Why Did The Supreme Court Make Scams Legal?

Why does the American legal system protect scammers?

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In 1944, the U.S. Supreme Court handed down a decision that laid the foundation for religious scammers to raise unfathomable fortunes through fraud. The ruling effectively gave religious leaders the legal right to sell miracle cures, supernatural services, and snake oil remedies under the protective umbrella of “sincerely held beliefs.”

Fast forward 80 years, and that same legal precedent has helped fuel a booming industry of wellness influencers, spiritual gurus, and multi-level marketing schemes. Today, they crowd our social media feeds, promising divine transformations and quantum healing—if only you’ll click “subscribe.”

But how did we get here?

Let’s rewind to the 1930s. Guy and Edna Ballard founded a spiritual movement known as the I AM Activity, a cult-like group that claimed contact with “Ascended Masters”—mythical beings said to congregate inside Mt. Shasta. The Ballards preached that you could heal anything, even incurable diseases, through the power of positive thinking and divine energy.

Their product lineup included things like the “violet ray” device, marketed as a miracle cure for everything from blindness to cancer. And followers didn’t just donate money—they offered what the Ballards called “I AM love gifts”. The couple got rich. Really rich. We’re talking luxury cars, jewel-draped outfits, and a mansion in Los Angeles’ Griffith Park.

I found out about the Ballard case though investigative journalist , whose book The Blazing Eye Sees All described how the Ballards built a massive mail-order empire rooted in belief-based commerce. The Department of Justice, however, wasn’t buying it. They charged the Ballards with fraud, citing 18 specific cases where the couple made false medical claims.

But here’s the twist.

When the case reached the Supreme Court, the majority ruled that the truth or falsity of religious beliefs was not for the courts to decide. The only legal question was whether the Ballards “sincerely” believed what they were preaching. If they did, they were protected under the First Amendment—even if what they sold was utter nonsense.

Books:
⁠The Wedge⁠
https://www.scottcarney.com/the-wedge

⁠What Doesn’t Kill Us⁠
https://www.scottcarney.com/what-doesnt-kill-us

⁠The Enlightenment Trap⁠
https://www.scottcarney.com/the-enlightenment-trap

The Vortex
https://www.scottcarney.com/the-vortex

The Red Market
https://www.scottcarney.com/the-red-market

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