Douglas McKellor, an American national and once a disciple of Swami Nityananda, has registered a case with California State Attorney General against the self-proclaimed godman.
In his complaint, McKellor has accused Nityananda of sexually exploiting the devotees at the ashram, fraud and financial irregularities.
A resident of San Jose in California, McKeller came in contact with Nityananda in 2007.
Influenced by the swami, McKellor changed his name to Swami Nityaprabha and later became the head of the California branch of Dhyanapeetham.
Describing how he got conned by Nityananda, McKeller, in his complaint, said, "I was in the first batch that enrolled for Nityananda's week-long instant enlightenment programme.
It was held at the Los Angeles ashram in June 2007, where I paid swami a fee of $400,000 for the workshop and the enlightenment certificate."
McKeller added, "During the workshop, I felt abnormally lightheaded. It was like as if some strange drug was causing me lose all my senses.
Nityananda performed some fire rituals and asked us to cut a strand of our hair. Then, he put the hair in fire along with something that looked like marijuana seeds.
After the workshop, he issued certificates to everyone claiming that we had attained enlightenment."
McKeller also accused Nityananda of sexually exploiting his American devotees. "Nityananda was fond of pretty girls.
While he was at Sanatan Dharma temple in Norwalk, California, for a two-day workshop on spirituality, he asked me to stand outside the door to ensure no one disturbed him, while he was with female guests," he said in his complaint.
He was reportedly fond of striptease parties with pretty girls.
McKellor added that Nityananda used to eat his meals and rest with young girls in his private quarters at the cult organisation's Norwalk and Montclair ashrams.
The swami had named attractive girls 'flowers' and used to say that they are a must item for his puja.
H S Chandramouli, Nityananda's advocate, confirmed that a complaint has been filed by McKeller. "Those close to swami are discussing about the plan of action. However, noting has been decided yet," said Chandramouli.