Victims clarified in fraud case

The Securities and Exchange Commission’s Fort Worth office on Wednesday clarified information that it had previously released about a lawsuit filed against a California businessman and four associates who are accused of bilking several evangelical Christian ministries.

Originally, the SEC said those who lost money by investing in IPIC International Inc., based in Ontario, Calif., included Benny Hinn Ministries in Irving and Covenant Church in Carrollton. However, the SEC’s statement Wednesday said that while some members of these churches lost money, the ministries themselves weren’t investors.

“The evidence upon which the SEC relies shows that various persons associated with these ministries invested in the program,” said Spencer Barasch, associate district administrator of the SEC. “The SEC does not contend that the specific entities invested.”

The FBI arrested five associates of IPIC on Tuesday after a Dallas grand jury indicted each of them on one count of securities fraud and two counts of money laundering. The indictment alleges that the defendants – including Gregory Earl Setser, 47, recently of Canton, Texas, and now living in Rancho Cucamonga, Calif. – represented to investors that they operated a successful import/export business.

They promised investors that with minimal risk, they would earn 25 percent to 50 percent returns in three to six months.

Don Price, chief operating officer for Benny Hinn Ministries, issued this statement Wednesday: “Pastor Benny Hinn was one of the victims who invested money with Gregory Setser. To an absolute certainty, the ministry never endorsed Gregory Setser, and the ministry did not invest any donor dollars with Gregory Setser.”

Similarly, Frank Sommerville, an attorney representing Covenant Church, said the church didn’t invest with IPIC.

“We understand from the SEC that some members of Covenant were investors,” Mr. Sommerville said. “We don’t have any way of independently verifying what the SEC is telling us. But the church never was and never will be” an investor in IPIC.

Meanwhile, a hearing to decide whether three of the defendants will be allowed to post bail was continued until next week in U.S. District Court in Riverside, Calif. The government argued that Mr. Setser; his wife, Cynthia; and his sister, Deborah, have the desire and means to leave the country if released from jail.

But U.S. Magistrate Judge Stephen Larson said he was inclined to grant bail, secured by cash or property, because the government’s information that the defendants would be able to tap foreign bank accounts was too vague. The hearing is due to resume Tuesday.

Staff writer Mike Kataoka of The Press-Enterprise in Riverside contributed to this report.

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