Greek Orthodox Archdiocese Official Arrested On Wire Fraud Charges

The U.S. Attorney's Office for the Southern District of New York announced on Monday the arrest on wire fraud charges of Jerome Dimitriou, former Executive Director of an unnamed non-profit organization. The National Herald  identifies Dimitriou as former Executive Director of Administration of the Greek Orthodox Archdiocese of America for 19 years until he was fired in 2017. According to the SDNY release:

DIMITRIOU is charged with committing two embezzlement schemes:  In one, he allegedly embezzled more than $488,000 from Organization-1 by directing subordinates to issue him unauthorized excess salary payments; in the other, he allegedly charged hundreds of personal expenses to his Organization-1 credit card, without authorization, costing Organization-1 at least tens of thousands of dollars. 

Suit Charges Mormon Church With Intentional Misrepresentation of Its History

A former member of the Mormon Church filed suit this week in a Utah federal district court accusing the "Mormon Corporate Empire" of fraud, breach of fiduciary duty, RICO violations and intentional infliction of emotional distress. The 75-page complaint (full text) in Gaddy v. Corporation of the President of the
Church of Jesus Christ of Latter-day Saints, (D UT, filed 8/5/2019), asks for certification as a class action and contends:

2. This is not a claim for propagating false religious beliefs as part of the Mormon Church. Rather, it is a claim that the material facts upon which Mormonism is based have been manipulated through intentional concealment, misrepresentation, distortion and or obfuscation by the COP to contrive an inducement to faith in Mormonism’s core beliefs.

3. For almost 200 years, the COP, through its agent leaders, has represented Mormonism to be the restoration of the gospel of Jesus Christ, claiming that the divine authority essential to that gospel (Melchizedek and Aaronic priesthoods) was taken from the Earth after Christ’s crucifixion. It was purportedly restored hundreds of years later to Joseph Smith, Jr....

4. When the true facts are substituted for the longstanding false orthodox narrative, the story that emerges has shocked devoted Mormons who have made life-altering decisions based upon a scheme of lies.

Courthouse News Service reports on the filing of the lawsuit.

Two Church Leaders Plead Guilty To Tax Fraud Conspiracy Involving Diversion of Church Funds

On Tuesday, the U.S. Attorney's Office for the District of New Jersey announced that two church leaders have plead guilty to a charge of conspiracy to commit tax fraud:

The leader and the main treasurer of the Israelite Church of God in Jesus Christ admitted their respective roles today in a scheme in which both men caused the church to pay millions of dollars in personal expenses for the leader that the leader then omitted from his personal tax returns....

Grant and Warrington used their leadership positions in the church to divert to Grant millions of dollars belonging to the church and its members for Grant’s personal use and benefit. The defendants used a variety of methods to carry out the scheme. For example, Grant and Warrington created a purported entertainment company that portrayed Grant as an industry mogul whose wealth was derived from his success in the industry, thereby concealing from church members that his lifestyle was supported entirely by the church and donations from its members. 

10th Circuit: Suit Against FLDS Leader Warren Jeff's Lawyers Can Move Ahead

In Bistline v. Parker, (10th Cir., March 14, 2019), the U.S. 10th Circuit Court of Appeals in a 2-1 decision reversing a district court's dismissal of the case, allowed various former members of the polygamous FLDS Church to move ahead with claims against the law firm that represented FLDS Prophet Warren Jeffs.  The court, in its 72-page opinion, summarizes plaintiffs' allegations:

Plaintiffs allege that defendants: (1) directly worked with Mr. Jeffs to create a legal framework that would shield him from the legal ramifications of child rape, forced labor, extortion, and the causing of emotional distress by separating families; (2) created an illusion of legality to bring about plaintiffs’ submission to these abuses and employed various legal instruments and judicial processes to knowingly facilitate the abuse; (3) held themselves out to be the lawyers of each FLDS member individually, thus creating a duty to them to disclose this illegal scheme; and (4) intentionally misused these attorney-client relationships to enable Mr. Jeffs’ dominion and criminal enterprise.

On plaintiffs' legal malpractice claim the majority said the district court should determine whether a lawyer-client relationship existed between defendants and various plaintiffs, saying:

If individuals have been cut off from outside resources because of sincerely held religious beliefs and have been actively and repeatedly deceived as to an attorney’s responsibilities and allegiances towards them personally, it is plausible that they reasonably believed they were individually and collectively represented by that attorney.

