UNITED STATES DISTRICT COURT DISTRICT OF OREGON



Civil No.: CV '08-0233 HA



COMPLAINT AND DEMAND FOR JURY TRIAL



HIGHER BALANCE, LLC, an Oregon

Limited Liability Company, dba HIGHER

BALANCE INSTITUTE, Plaintiff



v.



QUANTUM FUTURE GROUP, INC, a

California corporation, and LAURA

KNIGHT- JADCZYK, Defendants.



Plaintiff Higher Balance LLC, dba Higher Balance Institute ("HBI") files this Complaint against defendants Quantum Future Group, Inc. ("QFG") and Laura Knight-Jadczyk and alleges the following:



...defendants committed intentional torts that were purposefully targeted at HBI within the State of Oregon; defendants knew that HBI is a resident of the State of Oregon; defendants' tortious conduct cause HBI to suffer economic harm within the State of Oregon; HBI's claims arise out of defendants' activities relating to the State of Oregon; and the exercise of jurisdiction over defendants is reasonable in light of their intentional misconduct directed towards a resident of the State of Oregon.



As this Court has specific personal jurisdiction over the defendants, venue is proper in this district and division under 28 U.S.C 1391(a)(3)



General Allegations:



HBI is an Oregon-based company with over 40,000 customers from all over the world. HBI is dedicated to helping its customers relieve stress, reduce anxiety, and achieve emotional balance and spiritual enlightenment through meditation techniques. The majority of HBI's revenues are derived from the online sale of its books and CDs, which are designed to help its customers learn these meditation techniques.



[Etc...]



Defendant QFG operates a website known as Signs of the Times ("SOTT"). QFG posts articles and sponsors forums regarding various conspiracy theories and allegedly corrupt organizations on the SOTT website.



Employees and agents of QFG, including defendant Knight-Jadczyk, serve as administrators and moderators of SOTT forums. QFG employees and agents, including defendant Knight-Jadczyk, post comments and analyses in SOTT forums. These employees and agents act within the course and scope of their agency for QFG when serving as administrators and moderators of the SOTT website and when posting comments and analyses on the SOTT website.



SOTT forums are available to the general public online.



...Many of HBI's existing and potential customers read the SOTT website as a source of alternative media....



FIRST CLAIM FOR RELIEF - Defamation - Libel



....Beginning in May 2006, QFG sponsored a forum on the SOTT website concerning HBI under the heading "COINTELPRO."



Beginning in November 2007, defendants intentionally posted several false, baseless, and derogatory accusations concerning HBI on the SOTT website including, but not limited to:



a. HBI is a "front for pedophilia";

b. HBI is a "cointelpro" organization;

c. Meditation, as sold by HBI, is an act of "falling into confluence with a psychopathic reality";

d. Those associated with HBI must be careful to avoid sexual molestation by HBI members;

e. HBI is conning the public;

f. "Fishy sexual conduct is occurring at HBI; and

g. HBI "leads people more deeply into sleep."



By posting these statements in a public internet forum, defendants have published and communicated false and baseless accusations concerning HBI to third parties, including existing and potential HBI customers.



Defendants' statements tend to subject HBI to hatred, contempt, and ridicule and tend to diminish the esteem, respect, goodwill and confidence in which HBI is held by the public and by its customers.



Defendant made these false statements with knowledge of their falsity or with reckless disregard for their truth.



As a result of defendants' false and defamatory statement, HBI suffered general damages in the form of loss of reputation in an amount to be determined at trial, but in any event, not less than $500,000 . HBI has also suffered special damages in the form of lost income in amounts to be determined at trial, but in any event, not less than $834,732 .



Defendants defamatory statements are still available to the general public on the SOTT website and are easily found through internet searches relating to HBI. Defendants conduct causes HBI irreparable harm, and HBI is entitled to an injunction preventing defendants' continued defamation of HBI.



SECOND CLAIM FOR RELIEF: False Light



Defendants intentionally gave publicity to matters concerning HBI that placed HBI in a false light before the public. etc



...economic damages ... not less than $834,732 .



