Federal Judge Sanctions Gospel for Asia in Fraud Case

On June 4, federal Judge Timothy Brooks sanctioned mission giant Gospel for Asia in the ongoing fraud case of Murphy v. Gospel for Asia for failure to produce evidence as requested multiple times by the court. The court found that GFA “needlessly squandered the resources of the parties…and put an ‘extraordinary drain on the Court’s resources,” and that GFA’s “abusive conduct in this case since August constitutes a willful violation of its discovery orders.”

Judge Brook’s Order

In sanctioning GFA, Judge Brooks will require GFA to pay for a Special Master to oversee the gathering of evidence.  In the process, this attorney will have the ability to appoint a forensic accountant and will have access to all pertinent GFA records and communications.

Setback for Gospel for Asia

This is a major setback for GFA. For several years, GFA has been defending itself by saying that all funds are spent as donors intend. However, now after months of telling Judge Brooks that this can be proven, GFA is no closer to producing the evidence.

In his order, Judge Brooks accuses GFA of evasive tactics and warns them that discovery is not a shell game. Furthermore, he denied GFA’s claims that they have no control over entities in India. He pointed to documents demonstrating wire transfers between entities, the fact that Yohannan’s family members sit on many boards in common, Yohannan’s prominent status in Believers’ Church and prior ability to get financial documents from organizations they say don’t control.

Judge Brooks had strong words for GFA saying that they had failed to “obey clearly worded directives issued by this Court and to respond in good faith to Plaintiff’s discovery requests.” The federal judge has found GFA’s behavior in litigation to be far from what was promised by spokesman Johnnie Moore in 2016:

Gospel for Asia is 100% focused on continuing its work around the world while working very hard to put an end to the false accusations being continually made against the ministry. Gospel for Asia can document the legal and ethical use of funds donated and clearly answer every question…

As Judge Brooks pointed out in his order, GFA has had many chances to document their use of funds but has stalled all along the way. Now, they face sanctions in federal court and the appointment of a Special Master.

 

 

74 thoughts on “Federal Judge Sanctions Gospel for Asia in Fraud Case”

  1. I just received a notice that I am a member of the class action suit against GFA. I checked online and found a huge discrepancy in the amount of my donations. Who was responsible for gathering the amount of donations a donor made?

  2. So I guess I must have been living under a rock, because I am just now being made aware of this. I have supported GFA since about 2008. My Bible instructs me to ‘Test the Spirits’; guess I’ve been a little too trustworthy and negligent in doing so. Geesh!

    1. We supported (and promoted) GFA for almost 30 years … we have been aware of this for 3+ years and, frankly, are still struggling with the same feelings. If you are looking for further information, in addition to Warren’s numerous and informative blog posts you might want to take a look at http://www.gfadiaspora.com/ which has the stories of many ex-GFA staff members.

      1. Thank you very much; I appreciate the reply. Unfortunately, the link that you provided didn’t take me anywhere…

        1. That is very strange … I was on the website just before I posted the above message and actually checked out a new post they had added recently … but now I get the same result as you did … only suggestion is to try again in a day or two in case it is just a temporary issue.

          1. The link is working now. Thank you very much . I am so saddened by what I’ve read but yet not entirely surprised. Satan is busy and we all need to be aware and again, always be ready to ‘test the Spirits’. Come. Lord Jesus…

    2. I’m in the same situation. I have supported GFA for many years.I knew nothing of this until I received a notice from Murphy V GFA of the lawsuit. I immediately stopped sending support, and will wait for the outcome of this.

    3. I’m in the same situation. I have supported GFA for many years.I knew nothing of this until I received a notice from Murphy V GFA of the lawsuit. I immediately stopped sending support, and will wait for the outcome of this.

  3. GFA is a special ministry entity started and is been continuelly used by God. I Think K P and GFA will come out clean. Im sad to see many christian fall pray to the missinformation passed by fanatic hindus funded people. May God Give us decerning power. GFA is doing extra ordinary mission activities in india that is i guess cousing all these problem.

    1. Lol, good try, but the “fanatic hindus” have nothing to do with U.S. federal courts.

      1. Oh Man Do you have any idea how it works…. You have no idea……….. One thing I know if it was God started the ministry of GFA, It will continue…. No matter how loud you guys yell at it. GBU.

