Gospel for Asia Defendants Must Produce Evidence in RICO Case or Admit They Can't

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

On November 21, Gospel for Asia CEO K.P. Yohannan and his fellow GFA defendants were dealt a legal setback in federal court when Judge Timothy Brooks ordered them to respond to plaintiffs discovery requests for information. GFA initially argued that plaintiffs had made too many requests. Furthermore, GFA said they couldn’t get answers because GFA doesn’t control the relevant entities in India. Later, GFA argued that those entities (e.g., Believers’ Church) had decided to turn over documentation of how funds were used and hoped to offset the order on that basis. However, Judge Brooks ruled in favor of the plaintiffs.
The background is further explained in the order:

The matter currently before the Court, however, concerns a discovery dispute that has arisen between the parties [the plaintiffs Garland and Phyllis Murphy v. GFA] regarding information central to this case: namely, information regarding where donated monies were sent and for what purposes they were used. As is obvious given the nature of this case, Plaintiffs’ theory of fraud is premised on demonstrating that Defendants and their international partners did not spend the donated money in accordance with their donors’ wishes and, in doing so, violated promises allegedly made to these donors to do exactly that.
In order to demonstrate that these donations were not spent in conformity with these alleged promises, Plaintiffs served two prior sets of discovery on Defendants. Both of these sets, which included interrogatories and, by the Court’s count, at least 75 requests for production, sought to obtain information and documents that would either establish or refute Plaintiffs’ theory about where the donated money went. Given the information provided under seal to the Court and discussed during the September telephone conference, it is clear that Plaintiffs’ prior attempts to discover this crucial information were only partially successful. In short, these interrogatories and requests for production provided a wealth of information that illustrated how much money was collected by Defendants. But, this discovery information did nothing to clear up the confusion as to how this accumulated money was subsequently spent.
As such, Plaintiffs now once again seek answers to the same questions that they have been asking for months: was this donated money diverted to other causes and do Defendants have information or documents that would prove how the money was spent? In an effort to come at the problem from a different angle, however, Plaintiffs now seek to serve on the Defendants what amounts to over 1000 RFAs. While startling upon first read, this sizable number of RFAs consists entirely of the same six RFAs repeated for each of 179 different codes representing different categories of donations (e.g. a code for pigs and a separate code for bicycles).2 Each of these sets of RFAs is accompanied by a Request for Production asking for any documents in the Defendants’ possession that would reflect how this earmarked money was spent.

GFA was initially able to verify how much money they collected but the response to the requests for information did not address where the funds had been spent. Therefore, the Murphys came back with additional requests for information which GFA was hoping to avoid. GFA’s reasons were outlined in the order:

In their  Response in Opposition, Defendants object to this proposed set of discovery on several grounds, including the sheer number of requests, the improper nature of these requests given the purpose of Rule 36 of the Federal Rules of Civil Procedure, and the lack of need for these requests now that Defendants’ field partners have recently committed to providing information relevant to Plaintiffs’ inquiries.

Judge Brooks did not agree with these reasons and the rest of the order lays out his justification for the ruling against GFA. Regarding the number of requests, Brooks said the complexity of the case and GFA’s prior inability to get the information justified the plaintiffs requests. He declared their requests to be proper. Furthermore, in light of prior statements by GFA that they had no control over field partners, the discovery order was needed to make sure the facts could be determined.

Can Gospel for Asia Prove Money Was Spent as Promised?

On that question, GFA appears to be claiming two contradictory messages. First, the adamantly claim they are spending all funds as promised. But second, they are telling the judge and plaintiffs that they haven’t got control of the entities spending the money and so they can’t provide proof about how the money is being spent. Judge Brooks appears to be on to this contradiction. On that point, this section of the order by Judge Brooks is key:

Finally, Defendants object to these RFAs because they argue that they have been rendered unnecessary by recent commitments by some of Defendants’ international field partners to provide information related to Plaintiffs’ questions and because they personally do not have control over what their international field partners do. These objections are also unpersuasive to the Court.
As an initial matter, the Court applauds the Defendants for acknowledging and committing to carry out their duty under Rule 26(e) to supplement their prior answers to the interrogatories that were served on them in Plaintiffs’ First and Second Discovery Sets. However, these discovery devices are not mutually exclusive. See, e.g., 88 Charles Alan Wright & Arthur R. Miller, Fed. Practice & Procedure Civ. § 2253 (3d ed. 2017) (“a party need not elect between Rule 36 and the other rules and it may use the various devices at the same time.”). Therefore, the fact that Defendants might now have the ability to provide a supplemented answer to the previously served interrogatories does not alter the Court’s view that these RFAs are proper given the information that has been submitted to it by the parties.
Moreover, Defendants contend that the requested information is largely in the hands of third parties over whom Defendants exercise no control. As the Court advised Defendants during the telephone conference, if, after reasonable inquiry, Defendants do not have within their possession information by which they could honestly admit or deny these RFAs, then that is the answer that should be provided.  See, e.g., Wright & Miller,
Fed. Practice and Procedure § 2261 (stating that where a party does not know whether the matter it is asked to admit is true or not, it may reply that “it cannot truthfully admit or deny the matter”). If, in fact , it turns out that Defendants are correct that they do not have the means by which to document how their international field partners spent the money, then the replies to Plaintiffs’ RFAs will be very similar and simple-further supporting the Court’s view that this request is not unduly burdensome in light of the nature of this case.

Let that sink in. If GFA cannot “truthfully admit or deny the matter,” then how can GFA make the claim that donated funds are being spent as promised? If GFA’s defendants really can’t document how the field partners spent the money, then their claims to use donated funds in accord with donor intent are unverifiable. To donors and staff, GFA leaders have said they know where it all goes. To Judge Brooks, they have been saying we don’t have the means to document it.
Seems to me that a lot more donors should be asking a lot more questions.