THIRD CLAIM FOR RELIEF: Intentional Interference with Economic Relations - Interference with Business Relationships



Defendant intentionally interfered with many of these business relationships by communicating the false and defamatory information listed...



...economic damages ... not less than $97,299 .



HBI... has also suffered damages in the form of loss of reputation ... damages .... not less than $500,000 .



...Defendants conduct was malicious and warrants punitive damages...



FOURTH CLAIM FOR RELIEF: Intentional Interference With Economic Relations - Prospective Economic Advantage



Defendant's interference has diminished the esteem, respect, goodwill, and confidence in which HBI is held by the general public, thereby hindering HBI's ability to obtain many new customers with whom HBI had a prospective business relationship. ... damages to be determined at trial...



...On its First Claim for Relief, that HBI be awarded general and special damages in amounts to be determined at trial, but in any event, not less than $1,334,732 , and that defendants be enjoined from their continued defamation of HBI.



...On its Second Claim for Relief, that HBI be awarded damages in an amount to be determined at trial, but in any event, not less than $1,334,732 . and that defendants be enjoined from continuing to place HBI in a false light.



...On its Third Claim for Relief, that HBI be awarded damages in an amount to be determined at trial, but in any event, not less than $597,299 . plus punitive damages, and that defendants be enjoined from their coninued interference with HBI's prospective business relationships.



...On its Fourth Claim for Relief, that HBI be awarded damages in an amount to be determined at trial, but in any event, not less than $1,205,000 plus punitive damages, and that defendants be enjoined from their continued interference with HBI's business relationships.



... That HBI be awarded pre-judgment and post-judgment interest on all damages recovered.



...That HBI be awarded its costs and disbursements incurred in this action; ...



Harry and David demands a trial by jury on all issues so triable.



25th day of February, 2008.



Bullivant houser Bailey PC

Renee E. Rothauge

Chad M. Colton

Tel 503.228.6351

Attorneys for Higher Balance Institute

A 39-year-old Aloha man who promises spiritual awakening through meditation books and CDs he sells on the Internet is facing sex-abuse charges.



Beaverton police Detective Mike Smith said Eric J. Pepin runs what appears to be a cult out of his Higher Balance Institute on Southwest Second Street in Beaverton.



Pepin was arraigned Tuesday in Washington County criminal court on one count of using a child in a display of sexually explicit conduct, two counts of second-degree sexual abuse, and four counts of third-degree sexual abuse. He was released after posting $26,750 cash, or 10 percent of $267,500 bail. A trial was set for Sept. 12.



Using a child in a sexual display is a Measure 11 crime punishable by a mandatory minimum of 5 years and 10 months in prison.



Jamison Dwight Priebe, 21, who works for Pepin and lives at the same address in the 19600 block of Southwest Cooperhawk Court in Aloha, also was arrested on one count each of using a child in a sexual display and third-degree sexual abuse.



Priebe and Pepin turned themselves in at the Washington County Jail last week after a grand jury handed down secret indictments. Priebe was released after posting $25,375 cash bail and is awaiting arraignment Monday.



Smith said a man who is now 20 was 17 and working for Pepin when he allegedly was sexually abused at the Higher Balance office in the 11900 block of Southwest Second Street in Beaverton and at Pepin's former home in the city.



A call to the Higher Balance Institute on Wednesday was answered by a "Personal Star Reach Coach," who referred questions to Pepin's private attorney, Sam Kauffman.



"The charges are false, and we are confident Mr. Pepin will be exonerated," Kauffman said.



Pepin's Web site claims he has located more than 100 missing persons and runaways, along with U.S. Navy submarines, through a psychic ability he calls "remote viewing."



Pepin's meditation systems, which sell for $79 to $149, help customers develop their "sixth sense" and apply it "inward to awaken a dimensional universe within the mind," the Web site says.