        1. Right jmt, “if it was God who started the ministry”. Thats a big “if” seeing how they continue to stall!

  4. No surprise. GFA really had two options:

    1. Come clean. That’s game over, and game over immediately. The U.S. organisation is shut down, and staff and supporters all know what’s going on. No more money comes in.

    2. Obstruct as long as possible. They’re still bringing in tens of millions every year, much of which is disappearing somewhere in India. So far, they’ve been able to keep much of the evidence that isn’t already public from coming out; they will try to continue that for as long as possible. Every month that goes by brings several million dollars in, and while some of that will go to cover legal expenses, the bulk of it will boost the profits of the family business in India. They’ll keep it going as long as possible.

  5. This seems to have been a long time coming, but clearly visible from a long way off.

    1. It has been and it’s not over. Having new forensic accountants start from scratch going through the mountain of paperwork will take a lot of time. The trial was already set for some time in 2019, so this new development may not be a huge setback timewise, unless GFA can use it to successfully push back that trial date.

      GFA obviously does not want the truth to come out, which likely is why they are apparently not willing to settle the case, even in the face of staggering forensic specialist fees, legal fees and Big Four Accounting fees. Even if US contributions are down by about 40% from the 2014 peak level (estimated based on the 40% decline in GFA Canada’s revenues which are public) GFA is probably still taking in close to $50M a year. Since 60% of the donors apparently haven’t gotten the message yet, that GFA lacks integrity, could GFA be thinking that dragging this case out for years will more than “pay for itself”? If GFA can move back the 2019 trial date, wouldn’t that give them even more time to collect tens of millions to pay for the Special Master, Locke Lord, all other legal related expenses, plus give them plenty of extra to spend as they wish?

      We have to believe that when the remaining donors find out how much GFA has concealed from them and abused their trust, that most will finally start listening to the facts. It will be hard to ignore them once a verdict is rendered and published.

  6. Clarifying some of the questions/issues coming up here: Judge Brooks has not yet defined the powers or scope of the Special Master. On June 11, both sides may submit their recommendations for Special Master. The scope and powers will be ruled on later. That ruling will determine what happens next. I’m very curious about what rulings will follow on the allegations of fabricated documents by the defendants, and I pray that the judge expands the scope of the Special Master to investigate this fraud.

    The American Law article shows the period as 2007-2015 (8 years) which covers about $450M in donations. That information was based on the original complaint. However, this was later changed and the current discovery period was reduced to 7 years extending from April 1, 2009 through March 31, 2016 and addresses $376M in designated donations. The books for those 7 years have long since been closed and there should be no need to submit any new documents for discovery. It’s not that GFA hasn’t submitted enough paperwork, it’s that the documents for those 7 years that GFA/Locke Lord submitted fail to PROVE the money was spent in accordance with donor designations.

    According to some insiders at GFA, after Warren’s articles broke, the most upsetting news to staff and donors was the gigantic cash reserves. Donors thought their money was being used for desperate time-sensitive imperatives such as feeding starving children, providing clean water wells, helping keep kids out of slums, etc. Warren exposing this stash of cash was not just deceptive, it was highly embarrassing. So GFA started aggressively spending down those hoarded funds, with a big portion going towards speculative real estate investments. Allegedly they spent well over $100M on bare land. This resulted in GFA’s bank balances being reduced, which they wanted for optics, but basically only resulted in converting short term liquid assets into long-term less liquid assets – none of which was agreed to by donors: Land does not serve the poor and needy. GFA was and is still hoarding up massive assets instead of spending the money as donors had intended.

    The irony is that this new discovery period shows donations of $376M for those 7 years which is almost identical to the foreign bank balances of $376M. This is why GFA will NEVER be able to legitimately show that the $376M in donations was spent in accordance with donor designation. How can you both spend and save the same $376M? Sure, they can scribble anything they want to in their Indian books, but they still have to account for that foreign donor cash which can now be traced to real estate purposes. Additionally, we do know that GFA India was the big $20M “anonymous” donor who wired field funds back to Texas for construction of the Wills Point compound. That fact will never go away.

