One of the owners of a Christian non-profit company accused of defrauding churchgoers in Arizona and 12 other states has admitted funneling millions in investors’ money into offshore accounts as part of a pyramid scheme.
The Arizona Attorney General’s Office announced Tuesday that Gregg Wolfe of Chandler has agreed to turn state’s evidence against his partner, Edward Purvis, as part of a plea deal in a case that involved bribing a Chandler police officer and filing bogus legal claims against public officials.
Purvis has denied any wrongdoing in the case.
Purvis and Wolfe are the owners of Nakami Chi Group Ministries International, a Scottsdale investment company that promised investors, including pastors and members of Chandler Christian Church and Vineyard Church in Avondale, 24 percent annual returns on investments that were supposed to fund Christian charities.
“Wolfe admitted that . . . money was sent to a complex structure of offshore corporations set up by Purvis to avoid detection by investigators,” the Attorney General’s Office said in a news release. “In his plea agreement, Wolfe admitted that for about seven years, the investment monthly returns were paid by using new investor money to pay old investors.” That practice is commonly called a pyramid or Ponzi scheme.
In May, a grand jury indicted Purvis and Wolfe on charges of bribing a police officer into supplying them with investigative files from the Arizona Corporation Commission.
They also were charged with using police computers to dig up information on witnesses and a prosecutor working on the fraud case against them.
Former Chandler police Officer Bradley Forward pleaded guilty in March and agreed to testify against Purvis and Wolfe in exchange for reduced charges.
The grand jury also indicted Purvis and Wolfe on charges of filing bogus legal claims against public officials involved in the fraud case, including a judge, a clerk of courts and others.
Wolfe on Tuesday reached an agreement with the Attorney General’s Office in which he pleaded guilty to one count of solicitation to commit bribery of a public servant and four counts of attempted harassment of a public officer. Purvis, 38, is scheduled for a state trial on the bribery and harassment charges in February and faces a maximum 20-year prison sentence if convicted.
As part of his plea agreement, Wolfe, 46, has agreed to testify in an ongoing Arizona Corporation Commission hearing to shut down Nakami.
The Corporation Commission, which regulates securities, has been investigating Purvis and Wolfe for two years.
It moved against Nakami after an Arizona Republic investigation last year raised questions about the size and holdings of the company, which was using a Scottsdale post office box as its business address.
Investors said Purvis and Wolfe told them that their company was worth $170 billion and controlled assets around the world, including gold mines, Australian developments, telecommunication firms, banks and a Phoenix technology company.
State records showed that Purvis is a licensed practical nurse living in a Chandler home valued at $270,000 and that Wolfe is an ex-roofing contractor. Records indicated Purvis and Wolfe do not have broker, lender or banking licenses and had not filed paperwork related to mines in the state.
“Wolfe added that by August or September 2006, (Nakami) was unable to make payments to investors after a series of articles were published about an investigation into their activities,” the Attorney General’s Office said Tuesday.
State investigators said hundreds of thousands of dollars in investor money was used by Purvis for gambling, credit cards, jewelry, a down payment on a new house, a restaurant, a new car and other expenses.
Despite the allegations, pastors and members of the Valley churches steadfastly defended Purvis and Wolfe, saying there was no evidence of wrongdoing.
On Tuesday, Vineyard Pastor John Farmer, who had expressed support for Purvis and Wolfe and said he invested in Nakami, declined comment on Wolfe’s admission.
“I just don’t know what to say about this right now,” Farmer said.