TRENTON -- The founders of a gay-to-straight conversion therapy group who were convicted of consumer fraud in June will shut down, reimburse the victims, and pay $3.5 million in legal fees, according to a court settlement Friday.

In the first case in the nation that put the scientifically discredited practice on trial, a jury in June decided Arthur Goldberg and Elaine Berk, the founders of JONAH, Jews Offering New Alternatives for Healing in Jersey City, and life coach Alan Downing to whom JONAH referred patients, "engaged in unconscionable commercial practices" and misrepresented their services.

The settlement, approved by Superior Court Judge Peter F. Bariso Jr. in Hudson County, requires JONAH to cease operations and remove its online presence within 30 days. JONAH must liquidate its assets an dissolve as a corporate entity within six months.

JONAH also agreed to pay $3.5 million in legal fees, some of which the plaintiffs in the case will share, according to the Southern Poverty Law Center, the lead attorneys in the case. Cleary Gottlieb Steen & Hamilton in New York and New

Lite DePalma Greenberg in Newark served as co-counsel.

The plaintiffs, former clients Michael Ferguson, Benjamin Unger, Sheldon Bruck, Chaim Levin, and parents Jo Bruck and Bella Levin, also will receive their share of $74,200 they had paid for individual and group counseling sessions.

JONAH, represented by Charles LiMandri, president and chief counsel for the Freedom of Conscience Defense Fund, could not immediately be reached for comment.

LiMandri argued in the case the organization and its founders made no money from the counseling delivered by counselors on their referral list. A small nonprofit organization founded by the parents of gay children, JONAH was motivated by faith to help people who want to change their lives.

The Southern Poverty Law Center, a national civil rights legal advocacy group filed the case in 2012 to challenge the practice criticized by the American Psychological Association as ineffective, emotionally demoralizing and damaging.

In 2013, New Jersey joined California when it outlawed licensed therapists from providing the therapy to minors - laws that have withstood legal challenges. Oregon and Washington D.C. followed, passing similar laws.

In May, bill was introduced in Congress to classify commercial conversion therapy and advertising that claims to change sexual orientation and gender identity as fraud.

"JONAH's conversion therapy program harmed countless LGBT people and their families," David Dinielli, deputy legal director for the Southern Poverty Law Center, the lead attorneys in the case, said in an announcement. "JONAH peddled discredited, pseudo-scientific treatments to people who weren't sick, who weren't broken, and who needed nothing but love and support."

"Other conversion therapy providers would be well-advised to examine what happened to JONAH, and to abandon their foolish efforts to make gay people straight," Dinielli added.

Some of young men described during the trial how they were instructed to undress in front of a mirror to improve their body images. One client was told to use a tennis racket to beat a pillow representing his mother for causing his homosexuality. Older men volunteering in the program were instructed to cuddle the young male clients as a way to fill the void of healthy male contact.

Chaim Levin, a plaintiff in the case, said he was "hopeful that this will be an important step in making sure that no one is ever harmed by conversion therapy again."

Levin's mother, Bella, who paid about $4,000 for treatment and testified at trial. "It was a mistake on my part that I did not question Goldberg too much," she testified at trial. "He was just a really good salesman."

Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio. Find NJ.com Politics on Facebook.