According to an affidavit Smith filed with a request for a search warrant, the alleged victim told police that Internet customers who rave about Pepin's teachings are men and women usually older than 35. But, the man said Pepin told him he should recruit "good-looking men" between the ages of 18 and 24 to work for him.



The court record also says Pepin knew the man was 17 when he forced him to perform sex acts.



The boy, Smith wrote, "was taught by Pepin to believe that the sexual contact was only a spiritual necessity." But after a while, the affidavit says, the boy decided he was being used by Pepin, who bought him meals and paid him $200 after sex.



The man contacted Beaverton police in January.



Smith said anyone who may have had underage sexual contact with Pepin should call him at 503-526-2280.



Smith said the man accusing Pepin told police he met one of Pepin's followers at Beaverton Town Square in April 2004. He told Smith the recruiter invited him to meet Pepin and see him demonstrate levitation.



Pepin introduced himself dressed in a robe emblazoned with the words "Master Eric" and a triangular symbol and told the victim to take off his shirt, the detective said.



"It's a cult," Smith said, "anytime you have a guy who fancies himself as the master, the leader."

Beaverton police Detective Mike Smith said Pepin operated the Higher Balance Institute in Beaverton. Smith said the ornate robe emblazoned "Master Eric" turned up during a search.

Institute leader acquitted of sex charges



HOLLY DANKS - HILLSBORO -- A Washington County Circuit judge called the leader of a metaphysical Internet sales company manipulative and controlling and his testimony unbelievable, even as he acquitted him Wednesday of charges that he had sex with an underage boy.



Judge Steven L. Price, after a five-day trial without a jury, found Eric James Pepin, 40, not guilty of two counts of second-degree sexual abuse, four counts of third-degree sexual abuse and one count of using a child in a display of sexually explicit conduct.



Also acquitted of third-degree sexual abuse and using a child in a pornographic display was Jamison Dwight Priebe, 21, who has worked for Pepin's Higher Balance Institute since he was 18.



"Everybody has stood by me who knows me," Pepin said Wednesday after hugging supporters. "They had faith in me, prayed for me. I told them I wouldn't let them down. I did nothing of what was alleged. I've been nothing but honorable and impeccable."



However, Price said it was "probable that the conduct alleged in all counts occurred," but he wasn't convinced beyond a reasonable doubt. "There's a lack of strong corroboration," such as a date-stamp on a videotape of the sexual encounter, the judge said.



The accuser testified Pepin had him take off his shirt the first day they met at Pepin's Beaverton home in April 2004.



"He was going to try and fix my energy and he needed me to trust him," the accuser said. Pepin touched the teen's "chakra points" on his heart, head and lower abdomen.



"Eric asked me to tell him everything I had done in my life that I was ashamed about," the teen added.



The accuser said Pepin asked him how old he was the first day they met and that he told him the truth.



"He said students had to be 18 because he didn't like parents fussing around," the accuser said.



But within days the two were having sex, including a three-way encounter with Priebe, the youth testified. Pepin called it "crossing the abyss," the accuser said, "surrendering yourself to your teacher, your master."



Pepin testified he is gay and has had sexual relationships with most of his 11 employees , but not before they were 18. Pepin said he gave his accuser a job, even though the teen was a poor worker, and continued to be intimate with him and give him money after he was fired, to help him out.



Stephen A. Houze, Pepin's private defense attorney, called the accuser a liar more than 100 times in his closing argument and noted that Pepin was "the perfect patsy" because society wants to believe the worst of a gay man. Houze said the accuser brought the charges because he wanted to shake down Pepin.



Pepin's Higher Balance Institute, now on Northwest Saltzman Road in Cedar Mill, reached an annual high of $2 million in Internet sales of meditation CDs, tapes and books before his arrest in July.



Pepin touts himself as a psychic and "remote viewer" who has found lost submarines and missing people, and says he created the "psychic pill" Magneurol6-S that enhances brain function, heals nerve damage, heightens paranormal experiences and relieves stress for $79 a bottle.



