Ind. Judge Okays Settlement to Church Group, Insurer

A group helping rebuild the Church of God’s financial arm is to pay at least $4 million to investors who lost many millions more when their money was put in risky real estate deals rather than toward building churches.

The settlement approved by a federal judge follows four years during which the Anderson-based Board of Church Extension was under court supervision. The agreement calls for the investors to receive $1.1 million from the board’s insurance carrier and $4 million from Integrity Advisors Group Inc., which has been advising the board and backing it financially.

A federal jury in 2004 found that two top officials at the Board of Church Extension defrauded investors of $85 million. They were both ordered to pay fines.

Figures released by Integrity Advisors Group indicate that $31 million has been repaid to investors and that the settlement approved Friday by Judge David Hamilton should result in the distribution of at least an additional $8 million.

IAG secretary Jim Williams said that investors whom a review board deemed most in need of reimbursement would receive priority for payments.

“A few noteholders were hit really hard by this,” Williams said. “These were just average people with little money who had entrusted their money to the church.”

The group of volunteers and businessmen who created IAG and funded the settlement for the Board of Church Extension said they wanted to be accountable to church members.

“We care about the family,” said Charles Shumate, who was involved in creating the IAG. “We want to do what’s right for the family.”

The two top officials found at fault for the investment fraud, James Perry Grubbs and Shearon Louis Jackson, both said that they never intended to deceive anyone. A judge fined Grubbs about $165,000 and Jackson about $130,000.