Here Are the Details of the Canadian Lawsuit Against Gospel for Asia

Today I received the “Notice of Action” brief filed Tuesday against Gospel for Asia by plaintiff Greg Zentner of Nova Scotia, Canada. The class action suit alleges GFA breached their fiduciary duty to donors, defrauded donors, made negligent misstatements to donors, and “civilly conspired to misrepresent the nature of the donations collected from the class and the use to which they would be put.”

The plaintiff, on behalf of GFA donors in Canada, seeks financial damages in the following ways with interest:

return of $20,000,000.00 in funds misdirected to GFA USA;

damages for the defendant’s unlawful actions for the misuse of donor funds in excess of $100,000,000.00, or such other sum as this Honourable Court may find appropriate;

punitive damages of $50,000,000 or such other sum as this Honourable Court may find appropriate;

The overview of the suit claims:

Thousands of well-intentioned Canadians were duped into collectively donating tens of millions of dollars to an international fundraising syndicate operating in Canada known by a variety of names including as Gospel for Asia, Gospel for Asia Canada, GFA, and, later, as GFA World. The donors were convinced by the representations of the Defendants that 100% of donations designated for use in the field would be used in the field, and that their donations would be used for specific charitable purposes to help the poorest of the poor in India. Instead, the funds were converted by the Defendants for their own use, including for the construction of a luxurious compound and personal residence in Texas, USA. In this action, the Canadian donors seek to recover these donations that were collected through fraud or misrepresentation.

Read the entire lawsuit here

In Murphy v. GFA, GFA said that Canada was the source of funds for the $20-million which capped off the compound building project. GFA leaders lied to their staff, followers, and accountant by first saying that an anonymous donor sent the money. Then they covered that story by saying an Indian entity of Believers’ Church gave the money to them. Then during the court proceedings, a GFA lawyer said the funds came from Canada.  To the ECFA, GFA said the funds were restricted funds that they used to pay for the headquarters’ construction and then paid back. Sorting out this convoluted story will be part of this lawsuit since plaintiff Zentner wants the $20-million returned to Canadian donors.

One of the key facts of the case relates to the absence of Canada as a source of donations to GFA/Believers’ Church in Indian charity reports for an eight year period from 2007-2014. In Canadian charity reports, over $94-million was donated to GFA to go to India during that time period, but during the same period, Indian public documents show no money coming from Canada. GFA spokesman Johnnie Moore evaded that question in a recent CBC interview, but GFA won’t be able to do so in court.

Class Action Suit Filed in Canada Against Gospel for Asia

This morning Nova Scotia pastor Bruce Morrison wrote to say that an elder in his church has filed a class action fraud lawsuit against Gospel for Asia. The CBC has a news item about it in print and on radio.

The plaintiff is Greg Zentner and he alleges that $100-million in donations didn’t end up where the donors wanted it to go. Marc Stanley is one of lawyers involved. He was the lead council in the case that was settled for $37-million in the U.S.

GFA is on the defensive against an earlier CBC broadcast documentary which featured an interview with GFA spokesman Johnnie Moore. Moore dodged questions posed by the CBC and failed to account for discrepancies in documents filed in Canada and India.

I Don’t Believe Most of What Johnnie Moore Said in His CBC Interview About Gospel for Asia

In his interview with CBC reporter Angela MacIvor, Gospel for Asia spokesman Johnnie Moore justified the diversion of funds to Believers’ Church Medical College Hospital by saying there are no other hospitals in the area for “many miles.” This and nearly everything else Moore said in his interview requires scrutiny. I started that activity last week and this week, I turn my attention to the rest of the interview.

In this interview, MacIvor asked Moore why some of the funds donors gave for poor people went to build a state of the art hospital in Kerala (first reported here). In response, Moore said:

It was all happening. It was all happening. They were building hospitals, the hospital that you are referencing, I’ve been to it. I’ve walked around it. I’ve sat down with people being cared for in the hospital. I’ve sat with the director of the hospital. I’ve seen the gigantic statue of Jesus in the center of the hospital, and by the way, that hospital is the only hospital of its kind within a very long distance. I mean people come from all over that part of India to get great health care for themselves. Not only that, by the way, you know they’re training doctors and nurses to serve other people all across the country. You know, this is an organization that has always talked about providing healthcare and educating people and so they’re doing it, they’re doing it. And while they’re doing it, they’ve also provided goats and wells and medicine and literacy training.

