A Friendly Letter, The Blog.

Part 1 — Concerning the impending change in popes:

The level and intricacy of maneuver, plots, schemes, connivings, chicanery and competing conspiracies within the upper circles of the RC church are beyond anything that Dan “Da Vinci Code” Brown or Marvel Comix could imagine. So us outside small fry can only speculate, and wait for the tell-all books to come out in a few years or decades; they should be seriously lurid.

But here’s my take, FWIW: there are two over-arching issues facing the Vatican (which for this kind of discussion is distinct from the RC Church as a whole, the way Washington DC is distinct from the US.)
One, damage control for the (very expensive) fallout from the ongoing exposure of the international pedophile protection racket they’ve been running for so long. Bennie has done his best to contain and suppress this fallout (including his own role in various related coverups, which I believe is extensive).

But along the way he’s become damaged goods himself.

So now it’s time for him to go, to be replaced by someone who can distract the world media (OMG! The first black pope!!!) while skillfully continuing the damage control/suppression mission behind the PR smoke and mirrors. For whoever takes Bennie’s place, that’s probably Job One.

Or maybe Job Two. Because the other big issue for the Vatican is that it has become a major international money-laundering and financial scam center for all sorts of real world-class lowlifes, individual and corporate. (Even including spooks and spies of various sorts.) This other bottomless well of sleaze (which probably contains the bones of any number of murder victims) is beginning to be exposed to wider scrutiny as well. In addition, the Great Crash of a few years ago has not been kind to the Vatican’s finances.

The overall fallout of this is as potentially damaging as the pedophile stuff. (What?? You thought that all the guys there cared about was boffing little boys and girls?? Oh, naive innocence! Money, Dudes. Capital. Land. Palaces & mansions. Jewelry. Art. Not to mention the high-priced lawyers, political protection and general clout all these can buy, and very much need to keep buying.

So the money scandals and screwups have to be managed also.

Added together, these two make for a very full gold-encrusted plate for the next pontiff to make the sign of the cross over. I have no idea who it might be, but unless he’s a saint and a half, my sense is that the Imperium Vaticanum will continue to decline under the next reign as it has under the last two.

To which I can only say, deo gratias.

Part 2

I have Irish ancestry, and visited Eire in late 2010. It still boggles my mind to consider how close to collapse the Irish Catholic church has come. Ireland no longer Catholic? It sounds like an oxymoron, an utter impossibility; but now it’s pretty much a fact.

Here’s a quote from an article in a UK Catholic paper on a church report detailing the extent of the Irish collapse. Mind-boggling is the word.

“Over the past two decades the abuse crisis went through the Irish Church like a wrecking ball. During this time, a great many Irish people turned away from the Church, and those who remain are demoralised and confused. As recently as 1984, 87 per cent of Irish Catholics attended Mass weekly. Now, only a minority do so. Archbishop Diarmuid Martin last year noted that on any given Sunday only about 18 per cent of the Catholic population of Dublin attends Mass – down to 2 per cent in some areas. He said: ‘The brink has already been reached. The Catholic Church in Ireland will inevitably become more a minority culture.’”

The article goes on to say that more than the pedophile scandals is involved. Read the rest to learn what. . . .

Philip Gourevitch is a writer for the New Yorker, and a student of foreign affairs, including wars. In the Oct.11 issue of the magazine, he published a stunning piece, “Alms Dealers,” which demands the attention of every one who ever wanted to give money or time to help someone in distress far away, or even nearby. It is especially salient and urgent for Quakers concerned with the transfer of cash from US Quaker groups to churches and projects in Kenya.

In the article, Gourevitch charts the rise of the “humanitarianism industry” from modest beginnings before the late 1960s, to its multi-billion multinational heyday, which happens to be right now. He does this by reviewing several books by international journalists which take a close and critical look at this industry.

There are many shocking stories in these accounts; the all-too common theft and embezzlement that so preoccupy queasy Friends like myself are the least of it. Much more sinister, even deadly, are the reports of many occasions when “refugee camps” run by NGOs or the UN near war zones have been infiltrated by warlords and turned into havens for militias planning more warfare and terror, and turning the “humanitarian” sponsors into captive cash cows, supporting the preparations for war under the guise of relieving its ravages. Furthermore, the books, and the review, both point out that this huge “industry” is entirely unregulated and unsupervised.