The district court had dismissed many of plaintiffs' claims on statute of limitations grounds. The Court of Appeals reversed, saying in part:

[D]efendants were allegedly tortfeasors who actively concealed wrongdoing from plaintiffs who plausibly contend they did not have enough knowledge to support a duty to inquire. Plaintiffs have alleged facts to support their claim that defendants had a direct fiduciary relationship of trust to plaintiffs, which they intentionally exploited to mislead plaintiffs over an extended period of time and arguably up to the time plaintiffs filed this action. The fraudulent concealment doctrine thus may operate to toll the limitations periods for plaintiffs’ claims of legal malpractice, breach of fiduciary duty, and civil conspiracy, making it inappropriate to dismiss these claims at this stage.

The court also allowed certain plaintiffs to move ahead with claims under the Trafficking Victim Protection Reauthorization Act. Judge Briscoe filed a dissenting opinion. Courthouse News Service reports at greater length on the decision.

In South Africa, Funeral Homes Sue Church Over Fake Resurrection

In Johannesburg, South Africa, three funeral parlors have filed suit for reputational damage against Alleluia Ministries International leader Prophet Alph Lukau claiming that he used their hearse to carry out a hoax in which he purported to resurrect a dead person. According to news reports yesterday, church representative tricked the funeral homes into providing a coffin and transportation for the supposed body.  Video of the purported resurrection went viral after it was placed on the church's social media sites. The Star further reports:

Lukau had claimed that a man, whom he referred to as Elliot, died on Friday, and was on his way to Zimbabwe on Sunday before the pastor brought him back to life.

Meanwhile, snaking queues of people from as far as the US and the Caribbean waited to buy “holy oil” and “prophetic salt”....

The funeral parlors have also filed police complaints.

7 Indicted For Fraud In Payments for Internet Equipment For Yeshivas

Last Wednesday, the U.S.. Attorney's Office for the Southern District of New York announced the indictment (full text) of seven individuals on wire fraud and conspiracy to commit wire fraud charges growing out of federal payments intended to fund computer equipment for Orthodox Jewish yeshivas. The indictment charges that for many years, defendants billed the federal E-Rate program for millions of dollars in equipment that was not furnished, or was furnished at inflated prices and often was not needed.  The federal program is intended to provide schools and libraries serving economically disadvantaged children with internet access. According to a Forward report on the indictment: "Some of the internet services paid for by E-Rate had been requested by schools that ban internet use for religious reasons."

Fraudulent Concealment Claim Against LDS Church Can Proceed

In Denson v. Corporation of the President of the Church of Jesus Christ of Latter-Day Saints, (D UT, Aug. 13, 2018), a Utah federal district court permitted a sexual assault victim to move ahead with her suit against the LDS Church for fraudulent concealment of its knowledge that the president of the Mission Training Center was a sexual predator. A number of other claims were dismissed, including those against the sexual predator that were dismissed on statute of limitations grounds.  Fox 13 News reports on the decision.

Gym's Failure To Disclose Transgender Policy Violates Michigan Consumer Protection Law

In Cormier v. PF Fitness-Midland, LLC, (MI App., July 26, 2018), a Michigan appellate court in a case on remand from the Michigan Supreme Court held that the gym Planet Fitness violated provisions of the Michigan Consumer Protection Act when it failed to inform plaintiff that it had a policy of allowing members to use whichever locker room and rest room corresponds to the gender with which that person self-identifies. The court concluded that Planet Fitness violated MCL 445.903(1)(s), (bb), and (cc) which prohibit:

(s) Failing to reveal a material fact, the omission of which tends to mislead or deceive the consumer, and which fact could not reasonably be known by the consumer.

(bb) Making a representation of fact or statement of fact material to the transaction such that a person reasonably believes the represented or suggested state of affairs to be other than it actually is.

(cc) Failing to reveal facts that are material to the transaction in light of representations of fact made in a positive manner.

In concluding that the failure to inform plaintiff of the policy was material, the court said:

After joining the gym, plaintiff saw an assigned male individual in the women’s locker room and then complained to an employee at the front desk and to defendants’ corporate office. Upon being informed of defendants’ unwritten policy on the matter, plaintiff verbally warned other women at the gym about it. Plaintiff’s actions indicate that she strongly preferred a locker room and a restroom in which individuals who are assigned biologically male are not present, and it is thus reasonable to infer that defendants’ failure to inform plaintiff of the unwritten policy affected her decision to join the gym.