Andrew Erwin, deputy district attorney, called Higher Balance nothing more than a sex cult run by a "snake oil" salesman who preys on the troubled.



The accuser had nothing to gain by going to police and turned down $250,000 from Pepin to drop the sex charges, Erwin said.



"I'm disappointed," Erwin said of the verdicts. "The judge wants proof beyond all doubt and that's too high a standard."

Yesterday, as I was working on finishing up the next installment of the Comet Series of Articles, FedEx delivered a packet of mail from our corporate registered agent in the U.S. It was "Complaint and Demand for Jury Trial" filed in the State of Oregon by Eric Pepin's Higher Balance Institute, LLC. The reason? A discussion on the SOTT Forum that begins HERE Well, that was entertaining enough when you think about the fact that the discussion that he objects to was centered on several newspaper articles that describe his close calls with the legal system in Oregon over charges of sex abuse.The legal document I received is 10 pages long so I'm just going to summarize it here. If you want to read the whole thing (it's hilarious beyond belief!) go HERE for the pdf.Whoah! That's some heavy duty stuff, eh? Sounds like we just ripped up on that poor guy for no reason at all!But that's not quite the situation. The original article about Eric Pepin that was brought to our attention on page 5 of the above-mentioned forum thread read as follows:In another story from Associated Press found HERE , we read:Well, I've been falsely accused of trying to start a cult myself, so I might ordinarily have had sympathy for Pepin, but when I read the bit about the robe, I blew my tea through my nose. I guess that's why I'm such a failure as a cult-leader (aside from the fact that I'm not interested in the job) - I hardly ever wear anything other than sweats and bedroom slippers and spend all my time working!In any event, even though a grand jury felt that there was enough evidence to indict Pepin, he was eventually acquitted in trial before a judge as the following report informs us:And now, Pepin wants to sue QFG and yours truly for talking about these articles, published in a newspaper and scattered across the web (though all of them are no longer on the newspaper's website, wonder what's up with that?)!!Notice that Pepin, himself, revealed his "sex cult" practices in his own testimony. We'll be trying to get transcripts of the trial to publish so our readers can hear it from the horse's mouth; stay tuned for that.Notice also that Pepin's attorney, Houze, accused the victim of bringing charges because he wanted to shake down Pepin even though the kid turned down 250 K hush money offered by Pepin. Well, maybe that's what gave Pepin the idea of suing me. Only thing is, he's gonna have a hard time collecting his 4.47 million because I don't own a thing, live in a rented house, drive a used car and QFG rarely has more than a grand in the bank at any given time. When we have fund-raisers, the funds are used almost instantly, repaying loans and covering basic expenses for the site and equipment.It's also humorous that Pepin is suingwhich only sponsors a world-wide group of independent researchers who, together, make up sott.net. QFG doesn't own sott, nor does QFG have any employees nor any official oversight of anything that the sott.net researchers say or do.But the bottom line is this: Eric Pepin is convicted out of his own mouth. I mean, what kind of teacher of meditation says that he has sex with all his employees? And all of them young men?Nope, we aren't backing down. We firmly believe, based on available official documents and court records, that Eric Pepin is a danger to innocent people looking for spiritual guidance. Obviously, young guys just looking for sex and money and a good time will be delighted to take his pills, listen to his tapes and attend his retreats. But the wider public who are not aware of these things in Pepin's background, who are not aware that even the judge who acquitted him regretted having to do so, and that the Prosecutor of the case was also convinced that justice had NOT been done, need to be warned about such individuals in our society.Maybe Eric Pepin will take Sott.net down, we don't know. We don't have money for an expensive defense attorney, we barely stay afloat. But even if that happens (and we hope our readers will help us out now as never before ), there are others who know and I don't think that Eric Pepin and all his minions can track down and silence all of them.Even if you can't give to our legal defense fund , I will appreciate letters of support during this trying time. Write to sott(at)sott.net and I will try to answer each and every one.And thanks to all our readers for your constant support and encouragement.