"You can and should give me the package I requested. It might take courage
to just tell them your doing it-but it doesn't take anymore courage to do
that than it has for you to take me out as you have done. "

~ Denise Licciardi email to Bryan Zwan (after learning she'd be terminated)
The History of Digital Lightwave
1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002

Digital Lightwave, Inc. is incorporated in California.

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Bryan Zwan founds Digital Lightwave to develop optical network information products.

Scientologist Ken "Ted" Myers joins Digital Lightwave as Engineering and Design Manager.

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Bryan Zwan and a Scientology representative named "Charmaine" meet with fellow Scientologist Brian Haney in the Columbus, OH offices of the Church. Haney agrees to donate $100,000 to the Church's Super Power Expansion Project in Clearwater, Florida, and invest $5 million in Digital Lightwave for a 50% interest in the company. Haney later visits Digital Lightwave's offices in Santa Monica, CA.

Haney and Zwan sign a Stock Purchase Agreement, in which Haney is to
receive 4900 shares of common stock for $2 million and a $3 million line of credit, giving Haney 49% of the company.

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January - March
Digital Lightwave relocates to the (Scientology) technology hotbed of
Clearwater, Florida.

Bryan Zwan and Brian Haney execute a new stock purchase agreement, in which Haney receives 4900 shares for $500,000, and a $1.5 million loan to Logical Magic, Inc., another company owned by Zwan. Haney is elected to Digital Lightwave's board of directors.

Al G. Zwan, Bryan's brother, is appointed Chief Financial Officer and Vice President of Operations. (He is replaced at some later point, prior to the company's initial SEC filing for registration as a public company.)

Elizabeth "Libby" Weigand, convicted felon and longtime Scientologist, joins Digital Lightwave as the company's Executive Vice President for Operations.

Haney travels to Clearwater, and both he and Zwan visit Flag Land Base (FLB), the Clearwater headquarters of the Church of Scientology. (Haney's lawsuit states that in the presence of the FLB President, Zwan told Haney that Haney must "disconnect" from his wife, who had been expelled from the Church; otherwise, Zwan could not have further business dealings with him. Haney refused.)

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Brian Haney requests a review of Digital Lightwave's finances, but is denied by Bryan Zwan, purportedly because Haney has not disconnected from his wife, who is still out of favor with the Church of Scientology. Haney is allegedly told by Zwan that Haney cannot remain a shareholder of the company if he refuses to divorce his wife.

Haney agrees to allow Zwan to repurchase Haney's shares in the company.
Digital sales manager Doug Weigand dies after a one-car accident in Digital Lightwave's parking lot.

March - July
A number of investors, including several Scientologists, are granted options to purchase shares of Digital Lightwave in the event that the company makes an Initial Public Offering. (Haney is not informed of the plans for an IPO.)

Scientologist Eric Mitchell joins Digital Lightwave as Vice-President for Sales. Non-Scientologist Tom Williams also signs on as the company's Vice President for Manufacturing.

The repurchase agreement is exercised, and Haney resigns from board of directors.
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Beth A. Morris joins Digital Lightwave as Chief Financial Officer.

Digital Lightwave begins shipping its first product, the ASA 312 Network
Information Computer.

The company is re-incorporated in Delaware.
Scientologist Doug Dohring is named as Digital's new president. His fellow Scientologist Robert Goransson joins the company as Quality Assurance Manager.

Ken "Ted" Myers is appointed Vice-President for Advanced Products
Scientologist Daniel Lorch joins Digital Lightwave as Vice President for Customer Development.

Denise Miscavige Licciardi, the sister of Church of Scientology Chairman of the Board and senior ecclesiastical official David Miscavige, joins Digital Lightwave as Vice President for Administration.

Seth Joseph also signs on as Senior Vice President.

Doug Dohring leaves Digital Lightwave.
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Libby Weigand's name disappears from Digital Lightwave's amended S1 registration filing.

Digital Lightwave launches its Initial Public Offering.

May 9 - Denise Miscavige Licciardi sends a memo to Digital Lightwave CEO Bryan Zwan savaging Digital's Chief Finance Officer Seth Joseph, accusing him of lying about problems within the company and insinuating that Joseph is to blame for the departures of Doug Dohring and Libby Weigand, "two OTs."

