September 10, 2003

OFFICE OF THE UNITED STATES ATTORNEY
SOUTHERN DISTRICT OF CALIFORNIA
San Diego, California

United States Attorney
Carol C. Lam

For Immediate Release

NEWS RELEASE SUMMARY

Carol C. Lam, United States Attorney for the Southern District of California, and Eileen J. O'Connor, Assistant Attorney General for the Tax Division, Department of Justice, announced that a federal grand jury in San Diego has returned an indictment against Lonnie R. Divine, Yvonne R. Ruel, and Deanna M. Devine. The indictment charges the defendants with conspiracy and income tax evasion.

According to the indictment, Lonnie Divine, Deanna Devine, and Yvonne Ruel, conducted business under many different names. Although the business names often changed, the business activity of selling items through door-to-door sales remained constant. The indictment described the companies as the "Divine Enterprise." Some of the names with which the Divine Enterprise did business include: Aids Prevention Institute, Inc.; Babies Addicted to Drugs Foundation; Youth of America Program Inc.; Heartline Foundation, Inc.; and Divine World-Wide Ministries. The Divine Enterprise earned income from selling magazine subscriptions, long distance telephone service, 1-900 telephone service fees, and travel services. These sales were made by contacting customers through door-to-door solicitation throughout the United States. Over a five year period, the defendants' gross receipts totaled in excess of $11 million.

The indictment alleges that the door-to-door solicitations were conducted nationwide, primarily by groups of high school and college-age salespersons who traveled to various areas. Sales managers traveled with the salespeople to make travel arrangements and to tell them which neighborhoods to canvass for sales. The administrative office of the Divine Enterprise was located in Southern California. The primary office was at Camino Del Rio South, San Diego, California. All customer orders and customer checks in payment for orders were forwarded to this office. Lonnie Divine was the owner and controller of the Divine Enterprise. His wife, Yvonne Ruel, worked periodically as the manager of the administrative office and supervised some of the sales managers. Ruel was an officer of many of the companies in the Divine Enterprise and was listed as a signer on many business bank accounts. Deanna Divine, the daughter of Lonnie Divine, was the administrative officer manager. She organized the customer payments received from the field sales managers and was responsible for completing the deposit slips for the gross receipts to be deposited to bank accounts of the Divine Enterprise.

According to the indictment, the defendants failed to file individual and corporate income tax returns for themselves and all the Divine Enterprise companies. The defendants used several methods to obstruct the Internal Revenue Service in the computation, assessment, and collection of their federal income taxes. The defendants used extensive nominee and fictitious names to operate the Divine Enterprise. The defendants would often convert the Divine Enterprise gross receipts to cash, frequently after transferring the money through several bank accounts. The defendants used cashier's checks, money orders, checks payable to "cash" and currency to acquire assets and pay their personal expenses. The defendants transferred money from the Divine Enterprise to an offshore bank account in the Cayman Islands. The gross receipts of the Divine Enterprise were also used to make payments on Lonnie Divine's accounts at several casinos in Las Vegas and Lake Tahoe.

DEFENDANTS

Lonnie R. Divine
Yvonne R. Ruel
Deanna M. Devine

SUMMARY OF CHARGES

Conspiracy in violation of Title 18, United States Code, Section 371
Maximum sentence: Five years in prison and fine not to exceed $250,000
Income Tax Evasion in violation of Title 26, United States Code, Section 7201
Maximum sentence: Five years in prison and fine not to exceed $250,000

AGENCY

Internal Revenue Service, Criminal Investigation

An indictment itself is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.