The Houston Chronicle
Defendants free, but not cleared, in cult-memories trial; Psychotherapists still say patients were abused
By Mark Smith
April 04, 1999

Two Houston psychotherapists once accused of an insurance scheme exploiting patients’ memories of satanic abuse say they still believe cults may have been responsible for the patients’ conditions.

Gloria Keraga, who worked at Spring Shadows Glen Hospital in the early 1990s, said she isn’t sure if patients who testified against her were in a massive, international cult or were victims of isolated incidents of profound abuse.

“I don’t know if it is a worldwide conspiracy of satanism,” Keraga said. “But what does matter is that these individuals came to us with a lot of pain, a lot of suffering, and spoke about specific aberrant events they suffered through.”

Keraga, a psychiatrist, and Judith Peterson, a psychologist, were among five defendants in an unprecedented federal criminal case.

The five were accused of collecting excessive insurance payments by convincing patients at Spring Shadows Glen Hospital that they needed prolonged treatment for multiple personalities related to satanic-cult abuse.

After five months of testimony, U.S. District Judge Ewing Werlein Jr. ordered a mistrial Feb. 9 when the panel of jurors and alternates dropped below 12.

Though freed of criminal charges, the defendants are faced with damaged lives and reputations, and they realize that the lack of a complete trial and jury verdict means they missed the chance for clear exoneration.

“There is a relief it probably is over, but I really wanted it to come to a clear end,” Keraga said. “Right now, the public only knows what the prosecution had put on as evidence.”

Defense attorneys had been expected to present extensive rebuttal evidence and expert testimony, but the trial ended before the prosecution presentation was complete.

Peterson, 53, and Keraga, 46, said they fear that former patients who testified against them may be in denial of their past abuse, encouraged by prosecutors with no expertise in the complexities of mental illness.

“The government tried to be the ‘big brother’ to the mental health field while really not knowing one thing about the field,” Peterson said.

The Spring Shadows defendants and their patients were caught in a wave of cult-memories stories that emerged during the late 1980s and early 1990s.

Hundreds of patients nationwide were diagnosed with “dissociative disorders” – the category of illness that includes multiple personalities. They received therapy in more than 50 specialized dissociative disorder units, including one at Spring Shadows Glen.

During therapy, many recovered hidden memories of participating in or suffering sadistic ritual abuse at the hands of a widespread, multigenerational satanic cult that often included members of their own families.

In some cases, the memories led to criminal charges and prison sentences for people accused of abuse.

Now many patients or their families say they believe the memories were false, and some criminal convictions based on their testimony have been overturned.

Patients have won or settled civil malpractice suits, but the Spring Shadows defendants were the first psychotherapists to face a criminal trial.

A61-count indictment alleged that from 1991 to early 1993, the defendants used hypnosis, drugs, isolation and other “mind control” techniques as part of a conspiracy to milk generous insurance policies.

In addition to Keraga and Peterson, the defendants were former hospital administrator George Jerry Mueck; psychiatrist Richard Seward; and therapist Sylvia Davis. Spring Shadows Glen now is under different ownership and renamed Memorial Spring Shadows Glen.

All five have asked Werlein, the U.S. District judge, to make the government pay for their legal expenses, alleging that they were prosecuted unjustly.

Prosecutors said the trial ended before they got a chance to present most of the evidence specifically related to insurance fraud.

But Keraga believes the U.S. attorney’s office took its best shot. “I think if the government had any evidence of a conspiracy they would have put it on in the first month,” Keraga said.

She blames the stress of her lengthy trial for the death of her father Feb. 7, two days before Werlein ordered the mistrial.

Peterson pointed to evidence that most of the patients recalled satanic abuse and were diagnosed with multiple personality disorder before entering Spring Shadows Glen.

She said she believes the former patients who testified that their memories were false were trying to blame therapists rather than deal with past abuse.

“It is much easier for these patients to think that nothing happened to them, and they did nothing to anyone else, than it is to deal with the shame and guilt of true victimization,” she said.

Peterson said she believes she became a key target because she had extensive malpractice coverage.

“I had deep pockets and became a cottage industry for a group of former patients and civil attorneys,” Peterson said.

She said she and other therapists were forced by their insurance carriers to settle most of the civil suits.