A person who successfully sues under Michigan's Consumer Protection Act may recover actual damages or $250, whichever is greater, plus attorneys' fees. Liberty Counsel issued a press release announcing the decision.

Trump Commutes Sentence of Sholom Rubashkin

The White House announced yesterday that President Trump has commuted the prison sentence of Sholom Rubashkin, saying that it was "an action encouraged by bipartisan leaders from across the political spectrum, from Nancy Pelosi to Orrin Hatch." According to the White House's announcement:

Mr. Rubashkin is a 57-year-old father of 10 children.  He previously ran the Iowa headquarters of a family business that was the country’s largest kosher meat-processing company.  In 2009, he was convicted of bank fraud and sentenced thereafter to 27 years in prison. Mr. Rubashkin has now served more than 8 years of that sentence, which many have called excessive in light of its disparity with sentences imposed for similar crimes.

This action is not a Presidential pardon.  It does not vacate Mr. Rubashkin’s conviction, and it leaves in place a term of supervised release and a substantial restitution obligation, which were also part of Mr. Rubashkin’s sentence.

In 2011, the 8th Circuit upheld Rubaskin's conviction and sentence. (See prior posting.) After his bank fraud conviction, charges against Rubashkin of hiring of illegal aliens in his meat packing plant were dropped.  Des Moines Register reports on developments, along with further background.

FLDS Leader Sentenced To 57 Months In Prison

As reported by News4Utah and Fox13News, yesterday a Utah federal district judge sentenced FLDS Church leader Lyle Jeffs to 45 months in prison for food stamp fraud and an additional 12 months for fleeing while on bond awaiting trial. He must also serve 3 years probation and pay restitution of $1 million to the Department of Agriculture.  In September, Jeffs plead guilty to the offenses. (See prior related posting.)

Claim of Fraudulent Luring Into Conversion To Christianity Dismissed on Ecclesiastical Abstention Grounds

In Rymer v. Lemaster, (MD TN, Oct. 4, 2017), a Tennessee federal district court adopted a federal magistrate's recommendation of Aug. 30, 2017 (full text) and dismissed on ecclesiastical abstention grounds a suit by a college student against a Baptist minister. Student Lincoln Rymer claimed that Roger Oldham who was acting as his spiritual adviser wrongfully obtained student information about him, and used that information and an attractive female student to lure him into converting to Christianity.  Plaintiff claimed over $15.7 million in damages flowing from the conversion.

Court Interprets Scope of Food Stamp Fraud For Upcoming FLDS Leader's Trial

As previously reported, last year eleven leaders and members of the polygamous FLDS Church were indicted on charges of conspiracy to commit food stamp fraud.  The indictments claim that FLDS leaders required food stamp recipients to donate their benefits to a central clearing house which then redistributed food and household items to all in the community, whether or not they were food-stamp eligible. All defendants except Lyle Jeffs have either reached plea bargains or had charges against them dismissed.  In anticipation of this remaining defendant's trial, the government has filed a motion regarding jury instructions that will be given. In United States v. Jeffs, (D UT, Aug. 23, 2017), the court ruled that it will not instruct the jury that donating food items acquired through SNAP benefits is illegal, saying in part:

donation of SNAP benefits (i.e., the funds provided to a household on an EBT card) without the exchange of food products is prohibited.... SNAP benefits may only be used by the household to purchase eligible food for the household. Thus, the funds placed on the EBT card must be used to purchase eligible food for the household and any other use of those funds, including donation, is prohibited. However, there is no statute or regulation that would prohibit the donation of food items obtained through the use of SNAP benefits.

The court said that otherwise a SNAP recipient could be prosecuted "if they donated cookies to a school bake sale that were made from food obtained through the use of SNAP benefits." Fox13 News reports on details.

In Zimbabwe, Businessman Sues Church Leader For False Prophecies of A Debt Cancellation Miracle

In Zimbabwe, a suit was filed last week against United Family International Church leader Prophet Emmanuel Makandiwa and his wife Ruth.  According to Bulawayo24 News, former members of the church-- a businessman and his wife from the country's capital of Harare-- are seeking damages of $6.5 million (US), claiming that the Church leader through false prophecies and fraud convinced them to donate over $1.1 million (US) over a 5-year period by telling them that this would lead to a debt cancellation miracle. Plaintiffs also seek damages for various related conduct, including the Church leader's convincing them to hire a disbarred lawyer to try to recover $1.7 million from a lender.

