When does someone who's selling services as a "psychic" deserve to be prosecuted for committing a crime?

In NYC, the government prosecuted a fortune teller — Sylvia Mitchell, 39 — who worked in some storefront in Greenwich Village. The jury convicted her and she could be sentenced to as much as 15 years in prison. The charges were larceny and a scheme to defraud.

During a weeklong trial, prosecutors portrayed Ms. Mitchell as a clever swindler who preyed on distraught people, promising them that she could alleviate their troubles through prayer and meditation to remove what she called “negative energy” and rectify problems that arose from their “past lives.”

In my book, this is entertainment and unconventional psychological therapy. Let the buyer beware. Who's dumb enough to actually believe this? Should the government endeavor to protect everyone who succumbs to the temptation to blow a few bucks on a fortune teller? But this was a case where there were a couple victims who somehow had enough money to make their losses nontrivial. One woman gave Mitchell $27,000 in what was portrayed as an "exercise in letting go of money." Another put $18,000 in a jar as a way to relieve herself of "negative energy."

Both women admitted on the stand under cross-examination that they were deeply skeptical of Ms. Mitchell’s techniques, but paid her anyway, suggesting that they were never tricked into thinking the psychic had the power to better their lives, [Mitchell's lawyer] said.

But an assistant district attorney, James Bergamo, described Ms. Mitchell as an expert at discovering people’s vulnerabilities and scaring them into handing over their cash. It mattered little, he argued in his summation, if Ms. Mitchell’s clients believed what she said about their past lives or negative spirits: the important fact was that they believed she would return their money. “The facts scream scam,” he said.

In Stupid World, no one can hear facts screaming. 

Here's the classic U.S. Supreme Court case on when unbelievable beliefs can form the basis for a criminal prosecution for fraud: United States v. Ballard. The majority opinion — written by William O. Douglas — says the question needs to be whether the criminal defendant actually believed his own bullshit. (The defendants were faith healers.)

Men may believe what they cannot prove. They may not be put to the proof of their religious doctrines or beliefs. Religious experiences which are as real as life to some may be incomprehensible to others. Yet the fact that they may be beyond the ken of mortals does not mean that they can be made suspect before the law. Many take their gospel from the New Testament. But it would hardly be supposed that they could be tried before a jury charged with the duty of determining whether those teachings contained false representations. The miracles of the New Testament, the Divinity of Christ, life after death, the power of prayer are deep in the religious convictions of many. If one could be sent to jail because a jury in a hostile environment found those teachings false, little indeed would be left of religious freedom. The Fathers of the Constitution were not unaware of the varied and extreme views of religious sects, of the violence of disagreement among them, and of the lack of any one religious creed on which all men would agree. They fashioned a charter of government which envisaged the widest possible toleration of conflicting views. Man's relation to his God was made no concern of the state. He was granted the right to worship as he pleased and to answer to no man for the verity of his religious views. The religious views espoused by respondents might seem incredible, if not preposterous, to most people. But if those doctrines are subject to trial before a jury charged with finding their truth or falsity, then the same can be done with the religious beliefs of any sect. When the triers of fact undertake that task, they enter a forbidden domain.

Justice Jackson, dissenting, thought it was wrong even to ask whether the defendant believes his own purported beliefs. I'm wracking my brain for a judicial opinion I love more than what Jackson says here, and I can't think of one, so let me give you the whole thing, replete with my boldface and commentary:

I should say the defendants have done just that for which they are indicted. If I might agree to their conviction without creating a precedent, I cheerfully would do so. I can see in their teachings nothing but humbug, untainted by any trace of truth. But that does not dispose of the constitutional question whether misrepresentation of religious experience or belief is prosecutable; it rather emphasizes the danger of such prosecutions.

Jackson confesses to the temptation to jump to what feels like the right outcome in this case, but he pulls back into the proper judicial role of following rules that should apply across the board.

The Ballard family claimed miraculous communication with the spirit world and supernatural power to heal the sick. They were brought to trial for mail fraud on an indictment which charged that their representations were false and that they 'well knew' they were false. The trial judge, obviously troubled, ruled that the court could not try whether the statements were untrue, but could inquire whether the defendants knew them to be untrue; and, if so, they could be convicted.

I find it difficult to reconcile this conclusion with our traditional religious freedoms.

