SEC files fraud complaint against church

AP, July 23, 2002
http://www.boston.com/dailynews/204/nation/SEC_files_fraud_complaint_agai:.shtml

By Shannon Dininny, Associated Press, 7/23/2002 05:59

INDIANAPOLIS (AP) In a complaint filed in U.S. District Court, the SEC has accused the fund-raising arm of the Church of God of defrauding investors out of $85 million.

The Securities and Exchange Commission said in the court documents filed Monday that it had negotiated a preliminary settlement with the group, called Church Extension of the Church of God. The fund-raising arm is accused of artificially inflating income in correspondence with investors and misleading them about the risk of investments.

A judge must approve the settlement, which Church Extension entered without admitting or denying the allegations.

Church Extension was created in 1921 to raise funds for church construction and renovations to existing churches of the Church of God, which has more than 2,200 affiliated congregations and more than 230,000 members nationwide. The church, based in Anderson, was established in 1881.

In addition to Church Extension, the complaint named former president James Perry Grubbs, affiliate United Management Inc., and its former president Shearon Louis Jackson.

The settlement requires Church Extension to establish an oversight committee and return investor money, Church Extension spokesman Joshua Robbins said.
(…)

The complaint seeks repayment of $81 million plus interest from Church Extension and seizure of assets from Grubbs and Jackson.

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