There are problems here.

Moore said: “that hospital is the only hospital of its kind within a very long distance.”

Not true. There are at several other comparable hospitals within 30 miles of Believers’ Church Medical College Hospital. One, the Tiruvalla Medical Mission Hospital is a modern state of the art facility with a location only 3.4 km away (about a 9 minute drive) (see the image below).

St. Ritas Hospital is 10 minutes away. St. Thomas Hospital is about 22 minutes away. Each has a nursing school and other medical training. There are numerous specialty clinics in the vicinity as well (heart, dental, etc.). Since Moore says he has been there, it seems like he should know that.

Moore added: “Not only that, by the way, you know they’re training doctors and nurses to serve other people all across the country.”

I am sure that the school does train doctors and nurses but Moore makes it seem as though there is a shortage of medical training in India. That is not true. According to this list, there are three other medical colleges in the same district (Pathanamthitta) of the state of Kerala as Yohannan’s. About 1.2-million people live in the district which covers just over 9 square miles. In the state of Kerala (the size of New Hampshire and Connecticut combined), there are 36 medical colleges with 2 more planned.

Moore: “I mean people come from all over that part of India to get great health care for themselves.”

While that may be true, they have to pay for it. Moore said there isn’t another hospital of its kind in the area, but the Believers’ Church hospital found one about 30 minutes away to send a poor patient to according to the Deccan Chronicle report.

A patient  suffering from breathing difficulty,  who was shifted from a private hospital at Thiruvalla to the MCH [Government Medical College Hospital] here on Wednesday,  had to wait in the ambulance  for over four hours due to the lack of a spare ventilator in the MCH.  The doctors at the private hospital had told the relatives of the patient that medical colleges will have ventilator facility all the time. The plight suffered  by the   patient,  N.K. Saaidharan Pillai, 58, of Pandalam,  was explained to DC  by his daughter Salini on Friday.

Pillai, who had breathing difficulty due to a neurological deficit, was undergoing treatment at the Believers Church hospital at Thiruvalla. However, he was shifted to the Kottayam medical college hospital  on Wednesday as the family could not afford the huge expenses. Salini  said that the doctor who administered treatment to her father at the Thiruvalla hospital told her  that the MCH will have a full- time ventilator facility.   “He told us that there was no need to ring up the MCH about arranging a ventilator,”  she said.

This man couldn’t afford the care at Believers’ Church. Despite the millions given by donors to help poor people in India, this man could not get medical care at a facility that those foreign donations helped build. Does this look like the picture Johnnie Moore was painting?

The Deccan Chronicle report gives a hint that this patient wasn’t the only one dumped on the government hospital. The article concludes:

Meanwhile Winnie Elizabeth Johnson, PRO of the Believers Church hospital told DC that while the hospital authorities used to call them previously, since the MCH authorities used to come up with excuses against assurance regarding the ventilator facility citing increase in patient arrivals, they had stopped calling them anymore.

Apparently, Believers’ Church had been shipping so many patients to the MCH that MCH was coming up with reasons not to take them. Now Believers’ Church Hospital just dumps them. For some reason, she thought that was okay to admit.

Moore concluded: “this is an organization that has always talked about providing healthcare and educating people and so they’re doing it…”

This is a big part of the dispute between donors and GFA. In fact, GFA did not talk about building a hospital and that is the problem. Donors never heard about a hospital and when I first started covering GFA, it was scandalous that such a huge amount of money in fiscal year 2014 (over $14-million) of foreign donations went to the construction and maintenance of the hospital. There were no appeals for funds to build a hospital. It just appeared.

So no, GFA didn’t talk about building a hospital and ask for funds to do it. If Johnnie Moore can find an appeal and document a U.S. campaign in 2012-2014 to build the Believers’ Church Medical College Hospital, I would like to see it.

Apparently, former GFA COO David Carroll didn’t know about it either because he sent a nervous email to K.P. Yohannan after Bruce Morrison and I started asking questions about the Indian public documents (FC-6 Reports). Moore said in the interview that GFA contested the accuracy of those documents. However, David Carroll, GFA’s COO at the time, did not contest them. Here is what he said to K.P. Yohannan in early 2015 in an email reveal during the RICO court case:

Sir, I need to share with you where I am over this situation. I will try to summarize for brevity sake. We have a saying in our country: The numbers don’t lie. The published FC-6 reports show westerners that we have either sent money to the field raised for National Ministries and Bridge of Hope to fund the hospital and the corpus fund, or our FC-6 filings are filed wrong.

