Attorneys Battle over GFA World in Toronto Courtroom
Donors to ministry formerly known as Gospel for Asia seeking class action status
Attorneys representing donors who say millions of dollars in gifts to GFA World were misappropriated argued against attorneys defending the ministry, formerly known as Gospel for Asia, during a certification hearing in a Toronto Superior Court last Monday and Tuesday.
Justice Peter J. Cavanaugh will determine if the case can go forward as a class action suit against GFA World. The suit, filed in early 2020, accuses GFA of misusing more than $100 million in Canadian donor gifts.
Plaintiff Greg Zentner, a former GFA donor, said, “Thousands of well-intentioned Canadians were duped into collectively donating tens of millions of dollars to an international fundraising syndicate” that used the funds “for their own use, including for the construction of a luxurious compound and personal residence in Texas.” He is asking the Canadian court to require GFA World to refund the $20 million in Canadian funds used to constrict its new Texas headquarters, plus pay $150 million in damages.
Among the more than a dozen claims made by attorneys representing GFA World is the claim that Zentner isn’t qualified to class status, since he quit donating to the group before he filed his suit.
GFA attorneys also questioned the credibility of Nova Scotia pastor Bruce Morrison, a longtime supporter of GFA World who grew suspicious and started investigated how the ministry handled its money. Zentner is a member of Morrison’s church.
In a statement provided to MinistryWatch, Ranjan Agarwal, an attorney for GFA World, said, “GFA Canada is confident that, at all times, its conduct was appropriate. GFA Canada denies these allegations and plans to vigorously defend this action.”
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Tale of the Tables
One of the documents presented in the lawsuit’s documents was written by Bruce Morrison and titled, “Responding To KP Yohannan’s Appeal To Canadian Donors Following GFA-US Lawsuit Settlement,” is among the thousands of pages of evidence that Justice Cavanaugh must wade through.
Morrison’s report contains a series of financial tables that present the Canadian donors’ reasons for suspicion. Morrison walked Ministry Watch through the tables in a phone interview.
Canadian tax documents show millions going to India. Table 1 shows income and expenditure figures for 2007 to 2014 that GFA World reported to the Canada Revenue Agency, which is similar to America’s Internal Revenue Service. In its annual T-3010 forms, GFA World reported receiving $108,397,549, in Canadian dollars, from Canadian donors, and reported spending $93,497,321 of that income in India.
But India tax documents show no Canada income. Table 2, which is based on GFA World’s annual reports to Indian tax authorities, shows that the ministry spent zero dollars in India over the same time period that Canadian forms show $93 million going to India. Morrison says the figures in Table 2 are based on the ministry’s FC-6 income statements submitted to the Ministry of Home Affairs, as calculated by Texas auditor Jason Watkins, whose concerns were first published by Warren Throckmorton in 2015.
U.S. lawsuit brings dramatic changes in cash flows. Expenditure patterns changed dramatically after 2015, when a lawsuit against the ministry was filed in the U.S. As Table 3 shows, GFA World transferred $36,974,936 from Canada to India in 2015, and transferred an additional to $81,299,483 to India in 2016.
Morrison explained that the sudden flow of cash to India was not ministry motivated. “After the lawsuit was filed in U.S. in 2015, they needed to get their money out of Western bank accounts and get it to India, where it wouldn’t be touched by the lawsuit,” he says.
Millions, unused in India, sit in bank accounts, earning interest. Although GFA World formerly pledged that 100 percent of its donations go to support urgent work in the field, millions actually sat in Indian banks, unused. Table 4 shows the annual amounts of interest revenue that GFA World generated from its unused cash. Table 5 adds interest earned to other income, generating total income figures for 2015-2018.
Hoarding mounds of cash is a recurring practice for GFA World. Before the ministry was kicked out of the Evangelical Council for Financial Accountability in 2015 for misleading donors and mismanaging finances, an ECFA investigation found that GFA hoarded as much as $259 million rather than spending the donated funds to the field.
GFA World expenditures vary widely, with funds flowing to dozens of additional entities. Table 6 shows how GFA World transferred donor dollars into a network of some 30 trusts that the Indian government says are little more than paper organizations designed to conceal the flow of funds.
In 2015, GFA World in India spent $70 million on Believers Church India (BCI), which was founded by GFA founder KP Yohannan. Nearly double that amount was transferred to BCI in 2017, even though BCI is not a part of GFA. It’s not clear how the church spent $200 million in two years.
And in 2015, GFA World in India spent $70 million on Ayana Charitable Trust (ACT), another ministry. The next year, spending on ACT rose more than 400 percent, to $159 million. Additional donor funds were transferred to two other ministries founded by Yohannan: Last Hour Ministry (LHM) and Love India Ministry (LIM).
In 2017, India’s Ministry of Home Affairs de-certified BCI, ACT, LHM, and LIM, meaning those entities could no longer accept foreign funds.
This de-certification brought another sudden change in GFGA cash flows, with money now flowing to nine additional ministries founded by Yohannan: Rebaboth Indian Gypsy New Life Trust (RIGNLT), Shekina Prophetic Mission Trust (SPMT), New Hope Foundation (NHF), Holy Spirit Ministries (HSM), Growth in Fraternity Trust (GIFT), Arul Shelter Home Trust (ASHT), Heavenly Grace Ministries (HGM), Peoples Organization For Empowerment of Tribals (POET), and New Lifeline Charitable Ministries (NLCM).
Altogether, these various entities spent nearly half a billion of donor dollars over a four-year period.
These entities are only the beginning of the separate entities Yohannan has created to receive and conceal cash influxes. A 2020 press release from India’s Ministry of Finance about its raids on Yohannan-related entities said:
The group operates about 30 trusts, registered across the country, and most of them exist only on paper and have been found to be used for routing the unaccounted funds and for accommodation transactions. It has been found that the modus operandi of the group is to systematically inflate expenses with the help of other parties, who would return the inflated amount in cash through domestic hawala channels to the functionaries of the group. The search has led to unearthing of a number of real estate transactions involving unaccounted cash payments. The group has also inflated the price in real estate transactions to show as if the money received in donations is being spent on the activities of the trusts.
GFA World attorneys have disputed some of Morrison’s findings, and have questioned his credibility, citing his lack of training in finance and accounting.
But Morison stands by his research, and is committed to following the legal action to its end, even if it takes years more.
“When a missionary organization or a church justifies unsound practices, others may be tempted
to overlook them by reason of the good the group does,” he wrote. “But when willful sin is introduced into the equation it is a completely different matter. It is no longer about a lack of discretion. it now becomes an issue of morality.”