(Story: Matters India) A court in the United States has initiated a lawsuit against an Indian American Pentecostal leader who is accused of misdirecting millions of dollars his organization collected for charitable works.
The United States District Court for the Western District of Arkansas has recently taken up the case filed by the Dallas-based Stanley Law Group against Kadappiliaril Punnose Yohannan or K P Yohannan, as he is known, the founder director of the Gospel for Asia (GFA), the second largest Christian missionary agency in America.
The Kerala-born missionary is now settled in Dallas-Fort-Worth Metroplex, Carrolton, Texas. The class action lawsuit has also named several of his family members. They are accused of fraudulently soliciting funds and misdirecting the money to the founder’s kitty.
The lawsuit comes after the Evangelical Council for Financial Accountability (ECFA) cut ties with the organization last October for violating five of its seven core standards.
In the 108-page document acquired by The Christian Post, on February 16, plaintiffs allege that GFA, Yohannan, and other GFA officials misrepresented to donors how, when, and where charitable donations would be spent, and funneled hundreds of millions of dollars the organization had collected into for-profit businesses and an expensive headquarters.
Matthew and Jennifer Dickson, who are listed as plaintiffs in the lawsuit, charge defendants with violations of RICO and the Arkansas Deceptive Trade Practices Act, as well as fraud and unjust enrichment.
Listed as defendants along with Yohannan are: his wife, Gisela, a member of the Board of Directors of GFA; his son Daniel Punnose, also a member of the Board of Directors of GFA and a vice president; David Carroll, who serves GFA in multiple capacities, including Chief Financial Officer; and Pat Emerick. Emerick, according to the suit, is a United States citizen who resides in Ontario, Canada. He serves as the director of the Canadian affiliate of GFA.
Gospel for Asia according to the lawsuit is a global missionary organization, founded in 1978, that operates in South Asia, primarily within India. The organization tells potential donors that it supplies the “poorest of the poor” with food, provisions, and a Christian message, but lead attorney Marc R. Stanley said in a statement that GFA has been exploiting the goodwill of Christians, American Bazaar reported.
GFA is present in numerous countries, including Bhutan, Sri Lanka, Nepal, Myanmar, Bangladesh, Cambodia, China, Laos and Thailand.
“K.P. Yohannan and his Gospel for Asia inner circle have been exploiting the goodwill and generosity of devout Christians around the country for years. Gospel for Asia should return all the money it’s taken from donors who thought they were contributing to charity,” said Stanley.
According to the lawsuit: “Between 2007 and 2013, GFA solicited over $450,000,000 in donations from the United States alone, where the majority of GFA’s donors reside. Well over one million unique donations are made to GFA each year from tens of thousands of donors who give one time or on a recurring, sponsorship basis. However, despite repeated, explicit guarantees from GFA to donors, only a fraction of the donated money supports the people and causes for which it was donated, as Defendants redirect it for their own purposes.”
While the organization is recognized as a 501(c)(3) non-profit entity and a “religious order” in the U.S. by the Internal Revenue Service and is therefore not required to publish its financial statements, it enjoys no such exemption in India.
As a foreign charity in India, GFA is required to publicly account for all funds it spends in the country, pursuant to the Indian Foreign Contribution Regulation Act of 2010.
A financial analysis of the reports submitted to the Indian Government (“FC-6 forms”) for Believers Church, Gospel for Asia-India, and the related limited liability companies Last Hour Ministries and Love India Ministries, shows, according to the lawsuit, just how little of the money GFA sends to India is actually spent on the projects and items U.S. donors designated.
Concern was also raised about the use of nearly $20 million in donations earmarked for foreign missions for the construction of GFA’s new multimillion dollar headquarters in Texas.
When ECFA officials asked about the high cash balance in partner field accounts held in India, they were told “it was important to maintain the high balances in case the Indian government decided to block funds being transferred into the country.
“The source of the balances was primarily from donor-restricted gifts to GFA, often raised in response to gift solicitations that communicated urgent field needs. ECFA staff expressed concern that the high reserves may not comply with ECFA Standards 4 and 7.1,” the letter continued.
It was only after the ECFA raised this concern that the organization put forward a plan to reduce the reserve cash balances to $72 million in late July and then to $11 million in late August. GFA staff told the ECFA that they had no control over field partners.
In a meeting with Yohannan in July as well, the ECFA said he told them he had no idea the field offices held such high cash balances.
Charisma News, a spiritual news outlet, reported that the GFA board of directors says the lawsuit stems from a misunderstanding.
“We learned of the lawsuit when reporters began to call us. It’s worth noting, the first to post anything related to the lawsuit was a blogger who has leveled a relentless attack on Gospel for Asia for months,” the board said in a statement to Charisma News.
“We appreciate the role and responsibility—and often good intentions—of journalists in the ‘new media’ and in traditional media, but we have been grieved to discover that too many of them have chosen to consider us ‘guilty until proven innocent’ as opposed to innocent until proven guilty.’”
According to Wikipedia, Yohannan formed a branch of GFA in Kerala, in 1981, with an Indian headquarters being set up in Tiruvalla in 1983. In 1993, GFA began founding its own network of churches in Asia, including the Believers Church which is Episcopal in governance.
The operations of Gospel for Asia and Believers Church were scrutinized after Believers Church, under the guidance of Yohannan, has also purchased a controversial 2,000-acre rubber estate in Kerala.