David Carroll – Page 6 – Warren Throckmorton

Plaintiff’s Lawyer in the Gospel for Asia Fraud Case: Show Us Where the Money Went

“There is a blogger that regularly blogs. I’m certain that there will be something about this hearing on his blog because he follows the PACER regularly in everything that comes out, and there are a group of people that are — they — it’s a little bit of a family feud between these ex-employees and GFA.” – Robert Mowrey, attorney for Gospel for Asia, May 16, 2017.

On May 16, a hearing was held to set the calendar and procedures for the racketeering (RICO) lawsuit against Gospel for Asia brought by Garland and Phyllis Murphy (See this for an earlier post on that hearing).

I have secured a copy of the transcript of that hearing and plan to bring out some highlights over the next few weeks. I have plenty of time since the hearing isn’t slated to happen until 2019. One hopes GFA’s leadership will not use donor funds to drag this case out that long, but it appears that GFA and GFA’s well paid lawyers plan to do exactly that.

At the beginning of the hearing, the judge in the case, Timothy Brooks, summarized the allegations and GFA’s denials of the charges. Then the judge gave the Murphy’s lead attorney, Marc Stanley, a chance to present his own summary. Stanley made the situation simple: Show us where the money went.

MR. STANLEY: Thank you. Thank your Honor. I think the Court summarized the case pretty well, and what I thought would be important for today is sort of defining the different approaches of the two sides in discovery and where we’re trying to go with the case based on the allegations.

From our case, it’s pretty simple. It’s what did the defendants promise the plaintiffs. So, for instance, “Will you give me a thousand dollars for a Jesus Well?” “Yes, I’ll give you a thousand dollars for for a Jesus Well.” That’s the first one.
What did the plaintiffs give and then what did the defendants do with the money? “I give you a thousand dollars; show me it went to a Jesus Well.” Not hard to figure out. Either it did or it didn’t; either they can show it or they can’t.

And then, third, we’ve alleged a RICO conspiracy and fraud because what we allege happened is that a lot of this money did not even go to the field and a lot of this money went into for-profit enterprises like a hospital, a chain of hospitals, chain of educational facilities, a media empire, a soccer team in Myanmar, a railroad plantation. For a long time, there was $287 million on deposit in banks in India; there was $130 million in deposit in Hong Kong. And so what’s going on there?
We allege a RICO conspiracy. The kingpin is K.P. Yohannan, who is the chairman of Gospel for ASIA, Inc., but he’s also the metropolitan of Believers Church, and the metropolitan is sort of like a pope there. The constitution’s very clear — the constitution of the church — that the metropolitan, by virtue of his office, is the president and final authority of the church government, including the managing trustee, the president of all trusts and societies of Believer’s Church, and the custodians of Believers Church at large. And it goes on and on to say he has the ultimate authority of everything that goes on with the church. The properties are in his name, K.P. Yohannan’s name, a lot of the businesses and the properties there. It’s not just Believers Church. There’s also Gospel for Asia-India. There’s also Bridge of Hope Trust. There are a whole bunch of folks that we’re just finding “Gospel for Asia 75 LLC, Gospel for Asia 275 LLC, there’s Way of Hope LLC. We’ve got entities all over. It’s almost like the Enron transactions that we’re trying to unravel.
There’s — we’ve got entities in Germany that formed an alliance with Canada. We’ve got money allegedly going to Sri Lanka and other places. And so what we’re trying to find out is what did the plaintiffs give, what was promised, what did they give and what did defendants do with it. Did it line someone’s pockets; and if that’s the case, then we want them to give it back.

Now, you also said, you mentioned that the defendants’ contention was that all monies were used as the donors specified. If that’s the case, we lose.

This is an easy case. Just show us that the money that came in to Gospel for Asia — right now. I mean, they can — if that’s the case, they could show us tomorrow: The money that came in for Gospel for Asia was spent exactly as the donors said — “we dug this many wells, we bought this many camels, we did whatever else” — and we lose.

It’s not a hard case for that kind of discovery to do it. They should have records of showing, as fiduciaries of the money, what they did with the money.

As Stanley pointed out, GFA could do this tomorrow. The barrier to discovery is GFA. The primary reason GFA is in the situation they are in is because they won’t do the reasonable thing and show the donors where the money went.

Does Believers’ Church Follow The Church Constitution?

Later in the proceedings, Robert Mowrey, one of GFA’s lawyers said K.P. Yohannan doesn’t have control of matters in India’s Believers’ Church. According to Mowrey:

Mr. Stanley has mentioned over and over how K. P. Yohannan just controls everything. There are many — there are entities in India: The Believers Church, GFA-India. K. P. Yohannan is not on the board of those entities. Is he the metropolitan? Yes, he is the Metropolitan of Believers Church. Does that mean he has access to all of their records? No, it doesn’t.