    In the mean time, instead of coming clean or offering donors a refund, GFA has decided to try to win their case through sheer might by using that $376M in hoarded cash to merely outspend their opponent. This is the strategy typically used by evil oligarchs, not churches and charities. They hired one of the largest and most prestigious law firms (i.e. astronomically high billing rates per hour) in DFW, Locke Lord. GFA also paid to fly law partner and chief litigator Robert Mowrey out to India, for the big charm offensive, which was apparently fairly effective. I imagine GFA may try to push this trick on the Special Master as well.

    The legal fees thus far are likely well over $1 million, heading towards $2 million, if not more. Then GFA hired a Big 4 CPA firm to try to massage the numbers. Again, instead of just pulling together the actual receipts, GFA is paying the highest possible rate per hour and for what? They haven’t produced receipts because they don’t have them. This is just stalling.

    Back to the discovery questions… The books were closed over two years ago for this time period. GFA has submitted a ton of records to the court. There should be no need for the Special Master or their forensic accountants to travel to Wills Point or India at this point. There should also be no legitimate reason for GFA to add anything new to discovery and if they were to, it should be considered doubtful in its authenticity at this point. Mysteriously appearing, newly discovered “evidence” generally falls under tremendous scrutiny for professionals in all forensic fields.

    GFA is basically going to put their eggs into the “We have no control over Believers Church” basket. However, the Special Master will be aware that KPY is BC’s Metropolitan. Every BC Bishop has pledged lifetime submission to KP personally. His large portraits are hung in every BC building – dictator style. They can easily see pictures and videos of BC staff kissing KP’s ring and willing to do anything for Saint Johannes. There is zero independence between the two organizations. GFA and BC are in essence, one big company, controlled by His Eminence, KP Yohannan and his family.

    As for contempt of court, since this is civil litigation, GFA’s refusal to produce documents has been an act against the plaintiffs, and in opposition to the Court’s direct orders, which is why the plaintiff requested sanctions. The Special Master works for and directly reports to Judge Brooks, so this could now change. However, if GFA continues to refuse to submit proof, more important than getting slapped with contempt of court, they will basically lose their case because the case accuses GFA of not spending the money in the manner they promised donors it would be spent. If they cannot or will not disprove this, they lose. It’s hard to overstate what a huge victory this was for the plaintiffs. GFA will be reduced to trying to bewitch the Special Master and the forensic accountants with their trips to India charm offensives. Special Masters have seen most of these kinds of tricks before.

    BTW, this is one of the reasons GFA changed their gift acceptance policy in August 2015 while being investigated by ECFA, to allow them to use future donations as they see fit. The GFA weasel language now refers to gifts as having donor “preferences” which are non-binding. GFA also stopped using the “100% to the field” claim, because they can’t honor that, either. Where do you think these legal fees and Special Master charges are being paid from? That’s right, these are local administrative overhead expenses.

    The additional lawyers and forensic accountants trying to untangle this mess will be very expensive. GFA tried to win through obfuscation, feeling that Marc Stanley would not be able to afford all the forensic accountants required to untangle their million page mess of rupees. In an interesting twist of fate, GFA will now be heavily billed to have the court’s experts untangle the mess they created for the sole purpose of overwhelming the plaintiffs. Watch any movie about civil class action lawsuits. I’s what the big evil corps do. So their strategy of winning by dumping hundreds of pounds of (mostly irrelevant and highly confusing) paper on Stanley’s doorstep will now come home to roost on their own doorstep. Likely, millions of dollars in donations will fly out the door because GFA refuses to admit what they did was divert the donor money and lie about it to cover it up.

    GFA will, however, not go down without a fight. They will continue to submit mountains of paper, trying to win through volume and obfuscation. At this point, if the court determines that GFA is submitting fabricated records, it not only means that GFA will be losing their civil lawsuit. It would then open them up for a criminal financial fraud case, with all the work now conveniently provided to the Federal Court by specialists working for the Federal Court, and all with a pretty little bow on it. GFA’s smugness and stubbornness over not settling this case quickly, means that they have to now write giant checks to the very people who will be in the position to prove GFA was committing financial fraud – which is also a felony.

    Hiring of the Special Master also hurts GFA from a PR perspective. According to insiders, GFA has been spinning to larger donors that Judge Brooks has a grudge against Christians so his rulings have been strongly biased. Ya know, the old “attacks of the enemy” stuff. GFA is selling this as religious persecution. But the Special Master and their forensic accountants are fully independent. They only go where the evidence leads. It will be harder for GFA to tell donors that the Special Master and all the forensic CPAs were colluding to bring down Saint Johannes.

