Guru charged in sweat lodge deaths says he's broke

[February 19, 2010]  FLAGSTAFF, Ariz. (AP) -- A man who built a multimillion-dollar empire with a motivational mantra that teaches people to create wealth contends he's broke and cannot post bond in a criminal case that threatens the survival of his self-help business.

James Arthur Ray was charged earlier this month with three counts of manslaughter stemming from the deaths of three people following a sweat lodge ceremony he led last year in Arizona. His bond has been set at $5 million, a figure his attorneys say is "excessive and oppressive."

"Despite misconceptions perpetrated in the media, Mr. Ray is not a man of significant assets and certainly not the millions reported in the press," his attorneys wrote in documents obtained by The Associated Press from the court. The documents are now officially sealed.

Ray himself has touted his wealth and success in numerous media interviews and on his Web site, including an estimated $10 million in revenue in 2009 and a seven-figure advance for his book, "Harmonic Wealth" that hit the New York Times Best Sellers List in May 2008.

He told "Fortune Magazine" for an April 2008 article that his financial goal was $21 million a year and that he was sure there were limits, but "I am not aware of them."

But the court documents paint a much different picture, showing that he is severely in debt with a net worth of negative $4.2 million. Real estate makes up about $3.1 million of Ray's total assets of nearly $4.2 million, but he has little equity.

The properties include homes in Hawaii and Nevada, and rentals in California. Ray's Carlsbad, Calif.-based business, James Ray International, and a Beverly Hills mansion he recently put up for sale are not listed among the assets.

Ray's liabilities were listed at more than $8.5 million, much of which was unexplained in a statement of net worth.

In a financial statement filled out by Ray the day of his arrest, he wrote that he pays out $94,000 a month in expenses, including for rent and mortgages, utilities, insurance and vehicles. He listed his assets as $14,000 in a checking account and $220,000 in a retirement account.

Ray's attorneys said his financial stability has been shaken by withdrawals from bank accounts in the last several months to pay creditors and legal fees, including a significant retainer deposited in a trust account at the California-based law firm representing him.

Ray's attorneys say he has no criminal history, isn't a threat to public safety or a flight risk and cannot afford the bail. They are set to argue Tuesday in court to have Ray released on his own recognizance coupled with the surrender of his passport or have bail set at a minimum.

It's unclear what position the Yavapai County, Ariz., attorney's office has taken on the defense request to reduce bail. Its response to the motion is sealed, and a spokeswoman cited fair trial rights in declining to comment.

Ray has pleaded not guilty to each of the manslaughter counts. If convicted, he faces up to 12 1/2 years on each count, with probation being an option.

Prosecutors contend Ray recklessly crammed more than 50 participants of his "Spiritual Warrior" event near Sedona into a 415-square-foot sweat lodge, a sauna-like experience that uses heated stones to cleanse the body and is commonly used by American Indian tribes. Many participants have said Ray chided them for wanting to leave, even as people were vomiting, getting burned by hot rocks and lying unconscious on the ground.

Three people died -- Kirby Brown, 38, of Westtown, N.Y., James Shore, 40, of Milwaukee; and Liz Neuman, 49, of Prior Lake, Minn. Eighteen others were hospitalized.

Ray's attorneys have called the deaths a tragic accident and said he took all the necessary precautions and immediately tended to the ill.

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On the Net:

James Ray International:
http://www.jamesray.com/

[Associated Press; By FELICIA FONSECA]

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