Believers Eastern Church and K.P. Yohannan Use Indian Law to Attack Critic

While using a defamation lawsuit to attack critics didn’t work well for Harvest Bible Chapel, it may have a different result in India for K.P. Yohannan and Believers Eastern Church.

According to this The Hindu article, The Believers Eastern Church is behind a charge of defamation which led to the arrest of a longtime critic of the church and Yohannan.  Anush Solomon Joy, aka Solomon Samaritan was arrested and then posted bail after being accused of defamation and attempted blackmail. Over the years, Anush has contacted me as well as GFA former employees with various concerns about GFA. He has published a rather fantastical booklet alleging satellite and microwave attacks.

My impression has always been that the gentleman isn’t making serious or credible attacks  and that he shouldn’t be considered a threat to Yohannan. That the church is taking on someone who has no following and isn’t taken seriously is surprising and disturbing.  Microwaves aside, perhaps Mr. Anush has stumbled on to something and should be given a second look.

Gospel for Asia is Encouraging People to Donate Settlement Funds Back to GFA

As a part of the settlement in fraud case Murphy v. Gospel for Asia, GFA agreed to set aside $37-million in a Settlement Fund to provide relief for donors as well as cover court costs and attorneys’ fees. GFA also agreed to have plaintiff Murphy join GFA’s board. Murphy and GFA will also work together to designate a replacement for K.P. Yohannan’s wife who will go off of the GFA board. GFA agreed not to appoint any other relative of Yohannan to the board.

The mission organization also agreed to comply with Evangelical Council for Financial Accountability guidelines and seek readmission to membership. GFA was kicked out of the ECFA in 2015 and has never requalified for admission.

Read the Settlement Agreement

In the mean time, GFA is seeking to get some of the settlement money back via donors. The email below comes from a current staff member who asks supporters to seek the funds and redonate them to GFA. Although this is meant to sound spontaneous and individualized, I have gotten word that the same appeal has gone out from several staff members. I can’t corroborate all of the claims in the email except those which are a part of the settlement. Here is the appeal:

Dear friends,

I come to you this morning, not in any official capacity or representing anyone else, but expressing my own thoughts as someone who loves and supports Gospel for Asia. I am writing to you about a matter of tremendous importance, for which I request your prayers.

I am sending this communication to all those on my regular prayer email list plus a few others that I thought would benefit to hear this.

As you may know, GFA has been embroiled in a class action lawsuit for the last three years alleging that the ministry has misdirected funds that people donated to the mission field. If you donated to the field any time in the last 10 years, then you are part of the class and you should have recently received a notice from the court informing you about the settlement of this lawsuit and your part in it.

So what does this settlement mean to you and to me? First, some background.

For over three years now, GFA has been in a legal battle to survive this lawsuit, and yet it has not even come to trial. In addition to the immense burden on GFA of carrying on its defense, paying for legal representation, and supporting the onerous demands of the court and plaintiffs for information, the lawsuit has repeatedly been used as fodder for a far-reaching negative public relations campaign which has greatly damaged the reputation and ministry of GFA.

As a consequence, despite having the evidence to demonstrate that “all funds designated to the field were sent to the field and used for ministry purposes” GFA has agreed to settle the lawsuit out of court. As GFA says in its official statement here, “The agreement to settle was, in part, precipitated by a concern that the ministry could continue to bear the weight of defending itself.”

The settlement means that, in return for the lawsuit being dropped and never renewed, GFA must pay 37 million dollars. There is a bit more to it than that of course, but essentially it comes down to money—1/3rd of which (about 12 million dollars) goes to the trial lawyer. You can read One donor’s analysis of the GFA Class Action Settlement for a summary of what the settlement means, or read the 45 pages of legalese in the settlement itself here. GFA also has an official FAQ.

You might well be asking, “If GFA is an organization which primarily exists to connect the American church to the work of believers in Asia, how does it have 37 million to pay this settlement?” The answer: GFA doesn’t have it. GFA’s field partners in Asia have decided to use their locally-raised funds to cover about two-thirds of the settlement cost, and GFA has twelve months to raise the remaining 11 million, none of which will come from donations to the work on the field. If GFA doesn’t come up with the 11 million before the end of that twelve months, it forfeits it’s security collateral—GFA’s International Headquarters campus in Wills Point, TX.

So what does the settlement mean to you and me? The 25 million dollars that remains of the settlement (after the trial lawyer’s cut) is where you and I come in. This money is designated for what is called “Settlement Relief” of the class members. Each of us in the class may claim up to 100% of the amount we donated to work on the field through GFA. Or we can claim nothing, and none of that money will come to us. Any money that is unclaimed after the claim deadline will be divided up by the court between five ministries: Samaritan’s Purse; Friends of Israel; Global Training Network; Heaven’s Family; and Christ for All Peoples. Regardless of whether anyone makes a claim against the settlement fund, GFA will still have to pay the full amount of the settlement.

This brings me to my decision about my response: Because I strongly disagree with this lawsuit and what it represents, because of the great burden it has placed on GFA without any determination of wrongdoing, and because I want to do what I can to help God’s work continue in Asia, ______ and I have submitted our claim in this settlement for 100% of what we are eligible to claim. I plan to take all the money I can from my claim, minus an amount I will need to set aside for taxes, and donate it back to GFA to their general fund to help cover the 11 million dollars it has to raise for the settlement.