Such charges as these in the pages of as prestigious a journal as the New Yorker are bound to elicit responses, and on the magazine’s website, the feedback is fast and furious. Gourevitch has a major response, with links to some critical letters, here.

As Gourevitch notes,

. . . humanitarianism is an industry. So we should examine it and hold it to account as such. To treat humanitarian or human-rights organizations with automatic deference, as if they were disinterested higher authorities rather than activists and lobbyists with political and institutional interests and biases, and with uneven histories of reliability or success, is to do ourselves, and them, a disservice. That does not mean—as the many books I reviewed, and many more still, make clear—taking a hostile stance toward N.G.O.s. It simply means not accepting their hostility to critical scrutiny. It means not letting them claim to do our work for us. It means insisting on asking the questions for which they may have no good answers.

On our vastly smaller scale, Quakers can make no less searching demands of those who ask us to send our limited funds far away, in order to do good, and fulfill the claims of the gospel.

There’s this older gay man, I’ll call him Algernon. He’s not a Friend but has recently been attending Quaker meeting in an eastern state.

Early last year he and his longtime partner parted, and Algernon wanted to find some new companionship. So he went onto the net.

Soon he was in touch with a man we’ll call Moncrieff, who said he was a UN peacekeeper stationed near Baghdad. This appealed to Algernon. While he was once in the military, he’s since developed a strong concern for peace issues; I think that’s what helped draw him toward Friends.

The conversation burgeoned and soon became intimate. Algernon says that Moncrieff was very articulate, expressive, and appealing. Before long, Algernon was in love, and even asked Moncrieff to come to Buy cytoxan the US and live with him. Moncrieff answered yes, he was ready to leave the onerous work of Iraq peacekeeping, and said he would put Algernon in touch with his lawyer, to begin arrangements.

Shortly thereafter I saw Algernon, and with a broad grin, he told me he was “engaged,” and mentioned the basics of this story.

I admit: this suspicious old Quake’s antennae started vibrating as soon as I heard what was up. “This,” one thought, “is a case for a friendly but no-nonsense clearness committee, if there ever was one.” I wrestled with approaching him about the idea, hesitated, then thought: next time I see him, I’ll mention it.

When that time came, before I could speak, Algernon volunteered that his “engagement” had, in his words, “crashed and burned.”

Turned out that Moncrieff’s attorney wanted copies of Algernon’s birth certificate, passport and driver’s license. This made Algernon nervous (Let the church say, “Identity Theft!”) So he did some googling about the attorney, and discovered that his “office” in London was informally known as “Scam Central.” That and a few other clues made plain what road Algernon had (almost) been on.

Algernon was disappointed, but seemed less than devastated; his sense of personal loss was doubtless soothed considerably by awareness of the bigger bullets he had barely dodged.

Many folks know about the “Nigerian 419” family of scams, ( http://www.snopes.com/fraud/advancefee/nigeria.asp ) and routinely delete those endless emails purportedly from the widow of a west African potentate, or some such, who wants to send you millions, for a small handling fee. But such trolling goes on in many other variations and venues, such as “respectable” dating sites.

And according to an independent list of active UN peacekeeping missions, there isn’t one in Iraq.

Word to the wise. And the lonely.

A Friend wrote privately about the previous report about US & UK funding agencies withholding donations to schools in Kenya because of rampant corruption.

Kenyan Quakers operate many schools, and for the sake of clarity, the articles I quoted did not directly allege that Quaker schools had been stealing US and UK funds.

Rather, the unfortunate patterns of thievery involving some Kenyan Quakers (mainly older “leaders”) have been around since long before this current educational crisis, and some are, I fear, continuing. They involve other institutions, particularly the once-thriving Kaimosi Friends Hospital, which was plundered repeatedly by many who Buy grifulvin V held responsible positions.

Unfortunately, such corruption is a very widespread problem in Kenya. The international monitoring group “Transparency International” publishes an annual ranking of countries in terms of public corruption, and year after year, alas, Kenya ranks very near the bottom.

Also unfortunately, there have been many US-based Quaker officials, mainly associated with Friends United Meeting, involved in the missionary enterprise who played an enabling role in this corruption. They did not steal funds themselves, but turned a blind eye to it, and helped keep information about it from reaching the donors here.

