First-Ever Criminal Charges Filed in Recovered Memory Case 
Marti Kranzberg, PhD, CGP

The matter of “recovered memories” has stirred a hornet’s nest of controversy in the world of psychotherapy. Clinicians and academicians have fiercely debated the nature of memory and the factual truth of memories “recovered” in the course of therapy. Some techniques used to unearth “repressed memories” have generated impassioned opinions and fevered accusations on all sides of the dispute. Even clients and families of clients have waded into the fracas. In a 1996 article on risk management in Professional Psychology: Research and Practice, Knapp and VandeCreek noted that “no area of psychotherapy practice has created such a powerful and organized antagonistic force.”

While the protracted debate continues, the most critical effect for all therapists, not just those who work with recovered memories, may be the wave of never-before-filed lawsuits against therapists. In this litigious culture, it is not uncommon for therapists to be sued. This controversy, however, has generated increased legal exposure for clinicians in several arenas. One type of claim involves clients who later recant memories of abuse uncovered in therapy. Another concerns suits by family members of clients who reported abuse by those family members, and lastly, in perhaps the most disturbing action to date, the federal government filed criminal charges against five persons for fraudulent diagnosis and treatment in a Houston, Texas, hospital. While some clinicians have previously been charged with various criminal offenses, this was the first time criminal charges were filed for diagnosis and treatment, according to Judith Peterson, PhD, a defendant in the Houston case. 

In this unprecedented case, the federal government filed criminal charges of conspiracy and fraud against a psychologist, two psychiatrists, a licensed professional counselor, and a hospital administrator. The trial, which had been expected to last six to eight weeks, ended in a mistrial after five months because there were not enough jurors to render a verdict. At that time, only the government had presented its case. The defense had not yet argued theirs. The government then decided not to retry the defendants. 

The suit involved treatment in an inpatient specialized unit for patients with multiple personality disorder allegedly caused by ritualized sexual abuse in cults. The defendants were charged with creating a treatment unit that did not exist in order to make bogus insurance claims and to collect payment for services not rendered. 

Defendants were also charged with 60 counts of mail and wire fraud based on submitting claims to insurance companies outside of Texas. Conviction would have resulted in a three- to five-year prison term and up to $250,000 in fines for each count. “If I had lost, I could have spent the rest of my life in prison,” said Dr. Peterson.

In addition, the government charged that the diagnosis of multiple personality disorder was fraudulent based, in part, on statements by the former clients that they did not have multiple personality disorder. Further, the indictment charged that the defendants were using “non-traditional” therapy techniques, including hypnosis, art therapy, psychodrama, journalizing, administering drugs for untested uses, and using voluntary restraints for patients who feared that “alters” would become violent. “Hypnosis was definitely on trial,” Dr. Peterson said. Furthermore, the government asserted that group therapy was fraudulent because the individual patient’s treatments were “contaminated” by other patients in the group. 

According to Dr. Peterson, the suit began with civil suits by members of three families that she had treated in the hospital. During treatment, the children and the parents admitted that the parents had abused their children. The parents later recanted the abuse and sued Dr. Peterson for “brainwashing, collusion, reporting child abuse to the authorities” and a variety of other “cookie-cutter charges” that are typical of these types of lawsuits according to Dr. Peterson. She believes that the attorney for the plaintiffs in the civil actions went to the government encouraging them to file criminal charges. 

She also believes that the False Memory Syndrome Foundation (FMSF) had a hand in the indictments. FMSF is a Philadelphia-based group composed mainly of academics that think many repressed memories of sexual abuse are the result of certain types of therapeutic interventions. People who say they have been falsely accused of sexual abuse by their adult children as a result of recovering memories in therapy are also active in the organization. Whether or not FMSF influenced the proceedings, it has been aggressive in challenging the validity of recovered memories. During Dr. Peterson’s trial, FMSF alerted the media and posted daily information about trial proceedings on its web site. 

Although she was charged with fraud, Dr. Peterson reported that the government focused only on her diagnostic and therapeutic activities at the hospital. All but one of the clients, she noted, had been diagnosed with multiple personality disorder prior to their admission to the hospital. They were “trying me for malpractice rather than conspiracy and fraud.” After the charges were dismissed, the remaining 11 jurors unanimously voted for acquittal, Dr. Peterson reported. 

The cost of the defense, more than $400,000, was not covered by liability insurance because criminal charges are not covered in malpractice policies. Dr. Peterson reported that she contacted the American Psychological Association for financial help from its legal defense fund but was turned down because she would not report to them her defense plan.

While the trial is behind her, Dr. Peterson is not presently seeing clients and is not sure that she will return to the practice of psychotherapy. The stress of the trial has taken its toll physically, and she had most of her stomach removed because of ulcers according to an article in The National Psychologist. “ The experience was horrifying. I don’t want this to happen to anyone else,” she said.

Looking back, Dr. Peterson finds several aspects of the trial to be chilling. The first was the government’s attempt to determine which diagnoses in the DSM are valid. “This was not just about a particular diagnosis, which is controversial. The issue is that the government came in and tried to decide that a particular diagnosis did not meet its approval. That could be any diagnosis.” She is further troubled by the government deciding that a diagnosis is fraudulent because a client says that she did not have the diagnosis. This essentially means that clients, not clinicians, are diagnosing psychiatric disorders. Finally, she believes the government’s attempt to criminalize specific therapeutic methods to be a dangerous intrusion into the practice of psychotherapy. 

The good news is that “the government tried to criminalize therapy, but failed,” said Dr. Peterson. The bad news is that the government’s decision to try this case may herald other criminal charges, although Dr. Peterson believes that the government’s case was so “thoroughly off base” that it is doubtful they would attempt to prosecute similar cases. 

Conclusion
Whatever one’s belief about the issue of recovered memories, all clinicians have all been affected by the swell of legal cases that has resulted from this type of work. While the criminal suit seems to have added a new layer of vulnerability for clinicians, it is not clear whether or not this case portends a future trend. A disturbing aspect of this case for group therapists was the assertion that group therapy is fraudulent because individual patient’s treatments are “contaminated” by others in the group.

Knapp & VandeCreek noted that the “antitherapy rhetoric in the repressed memory war has often been outlandish, unjustified, and needlessly offensive.” Such virulent opposition, they say, has been fueled, in part, by substandard practices by some clinicians. They counsel clinicians to adhere to professional standards of practice in diagnosing and treating clients. Hopefully, group psychotherapy is included within professional standards of practice. 

This article was published in the October/November 1999 issue of The Group Circle.