    That may be the largest act of justice we see to date: GFA will now have to pay full retail for their own demise. Kind of like the Chinese charging the families for the bullet.

    1. The word say’s that the believers sold land and brought the money to the Apostles and laid it at their feet, Acts 4:37, just the opposite of what these jokers did. They turned liquid assets, funds given for Gods work, turning it into hoarded up massive non liquid assets.

      They have done this stall tactic hoping the problem will go away, but “the face of the Lord is against those who do evil.” 1 Peter 3:12.

    2. Thanks for your time and emergy on this messy thing to uncover the truth responsibly.

    3. As I read your comments this passage came to mind, Jesus said what is in the heart proceeds out of the mouth. This exposes your heart by it use of words like Allegedly, fabricated, Mysteriously, dictator style, strategy typically used by evil oligarchs, obfuscation, bewitch, fabricated records, smugness and stubbornness,
      If you’re a Christian I would probably take a close look at your heart and ezamine as to whether your of the faith.

      I find it interesting that you say the accountants you speak of on behalf of the plain tiff is “Fully” independent but GFA has bias fraudulant accounting firm. That’s a pretty rediculous statement if you ask me.
      I wonder if you spent more time looking into what GFA has done since it’s founding instead of criticizing the organization would have an affect on your perspective. It sounds more like a root of bitterness than a fact finding mission of uprightness.
      As to KP’s Hand being kissed is a gesture indicating courtesy, politeness, respect, admiration. But you and others want to make it something else.
      This organization has taken in 100’s of millions since inception and serves in over 10 countries with 16,000 missionaries and church planters. That is a pretty amazing accomplishment along with those who have been fed, clothed sheltered, educated and had medical, vision and dental work done.
      When you find the perfect church or ministry let us all know.
      Here is how God feels about you and people like the plain tiff; 1 Cot 6
      Dare any of you, having a matter against another, go to law before the unrighteous, and not before the saints? 2 Do you not know that the saints will judge the world? And if the world will be judged by you, are you unworthy to judge the smallest matters? 3 Do you not know that we shall judge angels? How much more, things that pertain to this life? 4 If then you have [a]judgments concerning things pertaining to this life, do you appoint those who are least esteemed by the church to judge? 5 I say this to your shame. Is it so, that there is not a wise man among you, not even one, who will be able to judge between his brethren? 6 But brother goes to law against brother, and that before unbelievers!
      7 Now therefore, it is already an utter failure for you that you go to law against one another. Why do you not rather accept wrong? Why do you not rather let yourselves be cheated? 8 No, you yourselves do wrong and cheat, and you do these things to your brethren!

    1. Is Lopez actually associated with the group MassResistance? That’s one seriously bat-poop crazy organization (Brian Camenker), They don’t take in enough money to be hiring people but it says Lopez made his comments to the Christian Post through MassResistance. It should be noted that they are also one of the few anti-gay groups that have earned a Hate Group designation from the SPLC.

      The SBC had been coming around on this issue and I’m not sure if this means much since it is a resolution put forward by professor Lopez. What they do in response to it will tell more. They have the same data everyone else does, i.e. that SOCE doesn’t work and can harm. This begs the question, why fight for something you know doesn’t work? Is it because they feel that admitting full on that it doesn’t work would be too dangerous for them?

    2. Is Lopez actually associated with the group MassResistance? That’s one seriously bat-poop crazy organization (Brian Camenker), They don’t take in enough money to be hiring people but it says Lopez made his comments to the Christian Post through MassResistance. It should be noted that they are also one of the few anti-gay groups that have earned a Hate Group designation from the SPLC.

      The SBC had been coming around on this issue and I’m not sure if this means much since it is a resolution put forward by professor Lopez. What they do in response to it will tell more. They have the same data everyone else does, i.e. that SOCE doesn’t work and can harm. This begs the question, why fight for something you know doesn’t work? Is it because they feel that admitting full on that it doesn’t work would be too dangerous for them?

    1. How very convenient for him, since he’s one of the people we’re not supposed to be judging.

    2. How very convenient for him, since he’s one of the people we’re not supposed to be judging.

    3. GFA senior leadership need judged by their local churches, according to 1 Corinthians 5. And according to 1 Timothy 5:19-20, the rebuke should be public as a warning to others who might be tempted.