Even now, while current FUM staff insist they are “working on” the problem, reporting on the efforts and the results is very sparse, which leaves some, like me, to suspect that there is less progress than there ought to be.

I hope I might be wrong about this; but extended silence about what may be underway does nothing to dispel my uneasiness. Indeed, it only feeds it.

In my yearly meeting, I have spoken of being unwilling to send our group’s funds to Kenyan Quaker projects without clear explanations of how the integrity of the funds delivery and use can be assured.

There are some theological issues between my yearly meeting and Friends United Meeting, but this concern does not involve them.

“Thou Shalt Not Steal” applies to all versions of Christianity I know anything about. It also applies as much to mission projects as to domestic ones.

And beyond theology, it does not serve justice, or economic “development,” to be silent about thievery, or to be less than thorough in rooting it out.

I urge other concerned Friends to raise their voices for more disclosure as well.

Seems to me it’s time for an open update for American and other Friends on the struggle against theft and corruption in Quaker institutions and programs in Kenya.

This question has been growing on me in recent months, but I figured maybe there had been one and I missed it.

But it was brought back to mind by some recent news reports.

Did anybody else see these BBC stories?

UK freezes Kenya school funding amid fraud allegations
13 December 2009

The UK government has frozen funding for free primary education in Kenya until an investigation into fraud allegations has been carried out.
The Department for International Development said no more money would be released until $1m (£615,000) thought to be missing had been accounted for.
Kenyan media suggest the total of the alleged missing funds may be larger.
The money was supposed to go towards building new classrooms and buying text books in impoverished parts of Kenya.
The funds are said to have disappeared earlier this year.

This story was soon followed by . . .

US suspends Kenya school funding

26 January 2010
The US has suspended $7m of funding for free primary schools in Kenya until fraud allegations are investigated, the US ambassador in Nairobi has said.
Michael Ranneberger says “credible action” must be taken on claims that 110m shillings (£900,000; $1.4m) were siphoned off a free-education fund.
The US move comes a month after the UK government pulled out of the project.
Kenya is ranked as East Africa’s most corrupt country by campaign group Transparency International.
The US has been pushing for reform in Kenya since deadly violence swept the country after an election in 2007.
Although the violence was primarily political and ethnic, US officials have highlighted underlying causes such as corruption and weak institutions.
Future ‘in the balance’
Mr Ranneberger demanded an independent audit of the free-schools programme.
“Those culpable for the fraud should not only be sacked - they need to be prosecuted and put behind bars,” he said.

And this story was soon followed by this one:

Kenya faces political ‘meltdown’
By Will Ross
BBC News, Nairobi

16 February 2010
Ongoing political wrangling in Kenya’s coalition government is having a major detrimental effect on its fight against corruption, a lobbying group warns.
Transparency International warned Kenya risked turning into a failed state.
A rift in the fragile power-sharing government developed after PM Raila Odinga announced the suspension of two ministers after corruption scandals.
President Mwai Kibaki annulled the suspensions, saying the Mr Odinga did not have the power to take the action.
The head of Transparency International in Kenya, Job Ogonda, said the political dispute in Kenya’s coalition government was sending out a very dangerous message.
It was showing that the struggle for power was more important than the fight against corruption and this, he said, would have dire consequences come the next election.
“In 2012 it’s very likely we’re going to have a meltdown,” said Mr Ogonda.
“We have the significant risk that Kenya will be generating to a failed state.
“This is how[civil wars] in Sierra Leone and indeed Liberia were fomented: the executive being eliminated and oblivious for the failed state risks that corruption causes especially where the population is young, educated and unemployed”.

Plagued by scandal

Fighting corruption in Kenya is a difficult - some would say impossible - task.
Mr Ogonda said his staff had been threatened on several occasions.
While he said some Kenyan politicians had built a reputation through professionalism and accountability, he was on the whole scathing of the political elite.
“Within parliament you find a new breed of leaders who are committed to the good governance of this country, but the vast majority of the people who wield immense power are definitely fraudsters,” he said.
Kenya has in the past been plagued by huge corruption scandals, but punishing the perpetrators is very rare.
Whilst the political dispute in Kenya has halted the suspension of two ministers, Job Ogonda said if they were to be suspended it would send out a positive message and would help end a deeply entrenched culture of impunity.

