A Joliet church could go under if they don’t pay $300,000 owed to a court-appointed receiver who is working to recover investor money that federal authorities said was misused by a fraudulent business owner.
Between 2010 and 2019, Messiah Lutheran Church, 40 Houbolt Road, received more than $780,000 in donations from Today’s Growth Consultant, a company run by Ken Courtright, who was recently convicted of wire fraud. The church ultimately reached a settlement to pay $487,000 to a court-appointed receiver who is working to recover investor money used by Courtright’s company.
While Messiah Lutheran Church has paid $187,000 of that money, they must still pay $300,000 by Nov. 15. Otherwise, the amount the church owes may jump up to $587,000 and cause enough financial stress to lead to a forced sale of the building.
“We were caught in the middle,” said Beth Hohisel, a member of the church.
Hohisel spoke at a news conference on Thursday inside Messiah Lutheran Church. Leaders of the church said they committed no wrongdoing yet they must come up with the money. They are seeking donations from the community to save their place of worship.
The events leading to the crisis at the Joliet church began on Dec. 27, 2019, when the Securities and Exchange Commission sued Courtright and Today’s Growth Consultant. The federal agency filed the lawsuit in order to “stop a long-running Ponzi-like scheme” and fraud by the Courtright and his company.
Federal criminal charges against Courtright followed on Feb. 4, 2020. Authorities alleged Courtright raised at least $75 million from 500 investors who entered into a fraudulent agreement with him.
“The question with charities is do they need to start doing that, checking where funds are coming? But then, what charities are really going to be doing that?”— James Murphy, an attorney for Messiah Lutheran Church
On July 7, a federal jury found Courtright guilty of wire fraud in a seven-count indictment.
Courtright is scheduled for sentencing on Nov. 22. He has also motioned for an acquittal but a judge has not yet ruled on that motion.
The indictment alleged Courtright was running Today’s Growth Consultant as a “Ponzi scheme.” Courtright was accused of using investor funds for his own personal benefit, such as mortgage payments on his Minooka residence and private school tuition.
On Dec. 30, 2020, Melanie Damian, a court-appointed receiver, filed suit against several defendants – including Messiah Lutheran Church and Joliet Catholic Academy – to recover the investor money that federal authorities said was misused by Courtright.
At Thursday’s news conference, Hohisel said the money given to the church has been “long gone.”
“It came in over those many years and we’ve used it to pay our staff, to support our community, to run our church, our day-to-day operations here,” Hohisel said.
The church attempted to get loans to pay back the money, Hohisel said. However, numerous institutions were not willing to provide the church a loan, she said.
James Murphy, an attorney for the church, described the situation as “no different than a natural disaster.”
Murphy said charitable organizations like the church are “not set up to question where donations come from.”
“The question with charities is do they need to start doing that, checking where funds are coming? But then, what charities are really going to be doing that? So, that’s one of the things that I think we’re reaching out for legislation to take a look at and say, ‘Look, there is an issue with how far somebody can go back in terms of clawing back funds,’” Murphy said.
Murphy said under Illinois law, there is no limit on how far back the court-appointed receiver can go to recover the money owed by the church.
Murphy was asked if by The Herald-News if the church feels Courtright shares any blame with its current predicament.
“There is a certainly a recognition that hadn’t he not been making the donations and Today’s Growth not represented that effectively these were free and clear donations, we wouldn’t be in the situation that we’re at,” Murphy said.
Murphy said churches “recognizance the fallibility of people.” Even if a church feels someone has committed wrongdoing against the itself or people in the church, the church’s mission to “get them beyond that point in time, too,” he said.
Hohisel said the court-appointed receiver has been “unrelenting” in demanding the money from the church.
“They certainly don’t care if we lose our home and they don’t mind if we don’t have a place to worship anymore,” Hohisal said.
The Herald-News contacted attorneys for Damian but has not received a response as of Thursday evening.
Damian’s lawsuit claimed the church and other defendants in the case received the money from Today’s Growth Consultant without providing “reasonably equivalent value” to the company in exchange for those funds.
Kurt Hoover, senior pastor at Messiah Lutheran Church, said he viewed the situation as a “modern day story of David versus Goliath.” He called on state lawmakers to change the law to better protect charities from situations like the one afflicting the church.
“No Illinois charity is safe and we do hope Illinois will change their laws to protect charities,” Hoover said.