Now, Mr. Stanley doesn’t believe that. Mr. Stanley thinks that whatever K. P. Yohannan wants, he can get; but we have no problem in producing everything we can with respect to the entities that he has sued. But when it comes to wholly separate entities in India, that’s where the rub is.

Believers’ Church may have altered documents over the last year but at the time the Murphys donated to GFA, Yohannan most certainly was considered the head of the church for spiritual and temporal matters according to the church Constitution (see also this source). He also sat/sits on the boards of many other Believers’ Church entities (see this post for more information).

I think this will be difficult for GFA’s lawyers to explain.

Stay tuned for more GFA posts from the blogger who regularly blogs.

Federal Judge Sets 2019 Trial Date for Fraud Case Against Gospel for Asia

Today, a federal judge in Western Arkansas ruled that one of the fraud and racketeering cases against Gospel for Asia will go to trial in 2019. U.S. District Judge Timothy Brooks set the date for a jury trial on April 15, 2019.
Despite numerous legal maneuvers by GFA’s lawyers, the Murphy RICO case will move ahead. This is a significant win for the plaintiffs since GFA has tried on multiple occasions to have this and another case thrown out. The earlier case involving another Arkansas couple, Matthew and Jennifer Dickson, has been stayed pending an appeal by GFA.
Read the scheduling order here.
The 10 page order in Murphy and Murphy v. Gospel for Asia sets the dates for discovery throughout the remainder of this year and 2018:

1. TRIAL SET FOR APRIL 15, 2019
The trial of this matter is scheduled for a three to four week JURY TRIAL in FAYETTEVILLE, ARKANSAS, beginning on APRIL 15, 2019, at 9:00 a.m. The case will be tried to an nine (9) person jury–unanimous verdict required. Counsel are directed to report to the Fifth-floor Courtroom by no later than 8:30 a.m. on the first day of trial unless otherwise notified.
2. FINAL PRE-TRIAL CONFERENCE
A Final Pre-Trial Conference shall be conducted pursuant to the provisions of Rule 16(e) on APRIL 2, 2019, beginning at 9:00 a.m.
3. AMENDMENT OF PLEADINGS
Leave to amend pleadings and/or to add or substitute parties shall be sought no later than OCTOBER 19, 2017.
4. EXPERT DISCLOSURES
(a) Class Expert Witnesses Plaintiffs’ deadline to provide disclosures and written reports for class experts pursuant to Rule 26(a)(2) is OCTOBER 15, 2017. Defendants’ deadline to provide class expert witness disclosures and written reports pursuant to Rule 26(a)(2) is NOVEMBER 30, 2017. The deadline to provide disclosures and reports of rebuttal experts (i.e. whose testimony will be offered solely to contradict or rebut the expert opinions offered by an opposing class expert) is DECEMBER 15, 2017. (b) Merit Expert Witnesses Plaintiffs’ deadline to provide disclosures and written reports for merit experts pursuant to Rule 26(a)(2) is AUGUST 31, 2018. Defendants’ deadline to provide expert merit witness disclosures and written reports pursuant to Rule 26(a)(2) is OCTOBER 5, 2018. The deadline to provide disclosures and reports of rebuttal experts (i.e. whose testimony will be offered solely to contradict or rebut the expert opinions offered by an opposing merit expert) is OCTOBER 19, 2018.
5. DISCOVERY
The scope of discovery may include both class and merits discovery. That said, discovery which clearly has no purpose other than for merits issues should be deferred until after the Court rules on class certification. The discovery deadline is NOVEMBER 16, 2018. The parties may conduct discovery beyond this date if all parties are in agreement to do so. To avoid later misunderstandings, such agreements should be reduced to a writing which describes the type, scope, and length of the extended period of discovery. That said, the Court will not resolve any disputes which may arise in the course of extended discovery. All discovery requests must be propounded sufficiently in advance of the discovery deadline to allow for a timely response. Witnesses and exhibits not identified and produced in response to Rule 26(a)(1) Initial Disclosures, and/or in response to subsequent discovery requests, may not be used at trial except in extraordinary circumstances. The Court will not grant a continuance because a party does not have time in which to depose a lay or expert witness.
6. MOTIONS DEADLINES (a) Class Certification Motions: The deadline to file class certification motions is JANUARY 19, 2018. < Responses to class certification motions are due not later than six (6) weeks after the motion is filed. < Replies are due not later than three (3) weeks after the response is filed.

A settlement hearing was scheduled for January 31, 2019 in the event that the parties decide to settle.

