Ministries' creditors can expect wait
Greater Ministries investors are told there are no fast, sure ways to get their money back.
The Tampa Tribune, October 19, 1999
By Michael Fechter
TAMPA - With cancer in his body and a savings account that might not cover medical costs, Richard Dugan thought he had been saved.
The Atlanta architect heard about a church program that could double his money in 17 months or less.
``It seemed like it was an answer to prayer,'' Dugan said.
Now he wants to know what happened to the $100,000 he gave Greater Ministries International in Tampa. He was among 100 people from across the country who attended a preliminary creditors meeting at the Tampa Convention Center. A court-appointed receiver and a bankruptcy trustee explained what they will do to try to repay Dugan and 18,000 other investors. More than $100 million was invested in the now bankrupt ministry.
Some consider themselves victims of a massive fraud. Others remain loyal to the church and say everything would have been fine if it weren't for a meddling government.
``Nobody feels more victimized than Greater,'' said Barbara Ketay, a legal assistant for the Ministries.
To demonstrate that feeling, Greater Ministries supporters picketed outside the convention center with signs decrying the government's involvement. ``God is not bankrupt,'' one button said.
The group distributed fliers and newsletters hinting at tax trouble for creditors and asking people how they will face the Lord after crossing the church.
``You may want to stop and pray and ask for wisdom for yourself and for mercy for the people who have come against Greater Ministries. The Lord always has the last word,'' the flier said. ``Will you be prepared to answer to him for your actions?''
``These guys have no shame,'' said Tom Krebs, once Alabama's securities commissioner. Now in private legal practice, Krebs worked with state securities officials in Alabama and Ohio to se cure the court-appointed receiver in August.
Securities regulators from Ohio and Alabama persuaded a federal judge that Greater Ministries' financial program called Faith Promises was an elaborate Ponzi scheme. Where officials boasted of enormous wealth generated by international mining and offshore trading, money from recent investors simply went out to pay more established investors.
Information secured through the receivership is fueling new investigations by securities regulators in a number of states.
Seven Greater Ministries leaders, including founder Gerald Payne and his wife, Betty, are scheduled to go on trial in Tampa in December on a 20-count federal indictment charging money laundering and fraud. The trial was to have started this month but was delayed in part because of the receivership, which evicted Greater Ministries from its own headquarters.
None of that will quickly return money to people who lost it.
With at least one mortgage foreclosure hanging over his head and numerous tax liens on the horizon, court-appointed receiver James Beasley sought Chapter 11 bankruptcy protection for Greater Ministries' assets.
The move automatically stalls any pending foreclosures and protects investors' money.
``Our sole responsibility to the court and to you all is to try to get back as much of your money as we can,'' Beasley said.
That could take years.
Bankruptcy trustee Kevin O'Halloran plans to auction off the group's biggest known asset, the Executive Inn Hotel in Owensboro, Ky. That should net about $5.5 million. A similar auction of Greater Ministries' Bird Street headquarters should bring $500,000 after paying off its mortgage.
The search continues for accounts and other real estate to be liquidated.
Thomas Bailey, 31, drove from Nashville, Tenn., to learn what happens next. He said he and a number of friends lost a combined $3 million. They put their trust in the church group, which said it financed missionary work and fed the homeless with the money.
It sounded like the best of both worlds, Bailey said. Instead, ``it caused divorces, repossessions of homes. Businesses have closed.''