If you are also part of the “class,” will you ask God whether He would have you to do the same? And whether or not you are part of the class, will you please join me in praying that God will work a mighty deliverance for His people and for the work of the gospel?

To make your claim, all  you have to do is go to this link and fill out the online form. You don’t even have to know how much you are eligible to claim, the settlement administrator already knows that. You will need your “Class Member ID” which is in the settlement notification that you received by email or by postcard.

Regardless of what you decide to do, I hope this information has been useful to you. If you have questions, feel free to email or call me and I will answer to the best of my ability. And if you have found this email helpful, please forward along to anyone else you know who has donated to GFA and you believe might benefit from the information.

And finally, please pray that God will be glorified in this situation, and His will be done. I know that God is mighty and is in control. Many of the Psalms have taken on fresh life and relevance for me over the last couple years.

Those who hate me without reason
outnumber the hairs of my head;
many are my enemies without cause,
those who seek to destroy me.
I am forced to restore
what I did not steal.

(Psalm 69:4)

Trust in him at all times, O people;
pour out your heart before him;
God is a refuge for us.          Selah

(Psalm  62:8)

If this was written by a staff person, I would guess they work in public relations. I suspect more that this was written for staff by someone hired by GFA.

Clever strategy but I doubt that this is what the court intended. I should add that the settlement isn’t final as yet. It won’t be until June 13 when the Final Settlement Hearing is held. I don’t know if this kind of action by GFA could put the settlement in jeopardy.

It is obvious that GFA’s leaders are unconcerned about any of the issues raised by the ECFA in 2015 or Murphy v. GFA. Despite being chastised multiple times by a federal judge and having to settle this case with a monetary settlement and by giving up a board seat to Dr. Murphy, they have taken no responsibility and show no humility or contrition.

Right now, there are food pantries in every town in America which need funds to keep going. If you donated funds to GFA, consider recovering those funds to help people who need essentials.

If you want to give to something more exotic, consider the Schistosomiasis Control Initiative. The SCI helps protects children from parasitic worms which helps to decrease rates of malaria and HIV transmission. Benefits include improvements in neurological function and overall health. Survival chances increase dramatically when simple and cheap treatments are implemented.

Whatever you do, ask questions. GFA spins and promotes well but they don’t answer questions. For instance, numerous times I have asked, as have others, how they are getting funds into India since they lost their registration as a charity. The only answers given to others have all been false or misleading.

Gospel for Asia Class Action Suit Claims Process is Now Open

I just saw the following notice which is relevant to donors to Gospel for Asia. The claims process for the $37 million settlement in Murphy v. GFA is now open.

Pursuant to the proposed class action settlement with Gospel for Asia (and the individual defendants), the claims process is now open. Class members should have received individual notice by mail and/or email from the Settlement Administrator, Heffler Claims Group.

Filing a claim is simple – either:
1. Complete and return the Official Claim Form included with the Notice; or
2. File your claim online at www.gfaclassaction.us

Both ask you to agree or disagree with the list of donations (provided to the Settlement Administrator from GFA) on the website. To review the list, click on the “Donations List” tab on the website and insert your Class Member ID (found on your claim form). If you cannot find your Class Member ID, you may contact the Settlement Administrator using the appropriate prompts on the website.

Importantly, the claim deadline is July 11, 2019.

Should you have any questions, you may contact the Settlement Administrator at (844) 367-8894.

Funds may be recovered via this action and donated to another organization. If you need a reminder of the problems at GFA, please see this post (and this one) and re-read the report of the Evangelical Council for Financial Accountability. Remember that the ECFA removed GFA from membership in October 2015 due to multiple violations of financial standards. GFA promised to seek reinstatement. However, it is now 2019 and GFA still has not done so.

Gospel for Asia’s Headquarters Funded by Canadian Donor Funds – Guest Post by Bruce Morrison

Bruce Morrison is a pastor in Nova Scotia, CA and a former Gospel for Asia supporter. In recent years, he has actively sought to bring to light GFA’s practices regarding fund raising and spending.

In this guest post, Morrison documents and describes the path of funds from Canadian donors to India and then the Wills Point, TX where they were spent to complete the GFA headquarters. The routing of money from Canadian donors who thought they were spending money to help poor India people to the Wills Point campus should be of interest to Canadian authorities. It makes me think that the source of funds to pay the court settlement will likely come from Canadian donors. Thanks to Rev. Morrison for this analysis.

…………………………………………..

Bland Garvey CPA, from Richardson, TX, was the accounting and auditing firm that prepared the financial statements for GFA-US in 2013.  In their audit notes they stated that $19.8 million was received from an anonymous donor to help fund the construction of the new GFA head office complex in Wills Point, TX. Later, it was disclosed that this money did not come from an anonymous donor, but instead came from Believers Church in India.  Apparently, the auditors did not research the validity of what they had been told by GFA as one would expect, especially given the large amount of money involved.

The idea that money sent to India designated to spread the gospel and help the poor was later returned to the US for an expensive building project was disturbing to donors who learned of this.

Three years passed.  In a US federal court hearing with plaintiffs Garland and Phyllis Murphy versus GFA defendants, a new and surprising revelation came to light. The $19.8 million for the US building project did not come from India – it came from Canada!

The court hearing took place on May 16, 2017.  On Pg. 32 of the hearing transcript, Judge Timothy Brooks referred to the $20 million that came from GFA-India and the plaintiff’s claim that this money was donor restricted, diverted away from donor’s intents, without donor’s knowledge, and was therefore used fraudulently.

