Has anyone else ever been confronted with this kind of problem?

An instructor in my area is calling on the demons, according to some of his students he has them meditate away from the light and into the dark to bring the power of the demons to them. Telling them after a certain level of training that it is the only way they can continue their training under him and it is the only way of reaching their true potentials.

When things like this get out, and it did in my comunity, it turns people away from Martial Arts thinking we all do the same things. The # of people who would inquire about class dropped off considerably when some of his students started talking about what was going on.