          1. You know, that is an interesting question … at one time the staff were definitely discouraged from fellowshipping outside the “GFA family” but from what I have heard that restriction was removed or at least relaxed. I wonder how many of those at a senior leadership level do/did have a relationship with a local church in the area?

          2. You know, that is an interesting question … at one time the staff were definitely discouraged from fellowshipping outside the “GFA family” but from what I have heard that restriction was removed or at least relaxed. I wonder how many of those at a senior leadership level do/did have a relationship with a local church in the area?

          3. Most of the US based leaders are ordained priests in Believers Eastern Church, so one can likely assume that they are accountable only to His Eminence, having sworn allegiance to him for life. BEC meets regularly on the compound, so they have no need for outside church family.

  7. You would think that GFA would start to lose all credibility with how many times they’ve postponed this, and clearly keep ignoring orders. They just look more and more guilty every time. Glad this story is making progress.

    1. That should apply but doesn’t. People blindly follow. Look t all the false doctrine churches, Global Vision Bible Church for one. They need to be investigated as well. It’s jusr sad.

  8. I am not surprised this has happened. Like Warren, I expect GFA to make a response which attempts to delay this being implemented. They have tried to appeal at every turn. I do not know if they can legally appeal this ruling. I hope not. Nonetheless, the writing is on the wall. A summary judgment is still what I expect. The evidence of fraud is overwhelming and only an Internet click away to find.

  9. Can anyone enlighten me on what happens next under this kind of ruling? Since GFA and its counsel have consistently refused to comply with the Judge’s rulings to date, it would seem likely that the same conduct would continue with the Special Master. In that case, does the Special Master have additional power/weapons to compel compliance?

    1. It sounds like GFA will no longer be in-charge of collecting their own documentation but the Special Master will have the legal authority to walk into GFA offices and collect whatever he/she wants without needing their approval. and get paid by GFA to do it. That’s one Herculean task considering the size of GFA and their oversea connected businesses. So now if you donate to GFA, you’re paying for Special Master services and all his/her staff because GFA refuses to cooperate.

      1. Not only will they have to pay the Special Master, GFA has now lost the ability to recover discovery costs. Normally in the discovery process, GFA would have been allowed to charge “reasonable” fees for the gathering of the documents.

    2. No doubt GFA will seek to delay. They have until June 11 to respond.

      1. I am looking through the long document for interesting comments by the judge. Here are a few:

        He calls the defendants abusive here: “discovery in this case has been severely hampered by Defendants abusive conduct” page 8

        “In sum, the court finds that the defendants answers continue to dodge where they have been asked to admit and obfuscate where the court ordered them to clarify.” and “Therefore, the court finds that the defendants abusive conduct in this case since August constitutes a willful violation of its clear discovery orders.” page 17

        “The nine month discovery dispute has needlessly squandered the resources of the parties, prejudiced Plaintiffs’ attempts to uncover information central to its claims, and put an ‘extraordinary drain on the Courts resources.'” page 19

        1. Note 6 on pages 16/17 .. when told (several months ago – March?) that “all parties and at least lead counsel” were to appear in his courtroom, apparently the Defendants contacted the judge to inquire if that meant all parties. Judge Brooks (with justifiable sarcasm I would think!) notes that this indicates “that Defendants are capable of seeking clarification when they do not understand the Court’s orders”. 😉

    3. yes, the GFA could face contempt of court or obstruction of justice charges if GFA refused to give the special master access to their records. and it also depends on the specifics of the judges order wrt to the duties/responsibilities of the special master. An important aspect of that is if the Special Master were to find evidence of wrong-doing unrelated to this case, would he/she be empowered to bring additional charges or would it be covered under attorney/client privilege.

      1. As a layperson whose legal expertise is derived solely from the Law & Order genre I would have thought contempt of court would have come into play before now!

        1. A judge never wants to do that unless absolutely necessary. Because then a party can appeal and may get it overturned. The Special Master order is harder to overturn because the judge is saying that the matters are complex and need specialized expertise to resolve.

  10. “Now, they face sanctions in federal court and the appointment of a Special Master.”

    David Barton?

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