DIGL stock price
He said, "they're getting me into trouble again." I told Bryan he was obliged to follow the laws of the U.S. regarding these matters and not the dictates of the church."

~ Seth Joseph's Personal Notes
"Steve told Bryan he needed to stop letting the Church influence the way he was running the company and he needed to work with people who were trying to solve the problems. "

~ Seth Joseph's Personal Notes
Digital Lightwave & Scientology
January 2005
click for large versionIt's been awhile since there's been any DIGL news (other than slow and painful corporate death thrashings, like a captured fish in a bucket, whose fate is nevertheless sealed). But then someone sent us this neat photo of Bryan and June Zwan, alongside Scientology head David Miscavige, from Scientology's Impact Magazine 105, September 2003. The photo, located on page 22, depicts Bryan and June recieving the IAS Silver Meritorious Award, given to Scientologists who have contributed more than $750,000.00 to the International Association of Scientologists.
SP Times // March 16, 2004
New Board Director
"The troubled Clearwater maker of fiber-optic testing equipment said Monday that it had appointed Jeffrey S. Chisholm as both a board director and audit committee chairman. Nasdaq requires that a listed company's audit committee be composed solely of outside directors. The company has been out of compliance since the end of 2003, when management professor William F. Hamilton resigned from the board and as audit committee chairman. Chisholm, an independent consultant since 2001 and chairman of Dexit Inc., specializes in corporate turnarounds and brand building."

July 3, 2003
Another grim, and possibly final, quarter is on the horizon for Digital Lightwave.

Last week, the embattled company submitted an 8K filing with the SEC detailing its continuing financial woes. On June 26, DIGL entered into an agreement to borrow $2 million loan from Optel LLC, the shell company controlled by DIGL founder Bryan Zwan, at a whopping 10% interest rate. The loan is due on July 31, 2004, and brings DIGL's total debt to Zwan up to $6.5 million.

On June 26, 2003, Digital borrowed $2.0 million from Optel, LLC (Optel) pursuant to a Secured Promissory Note (the Optel Note). Optel is an entity controlled by Digital's majority shareholder and current chairman of the board of directors, Dr. Bryan Zwan. The Optel Note (a) bears interest at an annual rate equal to 10% per annum, (b) is secured by a first priority interest in substantially all of the assets of Digital pursuant to a Tenth Amended and Restated Security Agreement, dated as of June 26, 2003 (the Security Agreement), and (c) may be prepaid at any time. Digital will use a portion of the proceeds from the Optel Note to make the first settlement payment to Fidelity required under the Agreement and the remainder of the proceeds for general corporate and working capital purposes. The Optel Note matures on July 31, 2004, unless certain specified events occur accelerating the maturity. Digital's total indebtedness to Optel is now approximately $6.5 million, exclusive of accrued interest.

Even with interest rates just this side of usury, Zwan's Optel LLC has apparently had second thoughts about pouring more cash into the black hole that is Digital Lightwave, according to the SEC filing:

On June 26, 2003, Optel terminated the commitment letter dated April 15, 2003 for the provision of a $10.0 million credit facility to Digital, and notified Digital that it does not intend to provide it with the credit facility as contemplated therein, due to Digital's failure to achieve certain financial and restructuring objectives. Optel has advised Digital that it will nonetheless be willing to consider requests from Digital for additional funds, but will only make advances in its sole discretion.

Not all the news in the filing was unrelentingly bleak, however - at least, not if your name happens to be Seth Joseph. On June 18th, the former DIGL executive finally received the $4.5 million in damages that he won after successfully suing the company for wrongful dismissal in 2001:

Digital and Fidelity entered into a Compromise and Settlement Agreement (the Agreement). Under the terms of the Agreement, Digital is required to pay to Fidelity 60% of the amount paid by Fidelity under the Final Judgment and the Attorneys' Fees and Costs Judgment as follows: (a) within 10 days of the date Fidelity makes payment on each Judgment, Digital shall pay to Fidelity 35% of the amount paid by Fidelity on such Judgment; (b) thereafter, as to each Judgment, within 30 days of the first payment, Digital shall pay to Fidelity an additional 10% of the amount paid by Fidelity on such Judgment; (c) within 30 days of the second payment, Digital shall pay an additional 10% of the amount paid by Fidelity on such Judgment; and (d) within 60 days of the third payment, Digital shall pay an additional 5% of the amount paid by Fidelity on such Judgment. On June 18, 2003, Fidelity paid the Final Judgment plus interest in the amount of $4,484,414.39.