Brian Haney finds out about Digital Lightwave's IPO after reading a discussion about the company on the alt.religion.scientology newsgroup.

Steven Grant takes over as Chief Financial Officer of Digital Lightwave, replacing Beth A. Morris.

October - November
Ken "Ted" Myers sells all of his shares in Digital Lightwave (25,100) at prices of between $18 and $20 a share.

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January 2 - Steven Grant does an informal ad-hoc inspection of the Digital Lightwave production facility and finds no work in progress, but boxes and other raw materials in disarray.

January 5 - Digital Lightwave conducts an inventory count in the presence of auditors from Coopers and Lybrand.

January 6 - Denise Miscavige Licciardi and Jerry Gentile demand that 308 "completed" units that had been counted during the previous day's inventory be returned to Manufacturing for "final testing".

January 12 - Chuck Anderson writes his now infamous Knowledge Report memo, which alleges, among other things, that Digital VP Denise Miscavige Licciardi used an unorthodox inventory stocking method that counted unfinished units -- some little more than raw materials in boxes -- as finished products.

January 20 - Steven Grant sends his assistants, Mary Ward and Michael Tinsley, to the Digital production facility to find the "defective" Q1 boards that would be isolated from the completed units for inventory purposes. In the course of her investigation, Ward discovers that 23 units are missing. Later in the day, Denise Miscavige Licciardi calls Grant to complain about Ward's presence at the manufacturing facility.

January 21 - According to broker reports received by Steven Grant, Denise Miscavige Licciardi and her husband, Sam, sell off some of their Digital Lightwave stock.

January 22 - The Digital Lightwave finance staff work throughout the day to resolve the financial impact of the inventory restatement, but are still left with 23 "missing" units, which gives rise to more questions about just what was in the boxes during the inventory count.

Steve Grant confronts Denise Miscavige Licciardi about the "missing" and incomplete units, in the presence of Dr. Bryan Zwan, and she eventually admits that "at least" 23 of the boxes had component parts in them, and not completed units. Digital Lightwave calls for a temporary halt in trading pending the release of the income restatement, which occurs later that day.

January 23 - Digital stock plummets from $12 to under $5 a share.

January 25 - Seth Joseph, Michael Tinsley, Steven Grant and Bryan Zwan hold an emergency meeting to discuss the "inventory coverup" discovered by Tinsley and Grant. During the course of the meeting, Zwan calls on Scientologist staffer Chris Gurney to bring him a copy of Chuck Anderson's Knowledge Report.

According to Seth Joseph's notes, after the meeting, he learned that Digital Lightwave staffer Kay Meyers had informed Michael Tinsley that not only Denise Miscavige Licciardi, but also Bryan Zwan had informed her of how "questionable sales" were to be billed.

Later that evening, Grant sends a confidential memo to the attorney for the Digital Lightwave special committee investigating the restatement of earnings, calling for the immediate termination of Denise Miscavige Licciardi and Jerry Gentile.

January 26 - In a phone conversation with Jackie Joseph, Bryan Zwan's wife, June, reveals that both she and her husband have read Chuck Anderson's Knowledge Report, which, she says, details "a long series of illegal and unethical actions" committed by Denise Miscavige Licciardi during her term at Digital Lightwave.

Digital CEO Bryan Zwan meets with Denise Miscavige Licciardi. Although he is "trying to terminate her", according to Steve Grant's recollections of that day, he is unsuccessful.

Later that day, Bryan Zwan tells Seth Joseph that he cannot terminate Denise Miscavige Liccardi because it would greatly damage his standing in the Church of Scientology. Joseph tells Zwan that he will not participate in a cover up of the inventory problem.

In the afternoon, Joseph has a conversation with Jeff Marshall, an outside director of the company, who insists that the employee responsible for the fraud must be terminated.

Steven Grant also meets with Tom Williams, who tells him that similar packing irregularities, using raw materials and component parts to fill boxes of "finished" units, had occured in the second and third quarters.

The resulting tension produces veiled hostility from Scientologists in the office towards non-Scientologists, particularly those in the finance division. At the end of the day, Grant brings home pictures of his family from his office at Digital Lightwave so that the Scientologists don't see them.

