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. Angela IS the best RD

  2. We are a nation of speed. All of our younger lives are filled with deadlines, quotas and bottom lines. We start to ease out of the pressured rat-race when we finally see "retirement." The most enjoyable travel on the planet is passenger rail service. Indy to Chicago does not beat Megabus or Southwest Airlines in speed. Passenger rail however has the best seating, mammoth legroon, seat backs that recline to more than 45 degrees and employers that really want you to return as a customer. Indiana municipalities need to maintain subsidies to support this transportation mode. Losing it is loss for all of us.

  3. Good day! I just want to testify how i got my loan from Mr. Eric Lefkofsky after i applied several times from various loan lenders who claimed to also testify right in this forum,i thought the testimonies where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan. Until a friend of mine introduce me to this popular Mr. Eric Lefkofsky who promised to help me and indeed he did as he promised without any form of delay. I never thought there are still reliable loan lenders until i met Mr. Eric lefkofsky who indeed helped me with the loan and changed my belief. I promised to share this testimony after I got my loan. I don't know if you are in any way in need of a genuine and urgent loan,free feel to contact Mr. Eric Lefkofsky via their email{grouponfunding@hotmail.com}

  4. Its a THUG issue. Bleecker Street and NYX are thug bars. They attract thugs of all races. Places that attract thugs need to be kicked out of Broad Ripple. Ain't nobody got time for that!

  5. Hello everyone, My name is Marian Gareth, I am from the Texas, United State, am here to testify of how i got my loan from Mr Andre Frank {frankloancompany@yahoo.com} after i applied Two times from various loan lenders who claimed to be lenders right in this forum,i thought their lending where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan.Until a friend of mine introduce me to Mr Andre Frank the C.E.O of Andre Frank Loan Company who promised to help me with a loan of my desire and he really did as he promised without any form of delay, I never thought there are still reliable loan lenders until i met Mr Andre Frank, who really help me with my loan and changed my lief for better. I don't know if you are in need of an urgent loan, free feel to contact Mr Andre Frank on his email{ Frankloancompany@yahoo.com} for help

ADVERTISEMENT