Her national reputation as a specialist in treating psychological trauma also caused her to be a target, Peterson suggested, especially of the False Memory Syndrome Foundation. The Philadelphia-based organization, formed in 1992, comprises people who contend they have been falsely accused of abuse – often because of other family members’ false memories.

She said that her goal has never been to break up families, and pointed to her 30-year marriage and her three grown children.

A number of her patients, Peterson said, were standing by to testify on her behalf.

PETERSON said the Spring Shadows Glen adult dissociative disorders unit, where she served as clinical director, treated more than 120 patients, most of them women. “It is amazing that there were so few people who did not do well, especially when you think of the terrible, terrible abuse of these people,” she said.

Keraga said the patients were suffering from effects of abuse and needed treatment, whether their abusers were cultists or individual sadistic predators.

“I will never know the whole truth,” she said. “I do know that a lot of awful things happened to these people long before therapists at Spring Shadows Glen ever saw them.”

Although Keraga acknowledged that she cannot prove the existence of a large, satanic organization, she said she has seen evidence since the early 1990s of smaller, organized cults. She also believes a number of the former patients, soon after being admitted to Spring Shadows Glen, had planned to destroy the reputations of the hospital and therapists.

Keraga said the defense had planned to call a former hospital patient who would have testified that she heard several former patients scheming to sue the hospital and doctors a year before Keraga became their attending physician at Spring Shadows Glen.

Other psychotherapy professionals have characterized the cult-memory incidents as mass hysteria or shared delusions with no evidence to back up the recollections of mentally ill patients.

But Peterson said her duty was to try to treat her patients’ maladies rather than to investigate their claims. She said treatment was based on “psychological reality.”

“We are not detectives, reporters or investigators attempting to corroborate outside evidence,” Peterson said.

Seward, who could not be reached for an interview, has a similar view, said his attorney, Chris Flood. “He believes that the patients believed that they were abused,” Flood said.

Peterson said that when several patients threatened to destroy her practice or harm her physically, she decided to tape therapy sessions.

And she willingly provided federal investigators more than 1,000 tapes, which became key government exhibits in the trial. “If I was to do anything criminal, why would I have videotaped or audiotaped all therapy sessions?” Peterson said.

She also said the trial showed that none of the former patients could point to a particular memory that had been implanted or suggested.

In a July 1992 audiotaped family session played during the trial, Lucy Abney and her teen-age daughters, Catherine Smiley Click and Karen Gauthier, confronted their stepfather, L.T. Abney, about his alleged satanic cult involvement.

Smiley accused L.T. Abney of striking her with a bullwhip while she was bound to a tree, tearing skin from her arm.

But Abney questioned Smiley how it was possible that such an assault would not leave scars.

During the session, Abney voiced fear that his family had been programmed or brainwashed. Abney was asked to begin intensive treatment, but later refused and tried to cut off the insurance coverage of his family.

Peterson said the patients’ claims at least indicated that abuse had occurred. “The three women were adamant that it had occurred,” she said.

PETERSON, Keraga, Seward and Davis remain licensed to practice in Texas.

Peterson said the trial has left her about $ 400,000 in debt. And she believes the stress of her legal troubles aggravated stomach and bone ailments.

She said she will continue a private clinical practice, but refuses to work again at a private psychiatric hospital.

Keraga has continued her private practice, and Seward is a psychiatrist for a state agency.

Davis, who also maintains her innocence, is focusing on family commitments, and hasn’t decided whether to resume her career, said her lawyer, David Gerger.

Mueck continues to work as a vice president for Memorial Hermann Health Care System. Through his attorney, Tom Hagemann, Mueck said he committed no crime and believed all along that he would be cleared. “But it was frightening how long the government stayed with a case that they should never have brought and should not have won. Justice won out, but it was a long and difficult road.”

Peterson said the advent of managed care has reduced insurance benefits for psychological maladies, and she said she worries that patients may not be able to afford the lengthy, intensive treatment that is sometimes necessary for sex abuse and other mental trauma.

She said she hopes to do volunteer work treating psychological trauma, and that her legal troubles may prove valuable.

“After seven years of trauma,” Peterson said, “I understand so much more.”

Gloria Keraga