Nova Scotia

Nova Scotia class action against charity Gospel for Asia alleges $100M fraud

A class-action lawsuit filed in Halifax on Tuesday alleges the Christian charity Gospel for Asia misused donor funds in excess of $100 million. Similar claims were made in a U.S. class-action lawsuit that settled last year for $37 million.

Donors claim Christian organization 'conspired to misrepresent the nature of the donations collected'

People who attend Christian Fellowship Church in New Glasgow, N.S., donated $150,000 to Gospel for Asia over a 20-year period. The congregation stopped supporting the charity after Pastor Bruce Morrison discovered financial discrepancies in 2015. (Angela MacIvor/CBC)

After a three-year legal battle south of the border that ignited a major controversy in evangelical circles, the charity Gospel for Asia has now become the focus of a class-action lawsuit filed in Canada.

Plaintiff Greg Zentner of Woodburn, N.S., alleges the charity "defrauded or made negligent misstatements" to him and other donors. The statement of claim also said the "defendants civilly conspired to misrepresent the nature of donations collected."

In other words, Zentner alleges the money raised didn't go where it was supposed to. He is seeking damages for the "misuse of donor funds in excess of $100 million."

The statement of claim was filed in Nova Scotia Supreme Court on Tuesday. Gospel for Asia (GFA) settled a class-action lawsuit in the U.S. with similar allegations last year for $37 million.

Gospel for Asia's Canadian office is based in Stoney Creek, Ont. It brings in about $9 million each year from donations intended for the poor overseas. (CBC)

GFA has been operating in Canada since 1980. It continues to have strong support and raises about $9 million through donations each year — on average, $25,000 a day. The proceeds are intended to go to the poor in India and surrounding countries. 

Some of the most popular gift items include farm animals, bicycles, blankets and drinking wells. Donors also give monthly to support child and missionary sponsorships. 

Zentner and his wife donated thousands to GFA between 2006 and 2014. He learned about alleged financial discrepancies through his pastor, Bruce Morrison, who meticulously researched GFA's money trail after hearing from former GFA staff members in the U.S.

As part of a recent CBC News investigation, Morrison and 28 former staff and board members disclosed concerns of how they believe donations have been misused over the years.

Some ex-staff, along with Morrison, uncovered that tens of millions were allegedly sitting in foreign bank accounts and millions more were being held in reserve funds.

Bruce Morrison, a pastor in New Glasgow, N.S., says he first became aware of financial concerns at Gospel for Asia in 2015. A member of his congregation is the plaintiff in a class-action lawsuit filed against the charity in Nova Scotia Supreme Court on Tuesday. (Angela MacIvor/CBC)

Morrison also found that between 2007 and 2014, Gospel for Asia reported to the Canada Revenue Agency (CRA) that it had sent nearly $94 million to India. Meanwhile, financial records submitted to the Indian government showed the charity received no funds from Canada during that time period.

"I suppose the greatest impact I've had, or the greatest thing that has impacted me, is the denial that comes from Gospel for Asia that 'we've done nothing wrong,' when there is so much evidence to the contrary," said Morrison.

Charity disputes allegations

GFA litigation spokesperson Johnnie Moore told CBC in a recent interview the charity is "misunderstood."

"Not only [was GFA] not required to make an admission of guilt when they settled the [U.S.] lawsuit, but had the lawsuit actually continued in the court, they either would have won in court or certainly won on the appeal," Moore said in a recent interview with CBC.

Johnnie Moore, a spokesman for Gospel for Asia, stands outside the group's headquarters in Wills Point, Tex. (Angela MacIvor/CBC)

Moore said the allegations made in the U.S. lawsuit were "absolutely false" and the legal settlement proves it. 

"It explicitly states that all the funds that … were designated to go to the field went to the field," said Moore. 

GFA has not yet responded to the Canadian lawsuit filed on Tuesday.

$20M 'anonymous' donation

Morrison said the U.S. lawsuit provided him with new information about how Canadian money was being spent. In court, lawyers representing Gospel for Asia confirmed that $20 million was taken from Canadian donations to help pay for construction of the charity's $45-million headquarters in Wills Point, Tex.

"They said in the financial statements that were issued in the U.S. [that] … the money had come from an anonymous donor," said Morrison. "And then we find out through court hearings in the United States that this money was Canadian money and donors here had no idea that had happened."

Gospel for Asia confirmed to CBC the money did come from Canadian donations, but said it was later paid back.

Lawyers representing Gospel for Asia in a U.S. class-action lawsuit confirmed that $20 million was taken from Canadian donations to help pay for construction of the charity's $45-million headquarters in Wills Point, Texas. GFA says the money was later paid back. (Angela MacIvor/CBC)

In the Canadian court filing, Zentner is seeking the "return of $20 million in funds misdirected to GFA USA."

"The plaintiff states that the transfers were made in order to hide the actual source of the funds and to mislead class members and the Canadian and Indian tax authorities," the document said.

Marc Stanley, the lawyer who represented the plaintiff in the U.S. class-action lawsuit, is named as legal counsel on the statement of claim along with Halifax lawyer John McKiggan.

 

About the Author

Angela MacIvor is CBC Nova Scotia's investigative reporter. She has been with CBC since 2006 as a reporter and producer in all three Maritime provinces. All news tips welcome. Send an email to cbcnsinvestigates@cbc.ca

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