In the first place, as a matter of either practice or philosophy I do not see how we can separate an issue as to what is believed from considerations as to what is believable. The most convincing proof that one believes his statements is to show that they have been true in his experience. Likewise, that one knowingly falsified is best proved by showing that what he said happened never did happen. How can the Government prove these persons knew something to be false which it cannot prove to be false? If we try religious sincerity severed from religious verity, we isolate the dispute from the very considerations which in common experience provide its most reliable answer.

In the second place, any inquiry into intellectual honesty in religion raises profound psychological problems. William James, who wrote on these matters as a scientist, reminds us that it is not theology and ceremonies which keep religion going. Its vitality is in the religious experiences of many people. 'If you ask what these experiences are, they are conversations with the unseen, voices and visions, responses to prayer, changes of heart, deliverances from fear, inflowings of help, assurances of support, whenever certain persons set their own internal attitude in certain appropriate ways.' 

The quote, the footnote says, can be found in James's "Collected Essays and Reviews," and Jackson would also like us to read James's "Varieties of Religious Experience" and "The Will to Believe" as well as Burton's (delightfully titled) "Heyday of a Wizzard." (Those last 2 links will get you to free Kindle editions.)

If religious liberty includes, as it must, the right to communicate such experiences to others, it seems to me an impossible task for juries to separate fancied ones from real ones, dreams from happenings, and hallucinations from true clairvoyance. Such experiences, like some tones and colors, have existence for one, but none at all for another. They cannot be verified to the minds of those whose field of consciousness does not include religious insight. When one comes to trial which turns on any aspect of religious belief or representation, unbelievers among his judges are likely not to understand and are almost certain not to believe him.

And then I do not know what degree of skepticism or disbelief in a religious representation amounts to actionable fraud. James points out that 'Faith means belief in something concerning which doubt is theoretically possible.' 

The quote is from "The Will to Belief."

Belief in what one may demonstrate to the senses is not faith. All schools of religious thought make enormous assumptions, generally on the basis of revelations authenticated by some sign or miracle. The appeal in such matters is to a very different plane of credulity than is invoked by representations of secular fact in commerce. Some who profess belief in the Bible read literally what others read as allegory or metaphor, as they read Aesop's fables. Religious symbolism is even used by some with the same mental reservations one has in teaching of Santa Claus or Uncle Sam or Easter bunnies or dispassionate judges. 

That's the best subtly-tucked-away little joke in all of the Supreme Court reporters: dispassionate judges. 

It is hard in matters so mystical to say how literally one is bound to believe the doctrine he teaches and even more difficult to say how far it is reliance upon a teacher's literal belief which induces followers to give him money.

There appear to be persons—let us hope not many—who find refreshment and courage in the teachings of the 'I Am' cult. If the members of the sect get comfort from the celestial guidance of their 'Saint Germain,' however doubtful it seems to me, it is hard to say that they do not get what they pay for. Scores of sects flourish in this country by teaching what to me are queer notions. It is plain that there is wide variety in American religious taste. The Ballards are not alone in catering to it with a pretty dubious product.

You see what the danger is: discrimination against little-known and little-appreciated religions. If you start going after the scams, when will you stop? It is better not to start at all. Leave them all alone.

The chief wrong which false prophets do to their following is not financial. The collections aggregate a tempting total, but individual payments are not ruinous. I doubt if the vigilance of the law is equal to making money stick by over-credulous people. But the real harm is on the mental and spiritual plane. There are those who hunger and thirst after higher values which they feel wanting in their humdrum lives. They live in mental confusion or moral anarchy and seek vaguely for truth and beauty and moral support. When they are deluded and then disillusioned, cynicism and confusion follow. The wrong of these things, as I see it, is not in the money the victims part with half so much as in the mental and spiritual poison they get. But that is precisely the thing the Constitution put beyond the reach of the prosecutor, for the price of freedom of religion or of speech or of the press is that we must put up with, and even pay for, a good deal of rubbish.

Prosecutions of this character easily could degenerate into religious persecution. I do not doubt that religious leaders may be convicted of fraud for making false representations on matters other than faith or experience, as for example if one represents that funds are being used to construct a church when in fact they are being used for personal purposes. But that is not this case, which reaches into wholly dangerous ground. When does less than full belief in a professed credo become actionable fraud if one is soliciting gifts or legacies? Such inquiries may discomfort orthodox as well as unconventional religious teachers, for even the most regular of them are sometimes accused of taking their orthodoxy with a grain of salt.

I would dismiss the indictment and have done with this business of judicially examining other people's faiths.

He's right.