7th Circuit Upholds Enhanced Sentence For Hajj Fraud Defendant

In United States v. Minhas, (7th Cir., March 10, 2017), the U.S. 7th Circuit Court of Appeals upheld the 114 month prison sentence imposed on a travel agent convicted in two separate cases of wire and mail fraud. One of the cases involved selling 54 customers purported Hajj travel packages when defendant was unable to provide the necessary visas for travel to Saudi Arabia.  The district court imposed sentence enhancement under the Sentencing Guidelines because the offense resulted in substantial financial hardship to the victims.  The appeals court upheld the district court's consideration of victims as a group rather than individually in making this determination.  The court added:

It is also worth noting that the district court understood that, at least in the Lightstar Hajj case, the harm was not just the loss of money, but was also a spiritual injury inflicted when it became impossible for the victim to make the hajj.... While being deprived of this opportunity (for a year at the very least) may not constitute a financial loss in the traditional sense of losing dollars from a bank account, it is a significant alteration in life circumstances, as are many of the factors pertinent to interpreting “substantial financial hardship”....

Pakistan Supreme Court Takes Action Against Fraudulent Hajj Tour Operators

In Hussain v. State, (Pakistan Sup. Ct., Feb. 27, 2017), the Supreme Court of Pakistan denied bail to defendants charged with defrauding a large number of Muslims seeking to perform Hajj by creating a fake travel agency that absconded with their travel funds. The Court explained:

This nature of frauds have become so common that, every year, before the Hajj Season commences, innocent and rustic peoples are looted by various so called agencies including the unauthorized tour operators, of which judicial notice is required to be taken to curb the increasing menace of frauds practiced in religious and pious matters, therefore, Courts are required to treat these cases differently and such frauds must be brought to halt.

The Court strongly criticized government agencies for failing to enforce the law and "allow[ing] the fraudsters to commit such crimes with impunity." In an attempt to prevent such frauds in the future, the Court ordered the Ministry of Religious Affairs

to update its website in English, Urdu and all local languages, conveniently readable and understandable by the illiterate poor people, showing all the details about the duly approved Hajj & Umrah Tour Operators, warning the public at large that except those mentioned on the website, no other agency or Tour & Hajj Operator is authorized to make booking or collect money for sending people to perform Hajj or Umrah. At the same time, the said Ministry shall give wide publicity to such lists through electronic and print media and also through handbills/notifications in different languages....

The Court also ordered further disclosures to travelers and indemnity bonds by authorized Hajj tour operators.  Today's Express Tribune reports on the decision.

Suit By FLDS Members Against Warren Jeffs' Former Lawyers Is Dismissed

In Bistline v. Jeffs, (D UT, Jan. 11, 2017), a Utah federal district court dismissed a suit that had been brought by former members of the FLDS Church against the law firm of  Snow Christensen & Martineau and one of its attorneys.  The suit claimed that the attorneys through amending and reinstating the United Effort Plan Trust gave Warren Jeffs the ability to impose his control over assets and property and oppress FLDS members.   The court dismissed malpractice, breach of fiduciary duty, fraud, negligent misrepresentation, civil conspiracy and civil RICO claims on statute of limitations grounds, except as to one plaintiff whose claims were dismissed as inadequately pleaded. Finally the court dismissed claims under the Trafficking Victims Protection Reauthorization Act, holding in part:

Plaintiffs suggest that Defendants are nonetheless liable because Defendants drafted the Trust documents that made Jeffs’ revelations guiding tenets in how the Trust was managed. Plaintiffs’ theory would make attorneys vicariously liable for the acts of a client in the mismanagement of a trust simply because the attorneys prepared documents giving the client discretion in how the trust was managed. This theory is not sufficient to state a claim under 18 U.S.C. § 1589(a)....

Plaintiffs theorize that because one of the reinstated Trust’s purposes was to further FLDS doctrines, and because some FLDS doctrines are illegal, the drafters of the Trust furthered illegal acts. This theory is not sufficient to support Plaintiffs’ claim that Defendants abused a legal process under 18 U.S.C. §1589(a)(3). The Trust’s provisions and the authority it gives are centered on the distribution of property in a way that would meet the just wants and needs of the FLDS community. Plaintiffs cite no authority for the proposition that allowing a client to distribute trust property on the basis of religious principles is an abuse of a legal process.