In response, to assure the Court that US funds were not misappropriated, Robert Mowrey, lawyer for the defendants, on page 32, lines 4-19, stated:

The documents – – your Honor, this gets a little complicated, but the documents we have provided to the plaintiffs show that the $20 million did not come from any US donors.  This was $20 million that GFA-India had.  It was their money.  It was sitting in an account in Canada.

There were Canadian donors who had given this money to GFA-India to be used in various     purposes.  GFA-India directed that money to be given for the campus and then GFA-India fulfilled requests, the specific requests from internal money in GFA-India to replenish the Canadian account.

The bottom line here is that – – and I don’t know if the Court followed that but the bottom   line here is that none of the $20 million came from any  US donors.

To this the judge replied:

Well, it says in the second sentence that GFA staff confirmed that the funds relating to this donation were originally received by GFA as gifts restricted for the field.

Thus, Mr. Mowrey attempted to avoid allegations of fraud by saying that US-donor money was not used to help fund the new GFA head office. The judge did not agree and contended that even if the $20 million came from Canadian donor-restricted funds they were still – donor restricted!  In other words, fraudulent use by GFA-US of Canadian funds was equally as fraudulent as if the money came from US donors.  For the judge, the country of origin was not an issue.

As incredible as it seems, the lawyer for GFA implied that GFA-US did not defraud US donors, only Canadian donors – as if to say Canadian donors didn’t matter – it’s OK to cheat Canadians!

It is amazing beyond words that unsuspecting Canadians gave close to $20 million USD to help build an elaborate GFA complex in the USA, all the while believing their donations were spent in India.

The idea that GFA-India money sent from Canada was later replenished by GFA-India in India is absurd.  Why not send the money to the US directly from India in the first place?  Even if GFA did replenish the Canadian fund, it would still mean that Canadian donor money was not used as donors intended.

More Evidence of Possible Canadian Violations

Later, at a February 16, 2018 hearing, evidence was given that GFA World in Canada possibly breached laws set forth in the Criminal Code of Canada on many counts and might also be guilty of non-compliance with several CRA regulations.  (GFA World was formerly known as GFA-Canada.)

On page 62, reference is made to GFA’s Indian bank account. Deposits to this account were made from GFA-Canada’s main bank account at a Royal Bank of Canada (RBC) in Hamilton, Ontario, and from there large sums were transferred into an “Indian account” which, in fact, was not located in India, but was actually just a separate account in the same RBC bank.  GFA falsely led donors to believe that their donations had gone to India and were used for the reasons the gifts were given.  The truth was exactly opposite to their claim – the money was still in Canada.

Also on page 62 of the transcript, reference is made to a letter sent by David Carroll from GFA-US to Sarah Billings of the RBC in Hamilton, requesting that she transfer $20 million from GFA’s Indian account to GFA’s head office in the US.  On page 63, Mark. Stanley, lawyer for the plaintiffs, referred to a document showing that this money was received at the GFA head office in Texas.

Apparently, money sitting in the GFA-India RBC account grew to tens of millions of dollars and sat there for an undetermined number of years.  These massive amounts of cash undoubtedly earned interest that aided growth.  No one other than KP Yohannan and a few of his confidants knew of this. Apparently, even Canadian board members were not informed

A search of FC-6 sites In India FYE 3/31/2015 and FYE 3/31/2016 shows that for the first time, GFA entities in India reported that they received money from Canada

CANADA TO INDIA FYE 3/31/2015
From To INR USD CAD 
GFA-Canada Ayana (GFA) 658457500       10,798,703    12,247,310
GFA-Canada Believers Church       933660000       15,312,024    17,366,076
GFA-Canada Last Hour       109840000         1,801,376      2,043,024
GFA-Canada Love India       110393900         1,810,460      2,053,327
Total     1812351400       29,722,563    33,709,737

This is the first year that GFA entities in India reported receiving money from Canada. For the year that ended 12/31/2015, GFA-Canada stated on their T-3010 Canada Revenue Agency (CRA) 2015 Registered Charity Information Return, that they sent $11,105,054 to India.  However, the amount reported as received by GFA entities in India from Canada for the period is vastly different – approximately three times the amount.  Such discrepancies are common practice for GFA.

      CANADA TO INDIA FYE 3/31/2016
From To INR USD CAD
GFA World Ayana (GFA)     219660000         3,294,900      4,393,200
GFA World Believers Church   1953422565       29,301,338 39,068,451
GFA World Last Hour     614395950         9,215,939    12,287,919
GFA World Love India     695898469       10,438,477    13,917,969
Little Hills Believers Church       44077968 661,170 881,559
Total from Canada   4027454952 52,911,824 70,549,099

The following year GFA-Canada, on their 2016 T-3010 Registered Charity Information Return, did not report to the CRA the huge $70,549,099 that was sent to India. They made no mention of their secret Little Hills Corporation. To say the least, their misstatements to the Canadian and Indian authorities are startling.

Follow the Money

In a recent article in the Christian Post, Francis Chan defended Gospel For Asia against allegations of fraud due to misappropriation of finances.

I have great respect for this man of God. He is a gifted Bible expositor and motivator to love and good works.  Bible study groups in my church use his study materials and benefit greatly from them.

