Gospel for Asia to Pay $37 Million in Class Action Lawsuit Alleging Mishandling of Donations

Gospel for Asia’s “Women Reaching Women” outreach program ministers to women in India’s rural areas. | (Photo: Gospel for Asia)

The U.S.-based mission agency Gospel for Asia has reached a $37 million settlement to a class action lawsuit that accuses the nonprofit of mishandling hundreds of millions in donations designated to be used in the mission field worldwide.

The ministry, founded by K.P. Yohannan over 40 years ago, was accused in the lawsuit filed in 2015 of racketeering, fraud, and financial mismanagement. Among other concerns, Yohannan and his associates were accused of using donations earmarked for charitable purposes within its mission fields to build personal residences and a headquarters in Texas.

K.P. Yohannan. | (Photo: Facebook)

The organization has throughout the years-long legal battle maintained that it didn’t fraudulently use funds. GFA has labeled the claims false.  Nonetheless, GFA was expelled from the Evangelical Council for Financial Accountability and the National Religious Broadcasters after financial accountability concerns were voiced.

On Thursday, GFA announced that the class action lawsuit that has threatened the ministry’s survival will soon come to a close.

The lawsuit is being resolved through a settlement agreement between the parties, according to the “preliminary approval application” filed in federal court. According to GFA, the settlement procedure was ordered by the court in an attempt to satisfy the plaintiffs’ concerns before the scheduled trial.

Although GFA will ultimately pay $37 million as part of a settlement fund, some of which will have to be raised over the course of the next year, GFA stresses that the settlement is not an acknowledgment of guilt. Additionally, the settlement does not admit any liability or wrongdoing whatsoever.

The agreement reads in part that “[GFA’s] position is that the evidence demonstrates (i) all funds designated to the field were sent to the field and used for ministry purposes; and (ii) no Individual Defendant, as defined herein, received any improper personal gain or enrichment from or related to donated funds.”

The language of the agreement seems to refute a claim reported in the media last year that as little as 13 percent of donations to GFA make it to the mission field. The settlement states: “The parties also mutually stipulate that all donations designated for use in the field were ultimately sent to the field.”

“For three long years, our ministry wondered more often than I’d like to admit if we would survive this ordeal,” Yohannan said in a statement. “We are so incredibly thankful for the prayers and the ongoing support of our many faithful friends and partners. We look today toward the future with optimism in our hearts ‘being confident of this one thing: that He who began a good work in [us] will continue to perfect it.’”

Johnnie Moore, the founder of the evangelical public relations firm The KAIROS Company, said as an acting spokesperson that GFA “did not act fraudulently” and that “all the donations they received made it to the field.”

A screen shot of Gospel for Asia’s Christmas catalogue. | (Photo: Screen Grab Gospel for Asia)

“The agreement to settle was, in part, precipitated by a concern that the ministry could continue to bear the weight of defending itself,” Moore, who also serves on the U.S. Commission on International Religious Freedom, said in a statement shared with The Christian Post.

He added that the agreement equates to GFA essentially “refunding donations.”

“Class action lawsuits are enormous burdens for large, for-profit companies,” Moore stated. “So one needs just to imagine the weight of an action like this against a not-for-profit organization. The good news is that the lessons learned from this burdensome series of events will make the ministry stronger.”

The settlement agreement stipulates that approximately 200,000 GFA donors will be eligible to receive a portion of the agreed upon settlement.

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Source: Christian Post