IBJNews

Faithful are victims at both ends of church scam

Back to TopCommentsE-mailPrintBookmark and Share

Nearly a decade after the government took over an Indiana brokerage firm whose leaders scammed more than 10,000 devout investors out of millions of dollars they believed would help build churches, officials are still trying to get their money back without forcing congregations out of their houses of worship.

A federal judge froze Alanar's assets in 2005 at the request of the Securities and Exchange Commission, and the brokerage based in Sullivan, a city of around 4,000 people about 80 miles southwest of Indianapolis, was placed in receivership.

Six years later, Vaughn Reeves Sr., was sentenced to 54 years in prison following his conviction on securities fraud charges. Reeves, a 69-year-old former pastor, is not eligible for release until 2035. His three sons also went to prison for taking part in the scheme.

The group used prayers and Bible passages to convince about 11,000 investors into buying bonds worth $120 million secured by mortgages on construction projects at about 150 churches in 35 states, according to court documents. But the religious project was actually a Ponzi scheme that gave Reeves and his sons millions of dollars to spend on themselves.

For eight years now, the court-appointed receiver has been trying to get the investors' money back. Much of that money comes from small, independent churches or related operations like daycares that took loans from Alanar because they couldn't get bank loans, Indianapolis attorney Michael Rusnak, the current court-appointed receiver, said Wednesday.

"If you can get an agreement, that's the way we like to do it if we can," said Rusnak, who was in Seattle to try to work out a financial arrangement with one of the churches, most of which are located in poor neighborhoods.

About 40 of the churches have managed to pay off the entire amount of their bond, he said, but most haven't, and if an arrangement can't be made, the receivership has to seize the property.

Rusnak said he wasn't certain how many churches had been foreclosed, but he said it was "few." Court records, including a report filed Wednesday in U.S. District Court in Indianapolis, don't include a total number.

"We talk about foreclosure ... that's a last resort," he said.

In some cases, congregations that couldn't pay off the bond have quietly abandoned their churches, sometimes walking away from property valued as high as $150,000, Rusnak said.

James Voyles, the Indianapolis attorney who represents what is left of Alanar, declined comment.

Rusnak said the case is approaching its end. About 44 percent of investors' money — in some cases, their life savings — has been recovered.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I keep wondering why I keep hearing about this problem of corporations leaving America, and I never hear a reasonable proposal to lower corporate tax rates and raise personal rates on income from capital gains and dividends, especially for high earners. It is just too simple of a solution for Congress to embrace?

  2. Are you financially down and you need money to settle your dept,or you need money to start up a business or to invest on a huge business,we also offer Loans to individuals, Firms and cooperate bodies at low interest rate , loan terms determinant,Loan amount between the sum of $5,000.00 to $100,000,000.00. US Dollars And Euro. Loan for developing businesses a competitive edge/ business expansion. We Offer The Following Kinds Of Loans. Personal Loans (Secure and Unsecured) Business Loans (Secure and Unsecured) Consolidation Loan FIRST INFORMATIONS NEEDED ARE: BORROWER’S DATA’S INFORMATION,FILL AND RETURN FOR QUICK START UP PROCESS. Name:_________ Last Name:_________ Age:_________ Contact Address:_________ Country:_________ Amount Needed as Loan:_________ Loan Duration:_________ Phone Number__________ Monthly Income/Yearly Income:_________ Purpose for Loan:_________ Occupation:_________ How Soon is Loan Needed__________ Email via: albertbrownfirm@outlook.com

  3. is a disaster. SR37 already needs to be built to interstate standards between 465 and SR144. Southport Road is a mess each morning and evening.

  4. Bass Pro Shops would be good for the mall as well as a Giant Eagle Market District or a Jungle Jim's International Market Place grocery store like the one near Cincinnati Ohio.A Disney quest indoor theme park would be good.An Academy outdoor store would be good too.Indoor Circus shows and magic shows would be good as well. A casino with sports bar would be good.A Disney theater inside that shows movies and Broadway shows would work.Nashville Tennessee concert shops with indoor neon lights would be good.How about a theater that shows travel shows and theme parks. A train store would be good.How about a giant toy store with high tech video games.

  5. This development is in addition to Allpoints Midwest 5, Aitrtek, a recent FedEx and more in Plainfield. Greenwood and Brownsburg also have similar projects.

ADVERTISEMENT