I described to an elder in my church the position Francis Chan has taken regarding GFA.  He thought for a moment and then spoke of the gifts of the Spirit as described in the New Testament, comparing ministry gifts to gifts of administration.  He indicated that there is no doubt that Francis Chan is a gifted minister but added that this does not mean he has the same strength when it comes to functions of administration.  Discerning the true nature of GFA’s troubling practices, particularly those by KP Yohannan, cannot be made by one whose eyes are blinded to key facts, regardless of the esteem in which that person is held for other reasons.

I spent three weeks as a guest of GFA in India.  I spoke in Kerala at their seminary and later to their head office staff. I toured with some of their leaders and spoke at their Bible training centre and at some of their churches in Tamil Nadu. I travelled to Sri Lanka to speak at their Bible training centre in that country. My daughter, Sharlene, attended the GFA seminary in Kerala for two years and graduated with a bachelor’s degree in the year 2000. The teaching staff were well qualified and spiritually minded   Sharlene, along with two others, were the first students from the West to attend the seminary. Prior to this she served as a volunteer at GFA’s head office in Dallas, TX, for six months and after graduation she worked at GFA’s Canadian office. My church supported GFA for twenty years.

Nothing in our experience indicated that anything was wrong.  I was a strong supporter of GFA and an avid advocate of their ministry encouraging others to support them. As far as I knew there was every reason to applaud voices such as Francis Chan’s in endorsing GFA.

However, the day came when I began to learn that things might not be what I had thought they were.  I began to enquire.

Where Is The Field?

My first letter to GFA was dated March 27, 2015 and was followed by a series of letters.  When I questioned why $108 million GFA-Canada reported to the CRA they had sent to India over an eight-year period was not reported to the Indian government that it was received, KP Yohannan responded by email and said:

In Canada, GFA India has a bank account owned and controlled by them. When all field donations come into our Canadian office, they are entered according to donor and designation preference by our staff at GFA Canada, and then deposited into the same bank account in Canada controlled by GFA-India.  So once the funds are deposited into that account, they are considered received on the mission field and available to the field immediately.

That money deposited in a Canadian bank was considered to be “on the field” was both surprising and alarming.  The full impact of this did not become apparent until the Murphy v. GFA court hearings took place and until GFA entities in India reported their 2015 and 2016 foreign incomes.

“Love covers a multitude of sins” (1 Peter 4:8) is wonderfully true.  It is also true that, “Love does not delight in evil but rejoices with the truth” (1Corinthians 4:6).

Essential to true love is a love of truth, and valid discernment cannot be devoid of truth.  The truth of GFA’s deceptive financial practices as evidenced by its use of Canadian donor money is but one example of a much greater picture that remains hidden from the view of many due to repeated denials of the truth.

I pray that someday soon this will end.

……………………………..

When the recent court settlement says that all moneys sent “to the field” were used on the field, it doesn’t mean much when “the field” is this loosely defined. Donors still need to be wary.

K.P. Yohannan Gives Himself a New Name

K.P. Yohannan has taken on a fancy new name in his role as head of Believers’ Eastern Church. The K.P. formerly known as Metropolitan will now be known as Moran Mor Athanasius Yohan Metropolitan. The reason for the change is described on the church Facebook page:

I wonder if they kept the same secret handshake and hand kissing ceremony.

Mor in Syriac is a title of Lordship or sainthood. Various eastern churches use Mor and/or Moran in titles of religious leaders and Believers’ Church has followed the pattern.

Whatever he is called, he will still have to face a class action RICO suit in federal court and perhaps more over the next year or so as various cases and investigations progress in the U.S. and perhaps in Canada.

 

 

Gospel for Asia Continues to Raise Money for Flood Relief Without Saying How the Funds Will Get to the Needy

A month ago, I asked Gospel for Asia how they planned to distribute donor funds to flood victims in Kerala, India. In 2017, Gospel for Asia’s comparable organization in India (now called Ayana Charitable Trust) and their ecclesiastical arm (Believer’s Church) lost registration with the Indian government to accept foreign contributions. Thus, these groups can’t accept any of the funds now being raised by K.P. Yohannan from foreign donors. GFA very deliberately is raising these funds on the organization website and on social media. If GFA is giving these funds to another nonprofit in India, why can’t GFA simply inform the donor public about this?

When I asked GFA’s public relations firm, I was told:

GFA has headquarters in Kerala, India. Volunteers are actively rescuing, feeding those affected by flooding and providing other supplies.

However, InChrist Communications did not respond when I asked how those headquarters could accept funds when the registration to accept foreign funds had been revoked.

The later a friend of the blog was told that funds were being sent to Believers’ Church in India. Furthermore, the GFA representative said it could not be guaranteed that the donated funds would actually get to flood victims since GFA has no control over Believers’ Church. Actually, this explanation doesn’t make sense because Believers’ Church cannot legally accept foreign contributions.

Saying One Thing and Doing Another

When Compassion International lost their registration with the Indian government, they left the country. GFA has never addressed their loss of registration, nor why they continue to raise funds to send to India when the organizations they claim to support can’t take them. This is an issue for more than flood support. GFA has continued to raise support for sponsored children, missionaries, and all sorts of activities. GFA is telling the public they are doing something that the Indian government says can’t be done. If GFA is getting donor funds to the intended targets, GFA should disclose how they are doing that.

It is a mystery to me why investigative reporters have not taken up this issue. If there is an easy way around this issue, then why didn’t Compassion International use it? While there may an explanation, given GFA’s size and current legal difficulties, it seems like they should have to be more accountable.