Congratulations to Seth Joseph.

SP Times // May 10, 2003
Digital whistleblower finally wins
Seth Joseph finally wins his wrongful termination case against Digital Lightwave. It was Seth Joseph's story that spurred this particular website into being. For more information on Seth Joseph, see, well... here :)
The Wolf is at DIGL's Door // April 10, 2003
After alerting the SEC last week that it would be late in filing its annual 10-K form because it "could not be completed without unreasonable effort or expense," Digital Lightwave notified the SEC of several lawsuits and arbitration proceedings filed by its vendors and creditors, including its principal manufacturer, all totalling approximately $24 million. DIGL had borrowed $10 million from company founder Bryan Zwan's shell corporation Optel, LLC back in February and it would seem that that money has all but run out. The last line of the 8-K filing paints a grim picture for the future of DIGL:

There can be no assurance, however, that Digital can raise additional financing from Optel or from any other source on terms favorable to it, or at all, that Digital's creditors will agree to any restructuring of outstanding liabilities, or that any other strategic alternatives will be identified. The inability to raise additional financing in the near term and/or restructure its debt would have a material adverse effect on Digital.

DIGL Connection to Scientology makes best business story of year 2002 // Jan 29 2003
TIMES WRITERS FEATURED: An article by St. Petersburg Times writers Deborah O'Neil and Jeff Harrington is featured in a new book, The Best Business Stories of the Year, 2003 Edition. The annual anthology includes their article, "The CEO and His Church," a four-month investigation into Digital Lightwave of Clearwater and its leadership's strong ties to the Church of Scientology. The articles in the book were written by leading business writers from newspapers and magazines nationally and were chosen by series editor Andrew Leckey and guest editor Allan Sloan. The editors said the Times report raised "provocative and disturbing questions" about a subject usually treated "with kid gloves," and has plot twists that read "like a novel." The book is published this month by Vintage Books.
(the original article, which summarizes most of the information found on this site, can be found Here.)
LAYOFFS// Jan 8 2003
DIGITAL LIGHTWAVE HAS LAYOFFS: Clearwater tech company Digital Lightwave is retrenching further. The maker of devices to test fiber- optic networks confirmed Tuesday that it has laid off part of its sales staff this week, including some overseas employees. Company spokesman Paul Harris would not specify the number of cuts or areas affected, saying details would likely be discussed when the company releases fourth quarter and year-end results this month. "The quarter closes and you make adjustments," Harris said. Last year, Digital Lightwave laid off about 40 employees during an industry slump but its headcount rose for the year to about 200 because of earlier acquisitions and growth overseas.
When Auditing Meets Auditing // Oct 25 2002
In a recent filing with the Securities and Exchange Commission, Digital Lightwave announced that it has hired Grant Thornton LLP to serve as its independent accountant for the next two years. Grant Thornton, which describes itself as "the leading global firm dedicated to serving the needs of middle-market companies," has also served as auditor to the Church of Spiritual Technology, the shadowy parent church that stores away most of the millions of dollars belonging to the Church of Scientology.