KETV News reports on the decision.

Claim For Interference With Inheritance Lies Against Legion of Christ

In Americans United For Life v. Legion of Christ of North America, Inc., (RI Super., Jan. 4, 2017), a Rhode Island trial court held that a claim of tortious interference with expectation of inheritance is cognizable under Rhode Island law.  At issue is a claim by an anti-abortion organization that Legion of Christ through fraud and undue influence induced Gabrielle Mee, a devout Catholic, to change her will to divert to Legion of Christ the 10% of her estate (equaling as much as $6 million) originally left to the pro-life group.  Her will already left 90% to Legion of Christ, and plaintiffs claim that had Ms. Mee learned of the charges of sexual abuse that surfaced as to Father Marcial Maciel Delgollado, the founder and former leader of Legion of Christ, she might well have completely cut them out of her will.  While allowing the tortious interference claim to move ahead, the court dismissed separate claims based on fraud and undue influence. AP reports on the decision. (See prior related posting.)

Israeli Former Chief Rabbi Reaches Plea Deal In Bribery Case

Times of Israel reported last week that Israel's former Ashkenazi chief rabbi Yona Metzger has reached a plea deal with Israeli prosecutors.  He will plead guilty to fraud, theft, conspiracy, breach of trust, money laundering, tax offenses and accepting bribes, in exchange for a reduced jail sentence.  Metzger was charged with receiving NIS 10 million ($2.6M (US) at current exchange rates) in bribes, and keeping NIS 7 million for himself. As previously reported, the bribes came, among others, from wealthy businessmen seeking to convert to Judaism, and for other services he performed in his role as Chief Rabbi. Many of the bribes came in the form of donations to non-profit organizations tied to Metzger.

Plea Agreement Reached In FLDS Food Stamp Fraud Prosecution

AP reports that Seth Jeffs, a high-ranking member of the polygamous FLDS Church, has accepted a plea deal in his prosecution for food stamp fraud. Under FLDS doctrine known as the Law of Consecration, faithful members who were food stamp recipients were required to donate their benefits to the FLDS church through a clearinghouse known as the Bishop’s Storehouse. Food and household items were then redistributed to all in the community, whether or not they were food-stamp eligible. (See prior posting.) Last month Jeffs lost in his attempt to have his indictment dismissed on religious free exercise grounds. In the plea agreement, Jeffs pleaded guilty to felony fraud and prosecutors accepted the 6 months he has already served in jail as his punishment. Conspiracy and money laundering charges were dropped, and Jeffs was released from jail yesterday.  Jeffs could have faced 20 years in prison. Jeffs is the second of 11 defendants to reach a plea agreement with prosecutors, and plea deals with other defendants are possible.

UPDATE: Fox News (Jan. 4) reports that 6 other defendants pleaded guilty in plea deals that merely require them to take a class on the proper use of SNAP (food stamp) benefits.

RFRA Does Not Protect FLDS Members' Food Stamp Fraud

As previously reported, in February the U.S. Attorney's Office for the District of Utah announced indictments against eleven leaders and members of the polygamous FLDS Church charging them with conspiracy to commit food stamp fraud and conspiracy to commit money laundering.  Under FLDS doctrine known as the Law of Consecration, faithful members who were food stamp recipients were required to donate their benefits to the FLDS church through a clearinghouse known as the Bishop’s Storehouse. Food and household items were then redistributed to all in the community, whether or not they were food-stamp eligible. Now, in United States v. Jeffs, (D UT, Nov. 15, 2016), a Utah federal district court rejected the argument that this practice is protected by RFRA and the 1st Amendment.

The court held that one of the defendants, FLDS leader Lyle Jeffs, did not have a sincerely held belief in the Law of Consecration; however other defendants did. Only one of those defendants-- the one who was actually eligible to receive SNAP (food stamp) benefits-- though showed a "substantial burden" on his religious beliefs. The court went on, however, to find that the government has shown a compelling interest in limiting SNAP benefits to the purchase of food to be used by the eligible recipient's household, and that the SNAP statutes and regulations are the least restrictive means of furthering that interest.  The court also rejected defendants' 1st Amendment claims. Fox 13 reports on the decision.