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Thursday, 12 April 2012

The Curse of the Prosperity Gospel: Suits charge TBN with illegal financial practice

Suits charge TBN with illegal financial practice

http://www.christiantelegraph.com/issue15981.html

A $50 million jet. Chauffeurs. Mansions in California and Florida. Clandestine affairs. Crimes and cover-up. Even a $100,000 motor home for the pet dog.


These are just a few of the allegations directed against the Trinity Broadcasting Network (TBN) and its directors in a pair of lawsuits filed in February by former employees of the nation's largest Christian broadcasting network, reports Baptist Press.


The first lawsuit, filed on Feb. 1 in U.S. District Court in California, contains charges by Brittany Koper, the former chief financial officer of TBN and the granddaughter of founders Paul and Janice Crouch. Her lawsuit is not against TBN but against Davert & Loe, one of TBN's law firms. Koper's suit says she discovered illegal activities when she became head of finance. Among the alleged activities: "the unlawful distribution of the TBN Companies' charitable assets to Trinity Broadcasting's directors," some of whom are Crouch family members. The suit says "these unlawful financial transactions" exceed $50 million


She took that information to Davert & Loe, seeking legal advice. The firm "acknowledged that the conduct in question was unlawful but nevertheless advised ... Ms. Koper to perform and cover up such unlawful activities," according to the lawsuit. The suit also says lawyers in the firm harassed her sexually. She seeks more than $500,000 in damages.


The other lawsuit is against Trinity Christian Center of Santa Ana, one of TBN's corporate entities, as well as other TBN entities and Davert & Loe. Joseph McVeigh, Koper's uncle, says TBN sued him in retaliation against Koper. A judge dismissed TBN's claims against McVeigh, who now seeks legal fees and "punitive and exemplary damages


Rusty Leonard, president of MinistryWatch.com, is not surprised by the allegations. "They have misled folks for an awfully long time," he said. "They've been the subject of more Donor Watches from MinistryWatch.com than any other ministry." A Donor Watch is a warning not to contribute to a ministry until the problems identified in the Donor Watch are corrected.

But TBN has a history of dodging bullets. The Los Angeles Times, MinistryWatch.com, and the Trinity Foundation, a ministry watchdog group, have all investigated TBN and have all published critical evidence, but with little effect.

TBN attorney Colby May told World News Service that the accusations of Koper and McVeigh regarding TBN are "bold faced lies." He accused Koper and her husband of embezzling and misappropriating money and property from TBN and International Christian Broadcasting (ICB), and said the lawsuits are attempts to divert attention from her wrongdoing. May also said TBN and ICB have turned documentation of Koper's wrongdoing over to both the IRS and local law enforcement, but neither has charged Koper with any crimes.

Years of negative publicity may be one reason TBN finances have taken a turn for the worse. The organization still lists nearly $800 million in assets, much of it in cash or other liquid assets, according to MinistryWatch.com -- but deficits totaled more than $18 million in 2010, the last year for which numbers are available, and assets fell by about $30 million from 2009 to 2010 alone.


How Pastors' Ponzis Affect Our Gospel Witness

A rash of pastor-endorsed fraud taints our gospel witness


A Christianity Today editorial | posted 4/13/2012 10:03AM

http://www.christianitytoday.com/ct/2012/april/editorial-pastoral-ponzi-schemes.html

It begins with a seemingly sincere offer of help from a trusted, Jesus-loving voice. But the conversation always dead-ends in perdition.

Case in point: The New Covenant Christian Center, a Seattle-area independent church, was the setting where a tragically familiar Ponzi scheme took root in 2003. The scheme's organizer offered to double or triple invested money in a matter of weeks through an overseas trading program. In total, 24 church members handed over $1.6 million until law enforcement intervened in 2011 as the fraud collapsed. Who was that trusted voice behind this Ponzi? Anthony C. Morris, the pastor.

In recent years, Ponzi frauds that prey on the naïve, innocent, and trusting have lost billions. The Madoff Ponzi's price tag alone was $20 billion. In these schemes, the organizer offers a high return rate at low risk, but in reality he pays existing investors with funds collected from new investors.

Prosecutors have uncovered more financial fraud in church networks than they ever imagined. "It took the financial downturn. Money was drying up—the new investors were not coming in, so Ponzi schemes collapsed," IRS Special Agent in Charge for Criminal Investigations Ken Hines told Christianity Today.

Hines, based in Seattle, has helped expose Ponzis for more than 20 years. He has seen first-hand how the church environment has proven to be an ideal context for affinity fraud. "When you go to church, you don't expect to get lied to or deceived or manipulated into losing your life's savings."

The New Covenant Ponzi was no isolated event. The stain of fraud that may have started in the pew has now spread to the pulpit. More pastors, elders, and other spiritual leaders are engaged in or endorse investments that later turn out to be Ponzis. Unfortunately, there are too many examples to cite. Here are three:

• In the Ukraine, Nigerian megachurch pastor Sunday Adelaja faces a civil suit that he took a leadership role in the $100 million Kings Capital fund, which turned out to be a Ponzi. There are hundreds of victims.

• Under the sponsorship of pastor Eddie Long and New Birth Missionary Baptist Church near Atlanta, lay minister and business executive Ephren Taylor persuaded church members to invest in City Capital Corp. for a "guaranteed 20 percent return." But investors, who have filed suit alleging a Ponzi scheme, may have lost more than $1 million.
• A federal judge in Portland recently sentenced a former preacher, Johnny "Mickey" Brown, to almost 11 years in prison for a Ponzi fraud in which he misused the credit cards of mostly elderly church members and others. Losses may exceed $4 million.
The sickening net effect of fraud puts a dark cloud over pastors and other leaders in local churches. Very few pastors will ever become certified financial planners. The issue is honesty and integrity, not investment advice per se. If a faithful church member cannot trust his or her own pastor, whom can they trust?

This is why when it comes to investment advice (not advice about the family budget or paying off your credit card debt) a pastor should stay two steps away from any investment plan under discussion. At the practical level, that means no endorsement or involvement of church or personal funds. Remove all appearances of conflict of interest so that public trust can thrive.

Pastors can also help church members use unbiased third parties to evaluate investments. We should be skeptical of returns exceeding 8 to 12 percent annually and avoid secretive or highly exclusive investments.
Nearly one quarter of today's Ponzi schemes exploit friendships and mutual interests. When a church community is defrauded, the ripple effects are deadly. Agent Hines said one fraud in San Diego "devastated that church community, broke that parish up—financially, emotionally, and spiritually."
Hines said many people who operate these frauds have no criminal record, not even a speeding ticket. He has no trouble pointing the finger at the human heart as an underlying cause. "What kicks in is the greed factor," he said. "Good people go bad and it's always the greed factor or self-preservation. It clouds their judgment."
The spate of pastor-endorsed Ponzi schemes adds to the other pastor and priest scandals that have been in the news in recent years. Unfortunately, we're in a time when even honest pastors with deep integrity have to earn the community's trust by following the strictest of ethical guidelines. That may be burdensome, but it is a relatively easy yoke that will in the end lead to a hearing for the gospel.
In a Seattle courtroom in January, Morris pleaded guilty to fraud and money laundering charges. He agreed to restitution. Court-ordered financial restitution is great. But restoring our witness will take more than a repentant pastor. Visible, public accountability is vital to the gospel.