A Paris court has fined the French branch of the Church of Scientology a total of €600,000 after finding it guilty of fraud but allowed the group to continue operating in France.
When the hearing opened, there were expectations that the court could order the group to be banned in France but legislation passed in parliament just before the start of the trial in May, ruled that option out.
The legislation has since been changed back to allow the dissolution of an organisation found guilty of fraud but because of the timing of the case, there was no question of forcing the Church of Scientology to be wound up.
"It is very regrettable that the law quietly changed before the trial," Georges Fenech, head of the Inter-ministerial Unit to Monitor and Fight Cults, told television station France 24.
"The system has now been put in place by parliament and it is certain that in the future, if new offences are committed, a ban could eventually be pronounced," he said.
The court handed down suspended prison sentences ranging from 10 months to two years and fines of €5,000 to €30,000 to four leaders of the group in France.
"This is an important and historic decision because it is the first time that Scientology has been found guilty of involvement in organised fraud," Olivier Morice, one of the lawyers for the civil parties to the case told reporters.
The case was brought by two former members who said they were cajoled into spending €21,000 and €49,500 on personality tests, vitamin cures, sauna sessions and "purification packs".
Scientology, which is officially considered a sect in France, denies fraud and is expected to appeal.
Registered as a religion in the United States, with celebrity members such as actors Tom Cruise and John Travolta, Scientology enjoys no such legal protection in France, where it has faced accusations of being a money-making cult.
The trial, which began on May 25th, centres on complaints made in the late 1990s.
The prosecutor had recommended that the Paris court dissolve the church's French arm.
Scientology has faced numerous setbacks in France, with members convicted of fraud in Lyon in 1997 and Marseille in 1999. In 2002, a court fined it for violating privacy laws and said it could be dissolved if involved in similar cases.