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Image Fair use, GFA Facebook page

Nationwide and Arkansas Class Certified in Gospel for Asia RICO Case

In a major development in the RICO lawsuit filed against Gospel for Asia in the Western District of Arkansas, Judge Timothy Brooks certified a nationwide class of people eligible to pursue a RICO claim against Gospel for Asia. He also certified a subclass of Arkansas donors. The specifics are below:

The judge gave GFA until October 10, 2018 to come up with a suitable plan for alerting donors about this action. This will give donors a chance to opt out of the class if they wish. I will report that process when announced here as well. For now, GFA donors can anticipate being contacted.

This is a significant milestone in this case and opens this action up to all donors (with the exceptions as noted in the judge’s order) since 2009. An exception not noted here are former employees of GFA who signed an arbitration agreement with GFA while employees. In another case involving former employees, a federal appeals court ruled that former employees pressing a RICO claim must submit to arbitration if that was a part of their contract. However, for all other donors, the class certification is a major development.

Read Judge Brooks’ Order

In a related development, Judge Brooks appointed a Special Master to oversee the discovery process. This had been anticipated since Judge Brooks had sanctioned GFA over their lack of response to discovery requests from the plaintiffs.

The Special Master is attorney David R. Cohen of Cleveland, OH. He will have freedom to inspect GFA’s documents wherever he believes is necessary to determine compliance.

I expected that GFA would have made an effort to settle before a Special Master was appointed. I suspect this is causing significant stress in Wills Point, TX and somewhere in Kerala, India.

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Image Fair use, GFA Facebook page

Dear Gospel for Asia: How Will Funds Raised for Kerala Flood Victims Get to Them?

Over the past week, the news out of the state of Kerala in India has been devastating. Due to severe flooding, over 400 are dead and 800,000 have been displaced. Sadly, those numbers are expected to climb. Of course, the natural impulse is to help.

Kerala is the home of K.P. Yohannan, Gospel for Asia (now called Ayana Charitable Trust in India), and Believers’ Church. While it is understandable that K.P. has been informing his followers about what is happening there, he is also doing something that raises a question: K.P. is raising foreign donations to send to flood victims. The question is how will those funds get to flood victims?

In 2017, the government of India canceled the registration of Gospel for Asia (Ayana Charitable Trust), Believers’ Church India, and two other affiliated organizations to receive foreign donations. Yohannan is raising money but it isn’t clear how those funds will get to flood victims when the Indian organizations he fronts can’t receive them?

Different Answers from Different Sources

Yesterday via email in response to a GFA press release asking for donations for flood victims, I asked public relations contact Gregg Wooding of InChrist Communications if he could explain how donations will get to flood victims. He replied:

GFA has headquarters in Kerala, India. Volunteers are actively rescuing, feeding those affected by flooding and providing other supplies.

I wrote back to ask how GFA in Kerala could receive those funds since the Indian government had canceled the organization’s FCRA registration. He did not answer.

Earlier in the day a source called GFA in Wills Point, TX on behalf of my blog and asked how American donations could be accepted in India since the FCRA registrations had been canceled. The caller was told that GFA still is able to operate in India, but the license to receive money is with Believers Eastern Church. The GFA representative said that the funds given to GFA are sent to Believers Church. He added that GFA and Believers’ Church are technically and legally different entities. GFA cannot guarantee money given for India disaster relief will be used for that purpose through Believers’ Church because GFA has no legal or ultimate authority over Believers’ Church. Money given to GFA is preferenced by donors for a certain purpose and Believers’ Church in practice uses the money for what it is preferenced for.

Leaving aside the uncertainty that the Believers’ Church might not use the funds as intended, GFA’s answer doesn’t match what the Indian government says. As I will demonstrate below, the registrations for GFA (Ayana Charitable Trust), Believers’ Church, and two other GFA affiliated organizations were canceled in 2017.  The question remains – how will American funds get to flood victims since GFA and Believers’ Church are unable to receive foreign contributions? Maybe there is an answer to this question, but GFA hasn’t provided one that fits with information available to the public.

FCRA – Foreign Contribution Regulation Act

In India, a charity must be registered with the government to receive foreign donations. There are rigorous reporting requirements as specified by the Foreign Contribution Regulation Act (FCRA) and the records are available to the world via the Home Ministry’s website. In fact, those records prompted the early questions about Gospel for Asia’s finances that eventually led to GFA being removed from membership in the Evangelical Council for Financial Accountability.

The FCRA rules are clear that only registered organizations can receive foreign donations (click here for a larger image).

Among other conditions, the rules (Q.2b) state that an organization “must obtain the FCRA registration/prior permission from the Central Government.” In contrast, Q.3i specifies that “individuals or associations who have been prohibited from receiving foreign contributions” cannot receive them.

To determine organizations which have been canceled, one can go to the India’s Home Ministry website and scroll down to the FCRA link.  On that site, there is a link near the bottom left which reads: List of Associations whose registration has been cancelled. If you click through, you will need to select the state of Kerala. Once you do that, you will see Ayana Charitable Trust at the top of the list. Scrolling down you will soon encounter Believers’ Church India and Love India Ministries and Last Hour Ministries.  Here are screen caps of Ayana Charitable Trust (formerly GFA-India), Believers’ Church, Love India Ministries, and Last Hour Ministries on the canceled list).