Now, these reports don’t mention Quakers. However, they echo many Friends concerns about fraud and theft of Quaker funds there, especially donations from the US and UK.

Every time I have spoken or written about this matter in a public forum (and the speaking goes back a couple decades), I am given assurances that “something is being done,” and urged, overtly or covertly, to shush and go along.

(A major piece on this was called, “Wrestling With a Roomful of Elephants,” posted on an earlier version of this blog — good grief — more than three years ago.)

And while I ‘m sure some good folks are working on it, I wasn’t able to locate any reports about that online that were less than about four years old.
Friends United Meeting is the largest such donor from the US, and the chronic problems have centered there. Its website has an unusually candid report on the history of the Friends Hospital at Kaimosi, once the pride of the Quaker missionary labor there, which was run into the ground by fraud and theft, not just once but again and again, til it had to be shut down. FUM reports that it is committed to resurrecting the hospital, as an enterprise marked not only by US-Kenyan cooperation, but also “partnership, mutual accountability, transparency, capacity building, and local ownership”.

All very well. But the report’s information does not appear to include anything after January 2006, four years ago. How’s it going, eh?

And how’s the overall effort to root out corruption in Kenyan Quaker projects? The other reports on the FUM website do not mention the topic, at least not that I could see. So answers to questions about updates don’t seem to be very plentiful.

Another source, Dave Zarembka, has also been more than typically candid when the subject was surfaced. And he has written many reports from Kenya, related to his work with the African great Lakes Initiative.

However, the most recent report on that site is from October of 2009, and does not address these concerns.

Too bad, as the recent news from the larger Kenyan scene is worrisome indeed.

So who will fill us in?

On September 3, Terrill D. “Terry” Beebe, signed a plea agreement in a Seattle Federal Court, admitting to “Conspiracy to Commit Mail Fraud, Wire Fraud and Embezzlement from a Health Care Benefit Program, in violation of Title 18, U Code, Section 371,” according to the prosecutor’s information filed with the case. The charges were part of the ongoing investigation of the Philip Harmon-National Friends Insurance Trust Case, code-named “Operation Island Scam.”

By Chuck Fager

Wichita, KS — Although Priscilla Deters insisted that, “I consider myself innocent of these charges,” adding that “I have a heart of grief, because I have been a victim too,” federal judge Monti Belot insisted on Friday, May 22 that she start serving her eleven-plus year sentence for wire and mail fraud immediately.

Deters was convicted on March 6 in connection with the “Productions Plus” church fraud scheme that took in over six million dollars from victims, principally members of evangelical Quaker and Nazarene churches, in 21 states. She had been free on $200,000 bail since then. NOTE: An extensive report on the fraud, entitled “Fleecing the Faithful”, has been published by A Friendly Letter. It can be sampled, along with photographs, at: http://www.afriendlyletter.com

Besides the jail term, Deters was fined $150,000, ordered to pay almost $132,000 in restitution to churches in Kansas, and to reimburse the federal government $22,000 per year to defray the cost of her incarceration.

Judge Belot imposed the maximum sentence allowable under federal guidelines, and said he wished the law permitted a longer sentence. “I’m not a religious person,” he told Deters. “But there’s nothing lower in my opinion than people who use religion to cheat other people.”

Furthermore, in determining the sentence, Belot ruled that Deters was the leader of a group involving at least five others in her criminal activities. Among those identified by the prosecution as Deters’ co-conspirators were a Quaker pastor in Colorado, Randy Littlefield.

Littlefield has not been charged with a crime. However, judge Belot spoke scathingly about him. Littlefield was pastor of the Cherokee Friends Church in Cherokee, Oklahoma when members and others were persuaded to invest - and lose - over $450,000 in the Productions Plus scam.

One of the Cherokee victims, Mary Washburn, took the stand at the hearing. She said she took the $68,000 in insurance money left by her late husband out of treasury bills and put it into Productions Plus because she thought it would helop rebuild her local community. But the money is gone, and she said she was left unable even to place a marker over her husband’s grave.

Besides promoting Deters’ Production Plus in Cherokee, and two other Friends churches in Texas which also lost their money, Belot said that Randy Littlefield swayed his mother to invest heavily in the program, and then persuaded her to refuse cooperation with investigators.

