Judge: Church of God fraud case closed

August 8, 2014 Judge: Church of God fraud case closed Deadline set to settle investment fraud case with Church of God members

By Traci Moyer The Herald Bulletin The Herald Bulletin The Herald Bulletin Fri Aug 08, 2014, 08:25 PM EDT

ANDERSON -- No objections have been filed preventing the closure of a decade-old investment fraud case involving the Church Extension of the Church of God.

The deadline for objections to a plan resolving the case was Aug. 4.

In 2002, the U.S. Securities and Exchange Commission (SEC) filed an $85 million investment fraud suit against the Church Extension, United Management Services Inc., James Perry Grubbs and Shearon Louis Jackson alleging Grubbs and Jackson misled investors.

According to court documents, the Anderson-based Church Extension helped fund construction or renovations of churches for the Church of God and from 1996 to 2002 selling millions of dollars in investment notes to its church members.

Investors were told the funds from the sale of the investment notes went for construction or renovations, but court records state the money raised made interest and principal payments to prior investors and that the safety and the risk associated with the investment notes was misstated.

During a final hearing in June, U.S. District Court Southern District of Indiana Judge David Hamilton ruled that pending any additional objections the case would be closed. The deadline for objections was Aug. 4, but court officials say none were filed.

Hamilton approved the final terms of the case and granted related relief in the case. His ruling allows for a final distribution to creditors. Any cash remaining in the estate for undeliverable checks will be sent to Indiana Unclaimed Property.

The ruling states that an order to dissolve the receivership, discharge all parties from additional duties, approve all pending fee applications and allows properties creating a financial drain on Church of God assets to be disposed of must be filed on or before Oct. 27, 2014.

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Judge: Church of God fraud case closed