Since the very organizations which GFA and GFA’s PR representative said will take the money can’t do so, it is a fair and significant question to ask how donations intended for flood victims will get to them.  So far, GFA has not provided a satisfactory answer or provided evidence that the Indian government is wrong. Donors should demand more.

For more on the impact of the revocation of registration to receive foreign funds in India, see this article on Compassion International. When the Indian government canceled their registration to receive foreign donations, they left India. 

 

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Image: with permission Indian Navy (GODL-India) [GODL-India (https://data.gov.in/sites/default/files/Gazette_Notification_OGDL.pdf)], via Wikimedia Commons

In 2015, Gospel for Asia Privately Feared Investigation of How Donor Funds Were Spent

This post is the second in a series covering a February hearing in Murphy v. Gospel for Asia. Former donors, Garland and Phyllis Murphy are suing the leaders of Gospel for Asia in federal court claiming that GFA did not use donor funds as donors intended. Recently, the transcript of the hearing became available. If you are a GFA donor or are thinking about being one, you should read it. It is available via this link with commentary in my first post on the topic. This post discloses the concerns GFA leaders had about being investigated even as they were telling the public they were no problems.

One of the bombshell revelations in the February hearing is the disclosure of an email from David Carroll to K.P. Yohannan which suggests that both men may have misled GFA staff members in May 2015. The Murphys’ attorney Mark Stanley read the email into the record. According to Stanley, in May 2015 then GFA COO David Carroll wrote to GFA founder K.P. Yohannan about his concerns over financial reports and truthfulness. From page 64 to page 68 of the transcript, attorney Stanley cited the email with his comments interspersed throughout. David Carroll’s words are in quotes. I have reproduced Stanley’s testimony below.

Click this link to read David Carroll’s email to K.P. Yohannan without attorney comment

MR. STANLEY: What’s really interesting to me also, if I might just take one second and read pretty much one of the key documents in the case. This is an e-mail from Reverend Carroll, David Carroll, to K. P. Yohannan, and I think it’s really important because it really will put it back into perspective what’s going on: “Sir, I need to share with you where I am over this situation.” I’m right here. “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” — which they rely on quite a bit in their answers, if you recall — “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,” [Stanley remarks] which they told us did not happen.

“I think that India feels that we raise money and send it” –[Stanley remarks] by the way, Mr. Mowrey said that in a prior hearing, that none of the money went to the hospital. “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.” [Stanley remarks] This doesn’t sound like someone who has already got accountability, knowing how they spent the money.

“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.” Next page.

MR. MOWREY: Could he read the rest of that letter, your Honor?
MR. STANLEY: I am.
MR. MOWREY: Okay. Good.
MR. STANLEY: “It doesn’t matter that we have now moved the money out of the corpus fund” — [Stanley remarks] this is now after the ECFA thing — “because of public FC-6 reports” — I’m sorry. It’s backwards. Sorry. That’s not right, either. That’s right.
“It doesn’t matter that we have now moved the money out of the corpus fund because according to the public FC-6 reports, we have been building them up for years. Moving the money only serves to confirm the feelings of guilt to outsiders.”

Again, they have not been spending the money. They have been building up the corpus funds for years. “I think the only way for us to handle the inquiries raised by Bruce and others is to refer them to our Indian office. Mr. Throckmorton” — that’s the blogger — “(unless a miracle happens) will get this information and may even begin an investigation of us. We can say all we want that we don’t have anything to do with the Believers Church or the field and that you are only the spiritual head of the church and that finances are handled by others but you, but as a practical matter, that will not hold up. Can the field find a way out of this situation? I too am very nervous.”

“I have always believed in total accountability of the field, yet the FC-6 reports provide numbers that, as a former auditor, I cannot just explain away with a simple explanation. I, and the world, will need numerical proof now, and I do not have the ability to get it from the USA end. Only the field can explain it, and I am in the hot seat in this crisis and I feel a lot of pressure.”
[Stanley remarks] I would point out, Judge, this was in 2015, May of 2015, almost three years ago. You pointed out that our discovery was served in August. ECFA asked them for this information in May of 2015. They’ve had three years to compile this information, and they just don’t have it because it doesn’t exist. Nobody ever tracked the designations because they were simply spent out on the — once they were sent to the field, they were done with it. There was no accountability. It goes on to say, “If I say, well, it is not my problem, it’s a field problem, it’s as good as saying we are guilty of misappropriation,” [Stanley remarks] which is true. If I say “The FC-6 reports are filed inaccurately on purpose, due to the hostile environments we work in, it gets the field in trouble and turns the attention to them. I get the feeling that, although we are not financially dishonest, we are financially reckless. The stockpiling of money in the RBC — [Stanley remarks] Royal Bank of India account — “and then the hurried transferring of it to the field, the Hong Kong account, et cetera. Sir, may I please have my name taken off of the RBC account as soon as possible?”

First, let me say that a miracle didn’t happen, if you know what I mean.

David Carroll expressed anxiety about accountability in this email. He acknowledged that either donor funds were diverted from Bridge of Hope and National Ministries to the Believers’ Church Medical Center or the reports were filed incorrectly with the Indian government. There seems to be little doubt that the funds were used for the hospital as I first reported in May 2015. Carroll was fearful that Bruce Morrison and/or I would launch an investigation into the obvious discrepancies. He was right about that. In response to us, he refused to answer any questions and denied any problems.

Furthermore, in a telling admission, Carroll said to Yohannan:

We can say all we want that we don’t have anything to do with the Believers Church or the field and that you are only the spiritual head of the church and that finances are handled by others but you, but as a practical matter, that will not hold up.

