Church calls FRM money 'tithings'
Pastor Robert Farah’s Center Harbor Christian Church did receive a "substantial" amount of money a son’s Financial Resource Mortgage, but the money was the result of "tithings," not ill-gotten gains, the church explained in a court filing last week.The filing in U.S. District Court in Concord came in response to a motion filed by the U.S. Securities and Exchange Commission to freeze the church’s assets.The church, in its first answer to the SEC complaint, admitted that his son, Scott Farah, engaged in a Ponzi scheme that defrauded at least 150 investors of $20 million. The SEC said that the church received some $669,000 that FRM was supposed to earmark in certain investments.While disputing the amount, the church agreed that Scott Farah engaged in fraud, but that the church "was not aware of the asserted Ponzi scheme to any extent whatsoever" -- and while the church "did receive substantial tithings from FRM," it shouldn’t have to pay anything back.FRM got something "from making a charitable contribution that would enhance its image in the community," so therefore the church was not "unjustly enriched."Besides, the money has already been spent "on legitimate costs and expenses of operating the church and to carry out its charitable activities including, at the time, the operation of a food pantry," according to the filing.The church also said it only had $900 in its bank account and needs that account open to continue its charitable work. "Clearly it does not wish to have its bank accounts frozen," the church’s lawyer said in the objection.Also, according to the filing, there is no need for a court to order an accounting of the church finances, since Pastor Farah has already answered questions under oath, and an SEC representative could review financial records "in a reasonable fashion."The SEC isn’t the only one going after church assets. The trustee of FRM’S bankrupt estate ahs already filed an adversary proceeding to include the church’s assets in the sprawling bankruptcy case, which not only involves FRM and related businesses and individuals but dozens of trusts used to sell fractionalized shares in particular investments.The trustee’s case against the church is still in an early stages. -- BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW Edit ModuleShow Tags