In fact, the ties between Grant Thornton and Scientology don't just end there: in 1997, a Grant Thornton LLP outpost in Houston, Texas was a member of the World Institute of Scientology Enterprises, and Grant Thornton also provides auditing services to the City of Clearwater, home to not only Digital Lightwave, but also the Church of Scientology's "spiritual mecca".
At least it's not an offer for shares in DIGL // Oct 17,2002
A marketing pitch apparently devoid of both tact and business sense has been hitting ex-DIGL employees lately: targeted mailings offering platinum credit cards. The catch? Prominent in the address is the name of their former employer, none other than Digital Lightwave. Is Bryan Zwan so desperate for hard cash that he's selling his ex-employees' information to mailing lists? If you're a former DIGL employee who has received this, or any other advertising pitch that uses the DIGL name, we'd love to hear from you.
Light Reading // October 15, 2002
DIGL Acquires Lightchip Biz
Digital Lightwave, Inc., a leading provider of networking solutions, today announced its acquisition of the optical network management product line of privately-held LightChip, Inc., a Salem, N.H.-based provider of innovative components and subsystems for optical networks. Terms of the transaction, which closed on October 11, 2002, were not disclosed.
Light Reading // August 16, 2002
DIGL Founder: $348M in Insider Sales
Ready? At the latest tally, it appears that Bryan Zwan, chairman and founder of Digital Lightwave Inc., has taken no less than $348 million out of the company. Meanwhile, Digital Lightwave's business has collapsed, it has a market capitalization of less than $40 million, and it's now almost trading as a penny stock, at $1.22.
St. Pete Times // August 14, 2002
Zwan hands off top jobs at Digital Lightwave
Digital Lightwave founder and top shareholder Bryan Zwan is stepping down as president and chief executive after a seven-month struggle to turn around the once high-flying Clearwater technology company.
Light Reading // July 25, 2002
Losses, Lawsuits, and Scientology
Digital Lightwave Inc. (Nasdaq: DIGL) may currently take the cake for colorful troubles in the optical networking business. Not only is the company losing money, but it's juggling a variety of lawsuits and hearing whispers about its CEO, Bryan Zwan, who's been affiliated with the Church of Scientology and several years ago gave up the CEO spot but has now returned.
You can apparently buy digl units on ebay for almost half the price.. who knew?
St. Pete Times
The CEO and his church
Months of interviews and thousands of pages of court papers show the effect that influential church members had on a Clearwater company that was a darling of the dot-com boom.
Advance #24 (Scientology publication - circa 1977)
Zwan and Spouse Douse Blaze with their Minds!
Tampa Tribune // May 14, 2002
Digital Lightwave Poses New Problems For Old CEO
What You Should Know
Digital Lightwave, Inc. (NASDAQ: DIGL) was founded by Scientologist Bryan Zwan in 1990 to develop network technology products for the fiber-optic industry, and began a high-profile roller-coaster ride on the booming technology market when it went public in 1997. In its short history, DIGL has been involved in a class-action lawsuit, an SEC investigation, and a wrongful termination complaint.

Bryan Zwan's recent return as CEO (and exodus of bench warming non-Scientologists CEO Garry Chastelet and CFO Steve Grant) after a three year hiatus makes the explosive documents on this site all the more relevant. In his short stint as CEO, Chastelet once assured the St. Pete Times that "Digital Lightwave is not a Scientology company."

Well, Chastelet is gone and with Zwan back as both CEO and majority shareholder, we can only assume that things are 'back to normal.' The problem is that, under Zwan, Scientology's interests far too often eclipse those of Digital Lightwave.

DIGL-Watch.com focuses on three separate cases, each occuring during Zwan's tenure as CEO and each demonstrating the malignant influence of Scientology in the corporate environment.

The cases involving Brian Haney and the SEC are both familiar to the public, but that of Seth Joseph is not widely known outside the Pinellas County courtroom. where DIGL continues to appeal the original ruling against it.

Seth Joseph was DIGL's Senior Vice-President between September 1996 and February 1998. Toward the end of 1997 he (and others) became aware of the fraudulent actions of Denise Miscavige Licciardi. Licciardi is the sister of Church of Scientology 'Ecclesiastical Leader' David Miscavige. Joseph's reward for blowing the whistle on Licciardi was to be fired by Zwan.

Q. Why were you in fear for your personal safety and the safety of your family and the other people you mentioned?
A. Well, I think there were really two elements, one was that there were some very, very angry shareholders and now there were some very, very angry Scientologists.

~ testimony of former DIGL CFO Steve Grant
Q. In fact, you were so fearful for your safety that when you left on Monday, January 26th, you actually took all your personal photos of your family with you, did you not?
A. I had just brought them a few days prior. And yes, I did take them home.
Q. Why did you take home the pictures of your family?
A. I have five children, a wife, spread throughout the country, okay. And I was concerned about their safety. And a first wife, too, for that matter. I was concerned about the safety of myself and my family. I think it's a very common reaction.
Q. You didn't want the Scientologists to see pictures of your family?
A. I didn't want the Scientologists to see anything.

~ testimony of former DIGL CFO Steve Grant
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.