GFA leaders told ECFA that they had no control over Believers Church. See yesterday’s post for a run down of what GFA told ECFA about that. In addition, K.P. Yohannan told his Texas staff in May 2015 that he didn’t sit on any boards and had no authority in India. David Carroll was sitting right beside him. This email suggests that he knew it wasn’t accurate when Yohannan said it.

Publicly, GFA said they were operating in accord with the law, ECFA standards, and best practices. However, behind the scenes we now learn that there was worry, pressure, and a more candid assessment of the situation even as the confident and sunny messages were being disseminated to the staff and to the public. I wonder if they knew all along that it was illegal to send cash into India through student backpacks, thus exposing college students to criminal charges.

What should we believe now?

Every Gospel for Asia Donor Should Read This Federal Court Document

On February 16, 2018 a hearing was held in Fayetteville AR before federal Judge Timothy Brooks in the case of former GFA donors Garland and

Admirer kissing the hand of K.P. Yohannan. From his 2017 birthday video.

Phylliss Murphy v. Gospel for Asia, K.P. Yohannan, Gisela Punnose, David Carroll, and Pat Emerick. The Murphy’s complaint accuses GFA and named defendants of conspiring to defraud donors and misrepresent the way donated funds have been spent.

This hearing was convened to resolve an ongoing dispute regarding the discovery of evidence in the case. While the transcript is long (over 90 pages), if you donate to Gospel for Asia or are considering it, you should read it.

The context for the hearing is the claim by former GFA donors Garland and Phylliss Murphy that GFA diverted funds away their intended purpose. At this point in the case, the Murphys and their attorneys have requested documents which would demonstrate a link between donations and expenditures. Over several months, GFA attorneys have promised such evidence but have not provided it. The reason Judge Brooks called the hearing was to resolve the situation.

My goal now is to outline two high points of this hearing in the context of many months of reporting on the GFA scandal.

Groundhog Day

Judge Brooks actually asked the following question in the hearing:

I’ve next got a question for everyone. Will you please raise your hand if you’ve ever seen the movie “Groundhog Day.”

He explained:

I feel like I am Phil Connors who was portrayed by Bill Murray in the movie “Groundhog Day” in dealing with this discovery dispute; and I am of the view, having read the motion and the response, that the defendants, at least in their answers — their answer to these requests for admissions, and in their response to the motion for sanctions, are like all of the people that Phil Connors was dealing with in the movie “Groundhog Day.”
He woke up every day repeating February 2nd, over and over again, but the people that he was interacting with in the plot of this movie didn’t realize that; and I feel like when I read the defendants’ answers and when I read their response that it is as if this Court had not already addressed and ruled on some of these same issues at least twice, if not more and, yet, here we are again.

Judge Brooks had already ruled twice that GFA needed to produced documents in response to questions from the Murphys about where money was spent. They have failed to do so. By this hearing, Judge Brooks summarized the situation:

Plaintiffs now once again seek answers to the same questions that they’ve been asking for months: Was donated money diverted to other causes and do defendants have information or documents that would prove how the money was spent.

This is the crux of the case. If GFA defendants would like to clear their name, they could produce evidence which shows how donations were spent. They haven’t done so. As I pointed out in December of last year, GFA is dragging this out. Anyone who says differently simply isn’t dealing with the case documents.

Donors should ask GFA why a federal judge is exasperated over GFA’s inability to document how donations are spent.

GFA Staff Authorized Transfer of Money from Canada to India to the U.S.

Source TT Architects website

A stunning revelation in this transcript is the disclosure that GFA’s former Chief Operating Officer David Carroll and CEO K.P. Yohannan allegedly had wire authority to move $20 million dollars from India to Texas, presumably for the completion of GFA’s headquarters. Staff were initially told that an anonymous donor gave those funds. Then in May 2015, Carroll told staff that one of GFA’s field partners in India took out a loan for nearly $20 million and sent it to Texas. Carroll and Yohannan told staff that the decision to give the funds was made by the Indian leadership without any influence from Yohannan. According to Yohannan, he had no authority over the decision.

In the February hearing transcript, plaintiffs’ attorney Mark Stanley presented evidence which contradicts this narrative. Here is the relevant portion of Stanley’s testimony.

MR. STANLEY: They [GFA’s attorneys] say that the defendants [GFA] don’t control these third-party entities. I have two documents, if I might — let me find them — showing just the opposite. Here’s one. This document is 2015, April 2015, produced by them from Reverend Dr. K. P. Yohannan, president, asking them to transfer Canadian dollars, or CAD — I don’t know. CAD, those are cash deposits — for Gospel For Asia (India), for further credit to Gospel For Asia (India). These are from — remitting it to the state bank of India in Canada, and I can show you that account number is Gospel For Asia (India). I have the accounts for that. That’s K. P. Yohannan doing that.
David Carroll says he has no control over it. I’ve got David Carroll requesting a document — sorry. There it is. This is David Carroll who says, “I have no control over the field partners,” right? “We have no control; we have nothing to do with them”; yet, David Carroll sends a letter to Sarah Billings from the Royal Bank of Canada asking them to transfer $20 million from Gospel For Asia (India) to GFA’s account in the United States, signed David Carroll, CEO, Gospel For Asia. How could he authorize money coming out of a Gospel For Asia (India) account? We know it’s a Gospel For Asia (India) account because it’s account number — 489 is the last four digits. Here it is. There’s a statement from the Royal Bank of Canada, Gospel For Asia (India), care of Teresa Chupp, in Carrollton — that’s their old address before they moved to Wills Point — for Gospel For Asia (India), and there’s the account number.
So clearly the spin that they have been told that these folks have no control over the field partners is simply not true. They have control over it. They have wire instructions, wire authority. K. P. Yohannan is the metropolitan of that. You read the constitution from prior hearings. It talks about all of his roles in the constitution.