On his arrival home that evening, Joseph discusses the problem with John Hentrich, counsel to the special committee of the Board of Directors investigating the inventory discrepancy, and asks for protection for himself and other staffers under Florida's whistleblower legislation due to the "threatening nature" of people at the office that day. Later in the evening, he speaks with the Board, and reveals to them the details of the fraud that has been uncovered.

January 27 - Seth Joseph tries, unsuccessfully, to get a copy of the Knowledge Report from Bryan Zwan, who claims that he has given the document back to its author, Chuck Anderson, to "do whatever he wants to do with it." Joseph reminds Zwan, who complains that "they're getting me in trouble again", that he is obliged to follow the rules of the United States, not the dictates of his church.

An increasingly upset Seth Joseph contacts Anderson to ask him for another copy of the report, but Anderson refuses, claiming that he has destroyed the file and deleted it from his computer.

Later that day, Joseph confronts Zwan, in a meeting also attended by Michael Tinsley and Steven Grant, and accuses Anderson of destroying evidence. He also tells Zwan about what he has learned about inventory fraud in the previous two quarters, and suggests the matter be investigated immediately. Steven Grant advises Zwan to "stop letting the Church influence the way he was running the company."

Meanwhile, Denise Miscavige Licciardi and Jerry Gentile conspire via email over Seth Joseph's investigation. Denise also seeks advice on hiring a lawyer from Scientologist and noted legal affairs commentator Greta Van Susteren.

At the end of the day, Denise sends an email to Bryan Zwan recommending that he put a stop to investigations underway by Steve Grant and Seth Joseph.

That evening, in a special committee meeting in which he participates in by telephone from his home in St. Petersburg, Steven Grant tells the board that Denise Miscavige Licciardi had expressly admitted to filling boxes with raw materials and component parts.

January 29 - Seth Joseph is terminated.

February 8 - In a memo to Bryan Zwan, an embattled Denise Miscavige Licciardi lists her demands for parting compensation that she requires in order to resign from her position at Digital Lightwave.

February 11 - Denise Miscavige Licciardi resigns, and receives nearly all of the compensation she demanded from Bryan Zwan, according to the final separation agreement.

February 12 - A class action suit against Digital Lightwave is launched by angry shareholders.

June 5 - Denise Miscavige Licciardi's generous separation package is cancelled abruptly by this letter from Digital Lightwave's lawyers.

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January 4 - Bryan Zwan resigns as CEO of Digital Lightwave, but remains on the Board of Directors. He is replaced by Gerry Chastelet.

July 6 - Bryan Zwan resigns as Chairman of the Board of Directors of Digital Lightwave, with Gerry Chastelet taking over the position.

October 14 - Zwan enters into a "Memorandum of Understanding" with the company (included in the quarterly report of Nov. 15, 1999) in which he agrees, among other things, to: - formally retract "statements contained in his letters dated September 16, 1999 and September 20, 1999". - not try to remove senior management or board members from the company.
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In a story that appears in the St. Petersburg times, Digital CEO Gerry Chastelet insists, "Digital Lightwave is not a Scientology company."

March 29 - The Securities and Exchanges Commission sues Bryan Zwan and Digital Lightwave for "financial fraud". On the same day, the SEC announces settled administrative proceedings against Steven Grant and Beth Morris for related misrepresentations.

August 22, 2000 - Bryan Zwan resigns from the Digital Board of Directors.

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December 7 - The SEC issues a news release stating that the suit against Bryan Zwan for "financial fraud" has been settled, with Zwan paying a $10,000 penalty.  

December 20 - The Arbitrator in Seth Joseph's wrongful dismissal case finds in Joseph's favour, and orders Digital to pay more than $3 million in damages. Digital appeals the decision.
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January 23 - Digital Lightwave announces that Bryan Zwan has been reinstalled as chairman, president and CEO of the company, exactly four years to the day after the initial earning misstatement that led to the termination of Seth Joseph for blowing the whistle, the now-settled class action suits against Digital, and his own eventual, albeit temporary, resignation.

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DIGL-Watch is an exercise in free speech and public education.
It is a non-commercial, non-profit, news-oriented website, presented as a public service to the global community.
The website is not affiliated with nor sponsored by Digital Lightwave, Inc. or any Scientology organization.