“If you tell someone, as Randy Littlefield told his mother, not to cooperate with Kansas investigators, that’s evidence of criminal intent,” Belot insisted. “[Littlefield] got his mother into it because she was elderly and he hoped to be the beneficiary of her gain. Randy Littlefield,” the judge said, “is a reprehensible lowlife, a scumbag.”

Testimony at the hearing also connected Littlefield with another incident, in July, 1996 in California, that the judge ruled was part of a campaign led by Deters to intimidate investors and obstruct justice.

Doug Kunsman, former business manager at Barclay College, an evangelical Quaker school in Haviland, Kansas, testified that at this meeting Littlefield pressured and badgered him for several hours, attempting to persuade him and the college to stop their cooperation with the Kansas investigation into Deters’ activities. Kunsman said he felt very intimidated by this onslaught. However, the college continued its cooperation with the probe.

These charges had also been made at the trial. But the hearing produced a surprising new twist as well: Judge Belot announced that earlier that same day, May 22, he had received a FAX from Indiana Wesleyan University, an evangelical college in Marion, Indiana. The school was Deters’ alma mater; she graduated there with a degree in music in 1957.

The FAX informed the judge that after the trial, Deters’ twin sister, Phyllis Beaver–also a graduate of the school–had attempted to get the college to release $50,000 of its investment for use in posting Deters’ $200,000 bail.

This revelation incensed judge Belot, who had ordered after the trial that no victims’ money involved in the fraud was to be used in seeking to post Deters’ bail. After having the court reporter read back that section of the trial transcript, Belot commented, “I’m not claiming prescience, but what I figured could happen, did.”

He concluded that, “We’re looking at a woman who, through her sister in this instance, is determined to continue with this fraud scheme.” He ordered that Deters’ $200,000 bail money be frozen until the federal government could determine whether any of it was taken from the proceeds of the fraud.

Belot added that he considered Deters a continuing hazard to the public, and denied a defense request to release her on bond pending appeal. “The best lawyer in the United States won’t get you a reversal, a new trial, or a reduction,” he scoffed, ordering Deters to begin her sentence immediately.

Update by Chuck Fager

Wichita, Kansas – Maurice Roberts, the former Superintendent of Mid-America Yearly Meeting, testified for several hours Thursday as a key witness in a major church fraud trial here.

Priscilla Deters, 63, of Walnut, California is being tried on 13 charges of wire and mail fraud in U.S. District Court. The charges are in connection with a “Ponzi” scheme which prosecutors say collected over $6 million from churches and church members in twenty-one states.

Among the victims of the fraud were Quaker churches in Kansas, Oklahoma and Texas. Roberts, now a resident of Camano Island, Washington, was General Superintendent of these churches, through their Mid-America Yearly Meeting. Mid-America Yearly Meeting is an association of evangelical Quaker (or Friends) churches headquartered in Wichita. He served in that position from 1982 to 1994, when he was forced to resign after the frauds became known.

After leaving Mid-America, Roberts said he was hired by Phil Harmon, a prominent Buy neoral Quaker in Northwest yearly Meeting circles, in May of 1995. Harmon has had his own legal troubles.

Prosecutors assert that in the fraud scheme, Deters promised churches she would double their investment in a year, while keeping their funds safe in certificates of deposit. Deters told the groups that the money for these “matching gifts” came from a fund containing several million dollars. She also claimed to be providing such gifts from the profits of several highly lucrative businesses.

However, prosecutors contend there never was any such multi-million dollar fund, and no business profits.

Instead, according to bank records introduced as evidence, Deters spent investors’ money freely on personal expenses and gifts to her several children. Deters also, prosecutors contend, paid off early investors with money from later investors, in what is known as a “Ponzi” scheme.

Deters’ defense attorney, Federal Defender Steve Gradert, argued that Deters did not guarantee to double her investors’ money, and that she never intended to defraud anyone.

Instead, Gradert has suggested that Deters is the victim of a conspiracy involving Roberts and other as yet unnamed persons, to shift blame from their own misdeeds to her. Gradert also sought to tie the Deters scheme to the frauds associated with Phil Harmon, through Roberts’ connection with both.

Roberts testified that he first learned of Deters and her program in 1988, in connection with a Quaker ministers’ conference. The conference planners invested $7500 with her, Roberts said, and received back $50,000 a year later.