All of these folks, Mr. Carroll, Reverend Carroll, Mr. Emerick, the Reverend Emerick, all the others have sworn total loyalty to K. P. Yohannan. His niece, Siny Punnose also have sworn loyalty to K. P. Yohannan. They have absolute control of that.

According to Stanley, he has documentation that K.P. Yohannan authorized the movement of funds from the Canadian GFA to GFA-India. He also claims documentation of David Carroll authorizing a transfer of $20 million from the India field partner back to the United States organization. If Stanley’s representations are as they seem, this information contradicts what the Evangelical Council for Financial Accountability said they were told by GFA’s leaders and it contradicts what GFA leaders told staff in 2015.

What Did GFA Tell ECFA?

Beginning in May 2015, the ECFA began talking to GFA leaders, some of whom are now defendants in this fraud case, about alleged violations of financial management policies. In contrast to the evidence presented in the February 16, 2018 hearing, GFA told ECFA representatives that GFA leaders in the U.S. had no control over the field partners in India.
From the ECFA letter to GFA:

During our review on June 3, ECFA staff raised questions regarding GFA’s oversight and control of funds sent to foreign field partners. GFA’s staff indicated that the foreign field partners are completely independent organizations and therefore GFA did not exercise any direct control over field partners. GFA staff also indicated that they did not have a foreign grant process in place to oversee the use of funds.

The ECFA letter specifically refers to the near $20-million transfer of cash. From the letter:

GFA’s financial statements do not appropriately report transactions with foreign partners. During our review on June 3, GFA staff indicated that funds transferred to GFA India were actually transferred to a number of related entities instead of the single entity reflected in the 2013 audited financial statements. Additionally, on August 24 we learned that GFA received a $19,778,613 donation from GFA India, which was classified as a related party elsewhere on the 2013 audited financial statements (also see #8 below). On August 27, GFA staff confirmed that this donation was neither disclosed in the footnotes of the 2013 financial statements as a related-party transaction nor to the GFA board of directors. This inconsistency within the financial statements and lack of disclosure to the GFA board of directors about a significant related-party transaction appears to violate ECFA Standards 2, 3, and 6. On July 20, ECFA was informed that GFA engaged a new audit firm and they are in the process of reviewing related-party transactions.

The ECFA report letter then pointed out the impropriety of moving funds from India which had been given originally as donations exclusively for mission work in Asia.

Use of funds restricted for the field for other purposes. On June 3, ECFA discussed GFA’s claim that 100 percent of field funds are sent and used in the field. GFA staff confirmed that this was accurate. On August 24, ECFA was informed that GFA India made a gift to GFA of $19,778,613 in 2013 to complete GFA’s new office. On August 27, GFA’s staff confirmed that the funds relating to this donation were originally received by GFA as gifts restricted for the field and GFA transferred to field partners to fulfill donor restrictions.

Two important issues are raised:

A. Reallocating gifts donated for field purposes and using them to pay for headquarters construction appears to be a violation of ECFA’s Standards 7.2. GFA staff stated in a recorded GFA staff meeting that you approached the field partner and explained that GFA could borrow the funds in the U.S., at less than desirable terms, for the headquarters construction. However, a gift from the field partner, in lieu of GFA borrowing the funds, would allow GFA to complete the new headquarters and thereby save interest. Therefore, GFA would be able to send more money to the field in future years. ECFA believes that the potential savings resulting from the GFA India gift is an inadequate basis to reallocate gifts donated for field purposes.

B. Reallocating gifts donated for field purposes contradicts GFA’s claim that 100 percent of funds are sent to the field. In fact, a significant amount of donations restricted for the field made a circuitous trip back to GFA and were used for the headquarters construction, as though they had never gone to the field. This appears to be a violation of Standard 7.1.
In a GFA staff meeting, GFA indicated the field partner took out a loan to cover the use of the $19,778,613 gift and GFA staff confirmed on August 27 that India-generated income was used to repay the loan. Our review of the board minutes did not indicate the GFA board had approved, or even been notified, of the $19,778,613 reallocation of donor-restricted gifts.

Now we learn from attorney Stanley that the funds may have simply been transferred by GFA leaders in the U.S. from GFA-India’s Royal Bank of Canada account. Was the office complex finished via a gift from GFA-India? Or did GFA defendants simply transfer $20-million of donor money from one account to another? In either case, plaintiffs attorney presented evidence to allege that GFA leaders had sufficient control to authorize the transfer of funds which were not subsequently spent as intended by donors.

Other Misrepresentations Revealed

There are other revelations in this transcript which I will detail in future posts. For now, I will conclude by repeating my advice to donors to read this document as well as the ECFA report. Some of the same issues which led to the removal of GFA from the ECFA membership are still current today and have come to the attention of the presiding federal judge in this case. Although the trial isn’t slated until next year, consumers and donors can use the evidence available to make their own judgments now.

SEE THIS 2019 UPDATE