Either way, this is a huge problem. It appears to those reading these that we might have been dishonest to the donors (fraud), or been dishonest to the Indian government, (a PR nightmare at least). Sister Siny’s report below will, in my opinion, do little to satisfy those who are printing out and analyzing our FC-6 reports. I am sorry for not expressing more confidence than this. I think we may have used money raised for National Ministries and Bridge of Hope for the hospital.

I think that India feels that we raise money and send it. I think that India feels that we raised money and sent it to them and they can legally use it any way they deem fit. I hope that I am wrong, but I am doubtful. I also don’t think that it is an intentional wrong, but if I am correct, it is a huge wrong. We’ve spoken at hundreds of churches with tears asking for the National Ministries and Bridge of Hope support, and the FC-6 that is public says that we sent much of that money for the hospital and the reserve corpus funds.”

Yes, the money went “to the field” but David Carroll here in the privacy of this email is lamenting that Believers’ Church — which is run by K.P. Yohannan — spent funds meant for ministry to poor people on the hospital and to stock a reserve fund.

An Indian tax court document confirmed the transfer of funds in December 2014. According to the court filing:

…the assessee [Believers’ Church] advanced funds to BCMET [a trust to build the hospital] for construction of hospital building. BCMET is also a registered trust u/s 12AA of the Act. The ld.representative further submitted that Carmel Education Trust also a registered charitable trust u/s 12A of the Act was given funds by the assessee to carry out their charitable activities.

That same court opined that Believers’ Church and GFA used funds inappropriately:

 It is not in dispute that substantial income of the assessee trust was not used by both the assessees for the purposes for which they were formed.

I don’t know if Angela MacIvor will get another chance to interview Mr. Moore. I hope so. I also hope U.S. media will follow up on the CBC documentary and bring more light to GFA.

 

 

 

SEC Brings Charges Against Mark MacArthur

Mark MacArthur, son of John MacArthur and board member of MacArthur’s Grace to You ministry, has been charged by the Securities and Exchange Commission of engaging in a scheme to defraud clients over a three year period from 2014 to 2017. According to the complaint, MacArthur and his partner, Robert Gravette, failed to disclose a costly conflict of interest:

Defendants Criterion Wealth Management Insurance Services, Inc. (“Criterion”), Gravette, and MacArthur were investment advisers. They owed their clients – who entrusted them with the discretionary management of their money – a fiduciary duty to act with loyalty, fairness, and good faith. This civil enforcement action arises from defendants’ breach of their fiduciary duty when failing to disclose a glaring conflict of their financial interests with those of their clients. From the spring 2014 through the summer 2017, defendants recommended that their advisory clients invest more than $16 million in four private placement funds, without disclosing that the fund managers for these investments had paid them more than $1 million in side compensation – income on top of the fees that defendants were already charging their clients directly.

For two of the private placement funds, the undisclosed  compensation that defendants received reduced the investment returns that defendants’ advisory clients would have otherwise received. Defendants kept their clients in the dark as to all these material facts and, in doing so, they violated their fiduciary duty and defrauded their advisory clients.

Read the SEC Complaint

According to the complaint, MacArthur and Gravette (both The Master’s University graduates) worked with another TMU graduate at a separate company to construct a scheme which allowed Criterion to pocket fees which should have gone to Criterion’s clients. The SEC claims MacArthur and Gravette failed to disclose the terms of investing to clients which put those clients at a disadvantage and depressed their investment returns.

It is not stated in the complaint which clients received the lower returns or if any of the entities controlled by the MacArthurs were involved as investment clients.

Gospel for Asia Offers Secret Meeting to Selected Donors

Gospel for Asia is apparently going to expand operations. In a solicitation to selected donors, GFA is offering to bring them in to hear about (and no doubt financially support) some new work. Here it is:

GFA is marketing into a storm of bad publicity including a recent CBC radio documentary which raises the issue of $94-million listed in Canada as having gone to India but without any record of it showing up in India.

The secrecy is par for GFA’s course. They have not issued an audited financial statement since 2013 and refuse to disclose how donations to India are getting into the country. GFA and Believers’ Church lost their charity registration there in 2017, but GFA in the U.S. has never informed donors about that and keeps raising money. I would like to see the CBC’s Angela MacIvor ask Johnnie Moore about that.