ORDER SETTING SETTLEMENT CONFERENCE
This case has been referred to the undersigned for a settlement conference. All parties and their lead counsel are hereby ORDERED TO APPEAR before the undersigned at the U. S. Federal Building, 35 E. Mountain, Fayetteville, Arkansas, in Room 210 at 9:00 A.M. on January 31, 2019. All participating attorneys must be of record. An insured party shall appear by a representative of the insurer with the complete authority to agree to a settlement up to the policy limits. An uninsured corporate party shall appear by a representative authorized to agree to a settlement. If a public entity is a party, all of the members of the board of the public entity, or a quorum of the entity, who have complete authority to agree to a settlement–or a representative given such authority by the board members–shall appear. The complete authority to agree to a settlement means that the representative must have the authority to make an independent assessment of the value of the case and proposed settlement terms as the settlement discussions proceed. Each party shall, before arriving at the settlement conference, ascertain in good faith the best settlement proposal that such party can make and be prepared, if asked by the undersigned, to communicate that settlement proposal to the under-signed in confidence. If no settlement discussions have taken place, the court encourages an exchange of demands and offers prior to the settlement conference.

K.P. Yohannan and his co-defendants will need to be in attendance for this conference.
GFA must now submit to scrutiny that the organization has been resisting. GFA has not published an audited financial statement since FY 2013 and lost membership with the Evangelical Council for Financial Accountability in October, 2015.
I believe the GFA action is one of the largest evangelical charities to face a lawsuit of this kind.

Gospel for Asia Founder K.P. Yohannan Gives the Gift of Worship on His Birthday; Hand Kissing Too

Happy Founders Day!
Forgive the late wish for a happy Founder’s Day. In the Believers’ Church, K.P. Yohannan’s birthday is considered a special day and singled out for celebration.

Founder’s Day

[March 8]

This is the Birthday of our Metropolitan. On this day, the Church shall organize compassion ministries such as providing food for the poor and beggars, social work, gift distribution to the poor and downtrodden, etc. These activities fulfill the dream of our Metropolitan to love others as Jesus loved us.

In addition to the social work, the birthday celebration video slips in a little self-worship to the festivities. Watch the Believers’ Church television tribute to the founder of Gospel for Asia, His Eminence the Most Reverend Metropolitan Dr. K.P. Yohannan. From the Athmeeyayathra Television Facebook page:

Ring Kissing or No?
Remember the controversy over ring kissing in the Believers’ Church? One of the original complaints of former GFA staffers related to the undue reverence given to Yohannan as illustrated by the custom of kissing Yohannan’s ring. Yohannan not only denied that it was a part of his experience in India, he said he never saw it happen. Then video surfaced of newly initiated pastors kissing Yohannan’s ring.
Now in this video, we can see that at least some of his admirers continue to practice ring kissing (or at least hand kissing).

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

For GFA supporters who claim Believers’ Church is evangelical like Calvary Chapels here in the United States, videos like this must be hard to integrate into their GFA narrative. In any case, donors need to understand that when they give to GFA, they are supporting this field partner in India.

New RICO Suit Brought Against Gospel for Asia

I reported earlier this week that Garland and Phyllis Murphy, former Gospel for Asia donors filed a motion to join the RICO lawsuit initiated by Matthew and Jennifer Dickson. A separate suit was filed yesterday by the Murphys.

Read the Murphys’ complaint here.
The complaint is similar to the one filed by the Dicksons but has a separate case number from Dickson’s case and follows a motion to withdraw the earlier request to join the Dickson’s case.

Plaintiffs’ Motion to Withdraw Proposed Intervention Motion
Plaintiffs respectfully move the Court to withdraw the motion to intervene [Doc. 48] filed on February 6, 2017. The proposed intervenors, Garland D. Murphy, III, M.D. and Phyllis A. Murphy, filed an independent but related action on February 16, 2017 which was assigned Case No. 5:17-cv-05035-TLB. Defendants do not oppose this motion to withdraw.

So now GFA is defending itself against two RICO lawsuits with the potential for others to join the existing classes or for additional suits to be filed.

Gospel for Asia Appeals the Denial of a Stay in the RICO Lawsuit

Gospel for Asia really doesn’t want to enter discovery in their defense against allegations of corrupt financial practices and fraud.
Last week, after the Western Arkansas District Court rejected GFA’s request for a stay (pause in the case) while GFA’s appeal is being heard, GFA promptly appealed that denial yesterday.
Read GFA’s appeal here.
In the appeal, GFA “respectfully request[s] a stay under Federal Rule of Appellate Procedure 8 pending the outcome of this appeal.” GFA wants the case stalled while the mission organization appeals the District Courts refusal to compel the plaintiffs, Matthew and Jennifer Dickson, to enter arbitration instead of continue with the RICO suit. The Dickson were members of GFA and signed an arbitration agreement while they were involved with GFA. However, as donors and now as non-employees, the Dicksons want their claims heard in court. Furthermore, the Dicksons represent a class of donors who allegedly have been defrauded by GFA’s deceptive financial practices. Thus far, the federal court has sided with the Dicksons.
In the space of several months, GFA went from being a charter member of the Evangelical Council for Financial Accountability and a full participant in the federal government’s Combined Federal Campaign fund drive to being evicted from ECFA and kicked out of the federal program. According to those who have been questioned by federal investigators, GFA is also under investigation for possible illegal practices as well.