- Machiavellian office politics, Denise Miscavige Licciardi launches a full scale attack on the character, morals and motives of her then-colleague Seth Joseph. Directing her "concerns" at then CEO Dr. Bryan Zwan, also a Scientologist, she accused Joseph of lying, backstabbing and laziness, concluding her letter with a none-too-veiled suggestion that Joseph is, in actuality, a "Suppressive Person," Hubbard's term for an antisocial enemy/troublemaker, and notes, "One cannot really argue with Ron [Hubbard]."

Excerpt of Steven Grant testimony  ++  Text version
  In this testimony, which was part of the original Joseph arbitration case, former CFO Dr. Steven Grant gives his perspective on the events that followed the company's discovery of the fraud, as well as his initial confrontation of Denise Miscavige Licciardi over the allegations made in the now infamous KR.

He describes the atmosphere following the blowup over the inventory misstatement as "tense" and notes, "I was clearly in fear of my safety for myself, my family, my fellow colleagues in the finance area and clearly the Josephs."

When asked why, he replies:

"Well, I think there were really two elements, one was there were some very, very angry shareholders and now there were some very, very angry Scientologists."
Steven Grant Letter  ++  Text version
  In this confidential letter to attorney John Hentrich, Dr. Steven Grant explains in greater detail why he believed the inventory misstatement was grounds for termination of Denise Miscavige Licciardi, and also hints at the possibility that Liccardi and her husband, Sam, may have profitted from insider knowledge by selling Digital shares before the correction was filed with the SEC.
Assorted Denise Licciardi Emails  ++  Text version (text version incomplete)
 

"We need to get Bryan on this line and stop this investigation without his authority NOW," writes Denise Miscavige Licciardi in one of several sharply worded emails to Jerry Gentile, one of her closest confidantes within the Digital management team, to whom she refers affectionately later in the email as "baby" while assuring him, "I'm one of the good guys."

As Denise schemes on how to uncover the "mole" who has been tattling about her questionable inventory accounting system, she's also plotting her defence -- including her plan to contact a good lawyer, recommended to her by fellow Scientologist and well-known legal commentator Greta Van Susteren:

"Greta has spoken to her about this ... She says we should say we are friends of Greta Van Susterens."

Denise Licciardi email to Bryan Zwan  ++  Text version
 

It's all over but the crying for Denise Miscavige Licciardi's days at Digital Lightwave, but from this letter, it's clear she's not willing to go down without a fight. In an impassioned plea that veers from embittered to resigned from one sentence to the next, Denise reminds Zwan that she has "been an excellent Exec" and has "applied Simon Bolivar to a T."

She notes that he is in a position to give her the resignation package she has requested, including a cash payment equal to three years salary, complete debt forgiveness for both herself and her husband, and all vested stock options.
She also demands something else -- and she calls it 'personal integrity and leaving with my dignity':

"I want a statement from the company that exonerates me from any wrongdoing and states that you will not issue any press release or statements to the press that mention me or my leaving."

Denise Licciardi Terms of Separation
 

Denise Miscavige Licciardi demanded three years salary, her business cellphone, her home laptop, stock options and her dignity in exchange for leaving Digital Lightwave without a fight. From this separation agreement, it looks like she got nearly everything she wanted -- at least, until June, 1998.

Then came this tersely worded letter from the company -- cc'ed to notorious Scientologist lawyer and husband to Greta Van Susteren John Coale, who was apparently acting as Licciardi's counsel in her dealings with her former employer.

The letter, dated June 5, 1998 -- a mere five months after her departure from Digital Lightwave -- cancels the bulk of the payments Licciardi was to receive over the next eighteen months, takes away her remaining unvested stock options and calls on her to return all "company property."

Digital Lightwave Organizational Chart
 

This Digital Lightwave organizational chart, apparently circa mid-1997, was submitted as part of the evidence in Seth Joseph's wrongful termination suit against the company. The most interesting feature about this chart is the remarkable similarity between Digital Lightwave's structure and the Church of Scientology's "Org Board", which is used throughout the church's labyrinthine family of corporations as well as within companies run according to Scientology "administration technology".

To aid in comparing the two, a generic Scientology org chart is presented alongside the Digital Lightwave org chart. Notice the similarities in the names of company "divisions", as well as the responsibilities. Also, at the bottom of the Digital Lightwave chart are descriptions of each division's "stat" and "Valuable Final Product" - both Scientology terms explained on this official page on the Church's administration technology.

 
 
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