This experience, Roberts acknowledged, made him very enthusiastic about Deters.

Thereafter, between 1989 and 1993, according to church records introduced in evidence, Roberts persuaded his association of Friends churches to invest a total of $439,000 in church money with Deters, hoping to gain at least $878,000 in returns. Instead, the group received back only $354,000, $85,000 less than they put in, and $524,000 less than they were expecting.

Deters stopped making payments to Roberts’ group in late 1993.

Prosecutor Allen Metzger showed Roberts a sheaf of faxes Roberts had sent to Deters thereafter. The faxes pleaded for funds to be sent from the various deposits that were supposed to be in his group’s accounts, and explained the financial hardship the shortfall was creating for the group. Roberts testified that the only responses he got to these appeals were excuses and promises.

Metzger then brought forward a sheaf of Deters’ bank records. Speaking dramatically, he declared that at the same time Deters was failing to send funds to Roberts’ group, she was using money from the same bank accounts to close on a $775,000 house for her son, buy several vehicles, and pay her own mortgage.

“If you had known this,” Metzger asked after each set of bank records was shown, “would you have kept believing in her?”

“No,” was Roberts’ repeated reply.

In 1994, the Kansas Securities Commission investigated Deters, and interviewed Roberts. Roberts was later granted immunity from state prosecution in return for cooperation with the probe.

Defender Gradert pointed out that this immunity was contingent on the belief that Roberts had not profited personally from the fraud. He also asked Roberts if he had kept any of the funds from Deters’ payments. Roberts denied doing so, and stated that the books of Mid-America Yearly Meeting were audited regularly.

Gradert also questioned Roberts about his relation to Phil Harmon. Roberts had known Harmon for years through the National Friends Insurance Trust, which insured pastors in Mid-America Yerarly Meeting. Roberts and Harmon were also on the boards of two small Quaker schools in Kansas and Oklahoma.

Harmon hired Roberts in 1995 to be head of Skagit Valley Associates, which he said was the paymster and office management support arm for all of Harmon’s companies. His office was next door to Harmon’s, Roberts affirmed, but he insisted he had no role in promoting or marketing any of the failed company’s services or investment products.

In 1996-97, Harmon’s business empire collapsed amid charges of fraud. About 230 investors lost an estimated $14 million, with at least as much more being stolen from a health insurance plan Harmon operated for several hundred Quaker pastors and staff workers. Harmon pleaded guilty in October, 1997 to federal charges of tax fraud and conspiracy. He is expected to serve eight years, and he will be formally sentenced in May.

Harmon also described Roberts as as his “extremely close personal friend” and a member of his personal “support group,” in a Seattle federal petition in May of 1997, in which Harmon requested permission to meet with Roberts. The court denied this request.

Seattle prosecutors have stated to this reporter that they expect to indict several more persons in conncection with the Harmon case, including Phil Harmon’s son P. Steven “Steve” Harmon. Asked if he had any fear of being indicted in the wake of Harmon’s frauds, Roberts replied firmly, “No, sir.”

He added that he had not been given any offer of immunity in the Seattle case, but that he had worked for federal authorities for six months, organizing and preparing Harmon’s business records and assets for federal supervision.

Defender Gradert also sought to shore up the Harmon connection by disclosing that another early advocate of Kansas Quakers’ investment in Deters’ programs was one Steve Harmon.

However, Roberts replied that this Harmon was a Quaker pastor in Oklahoma, and no relation to P. Stephen “Steve” Harmon, son of Phil Harmon.

Update by Chuck FagerWichita, Kansas — Part of the more than $400,000 collected by the Cherokee Friends Church, intended for investment in a profitable business, was instead used to pay back a Quaker College in Kansas as part of a “Ponzi” fraud scheme, a Kansas jury was told today.

In the second day of the Priscilla Deters Productions Plus trial, a Kansas Securities Commission investigator described in detail the paper trail of numerous church investments in the scheme. The testimony, by Investigator Gary Fulton of Wichita, is a key element in the federal case against the owner of Productions Plus, Priscilla Deters.

Deters is being tried on thirteen counts of wire and mail fraud. Fulton and six other investigators seized six boxes of business and financial records during a search of Deters’ home in December, 1994. The boxes were piled three-high in the courtroom, and stacks of folders containing original checks were piled high on the prosecution’s table.

Fulton testified that he sought the search warrant in December of 1994, after waiting nine months for Deters to voluntarily submit her business records for examination.

Fulton told of finding the documents in a bedroom of Deters’ home, in “total disarray.” They were “in sacks, stuck into drawers, in piles, and stuffed in boxes. “It took six people seven hours” to finish the search of this one room, Fulton said.

Fulton later sorted all the documents, and subpoenaed Deters’ other bank records. Using the records and the checks, he developed elaborate spreadsheets, on which he traced where money came from in the business and where it went.

Prosecutors cited numerous documents in which they say Deters assured investors their deposits would be kept safe and secure in separate certificates of deposit (CDs). They also asserted that Deters told her investors that their investments would be doubled by “matching gifts” from the profits of several other business enterprises.

But according to Fulton, Deters in fact commingled funds freely, spent large amounts on her family and personal expenses, and had no record of any income from other businesses.

When investors did receive payments, Fulton asserted, these payments came from the funds of later investors. Paying off early investors with money from later investors is the definition of a “Ponzi” scheme, he said, and “This was definitely a ‘Ponzi’ scheme.”

Pressed for evidence, Fulton gave details of several such transactions, including one involving funds from the Cherokee Friends Church, as follows:

Bank records showed that Barclay College, an evangelical Quaker school in Haviland, Kansas, invested $90,000 with Deters in November of 1991. Fulton said the school expected to receive $180,000 after one year. In November of 1992, the school requested $90,000 from Deters, planning to leave the other $90,000 with her program to be doubled again in another year.

Deters sent the $90,000 on November 12, 1992, with an explanation that this was the “matched gift” doubling their original deposit.

According to Fulton, however, Buy endep online the source of this $90,000 was not the profitable outside businesses Deters claimed to be operating, but rather a $93,000 investment from Cherokee Friends Church, which she had received that same month.

Barclay College never received its original $90,000 deposit back, or any other funds from Deters or Productions Plus.

Fulton detailed several other similar transactions, in which investors, principally Quaker and Nazarene church groups, were paid with the funds of other investors.

Steve Gradert, Deters’ defense attorney, attempted to undermine Fulton’s credibility by pointing out that the investigator received some financial aid for his investigation. Fulton replied that the aid came from North American Securities Administators Association, a cooperative program of securities administrators in all fifty states and the federal government, which makes grants to investigations it deems to have national implications. Deters had clients in twenty-one states.

Gradert also repeatedly asked Fulton if he had had difficulty understanding Deters when he talked with her on the telephone, asking if she often interrupted or shifted rapidly from subject to subject. Fulton agreed, but insisted that he understood well enough to know she was failing to comply with the request for records, despite repeated pledges to do so.

Gradert proposed to play a tape of Fulton’s first telephone coversation with Deters, in April of 1994. Fulton made the tape, without Deters’ knowledge. Judge Monti Belot ruled, however, that the tape was not admissible.

Gradert also insinuated that there was a link between Gary Fulton and Maurice Roberts, the former head of Mid-America Yearly Meeting of Friends Church. Roberts recruited numerous groups to invest with Deters, and was forced to resign in October, 1994 after the scheme fell apart. Deters has alleged that Roberts misused her program for his own benefit. Roberts is expected to testify in the trial, perhaps on Thursday.

Gradert disclosed that in the early 1990s, Gary Fulton’s wife Pam Fulton worked in an office at Friends University where faxes from Maurice Roberts were sent to Priscilla Deters. Gradert implied that this showed some collusion between Gary Fulton and Roberts, in pursuit of Deters.

Fulton denied this suggestion, asserting instead that Roberts was on the board of Friends University at the time, and his wife worked in the President’s office where there was a fax machine, and numerous faxes went in and out. Fulton insisted he was not acquainted with Roberts until he began his investigation in early 1994.

Fulton examined records of Deters’ operation from the beginning of 1990 through March of 1995. In this period, he stated, she took in a total of $6,457,325. Of this total $5, 470,638 came from deposits by investors; the balance, $986,685, was from sources Fulton was unable to identify.

Defense attorney Gradert did not challenge Fulton’s account of the funds transactions. He stated, however, that the heart of this case was the issue of whether Deters had any “intent to defraud” her investors.