Religion and investing, I wouldn't be the first to point out, seldom mix. So when a local church founder and self-professed "apostle" named Neulan Midkiff offers to sell you interest in foreign bank deposit programs and promises no risk and high yield, I would say, take a pass. Sadly more than a thousand well-meaning investors didn't. But the good news is that Midkiff, who denies wrong-doing, and his "prophetess" wife, Donna, are now on the hook for a multi-million dollar fraud:

'Apostle' was a swindler, SEC says - Forest Lake church founder accused of financial scheme

BY MEGAN BOLDT
Pioneer Press
Jan. 16, 2006

To many in the small congregation of Shiloh Family Church in Forest Lake, Neulan Midkiff is a man of God. He gave to those in need and even helped found the church. But federal regulators paint a different picture. In a lawsuit filed in U.S. District Court in Texas, the Securities and Exchange Commission accuses Midkiff and five others of participating in a high-yield investment scheme that offered monthly returns between 4 percent and 12 percent — without risk. The scheme allegedly brought in at least $36 million and possibly as much as $150 million.

Midkiff, 63, did not return messages left for comment. But he did deny wrongdoing to Mark King, a financial consultant for the firm that has court-ordered control of his and the other defendants' frozen assets.

The case could grow to affect about 1,500 people from across the country who put money into what authorities call a Ponzi scheme, which uses the contributions of newly recruited participants to cover extremely high returns promised to original investors — until the ploy crumbles.

Investigators claim Midkiff alone brought in more than 200 people who invested more than $2.6 million. Many of those were members of his congregation, and some took out second mortgages to raise their stake, said King, who works for Hays Financial Consulting in Atlanta, the court-appointed receiver.

"The people I talked to couldn't believe he did this," King said. " 'He's a minister.' 'He's Apostle Midkiff.' 'He was trying to build this church for the community.' They were shocked."

Wendy Goers, co-pastor at Shiloh Family Church with her husband, vehemently defended Midkiff and said he is wrongly accused. "I respect the man greatly," Goers said. "He would never do anything to hurt anyone. He's more likely to give someone the shirt off his back. He's a good Christian man."

The SEC alleges that Midkiff and the other defendants — who live in Texas, Atlanta and Australia — offered and sold interests in foreign bank deposit programs that they promised would yield high returns.

Investigators claim the money never went to the purported deposit programs, while the promised monthly returns haven't been paid since September. The civil complaint says the program has been going on since at least July 2004.

Religion seemed a recurring theme: According to court documents, some investors became aware of some defendants through churches or religious organizations. The alleged ringleader, Atlanta resident Travis Correll, portrayed himself as a "good Christian" and philanthropist who donates to charitable causes. "Midkiff may be parroting Correll's sales pitch to prospective investors," SEC staff attorney Ronda Blair said in a court document.

Several former neighbors in a Forest Lake neighborhood where Midkiff used to live said they were approached — or know people who were approached — to invest. Apparently, people who had invested with Midkiff would tell others about the plan and rave about the returns they were seeing. Some invested, trusting Midkiff because he was a minister, King said.

Records show Midkiff and his wife own two homes in Forest Lake, including a lakefront house purchased last June for almost $1.3 million. And they were the registered owners of four vehicles — including a Mercedes-Benz, according to Minnesota Department of Public Safety records retrieved in August.

Court documents allege Midkiff funneled about $2.6 million to Correll from Midkiff's own company, Joshua Tree, a limited liability company in Carson City, Nevada. "I'd say that's a conservative amount," King said.

Goers refused to talk about the case or give details about the church.
But neighbors said the congregation is small, with maybe 100 members. Midkiff was the "Apostle" leading Feast of Tabernacles Ministries, ac-cording to the group's now-defunct Web site. His wife, Donna, is its "Prophetess."

Shiloh Church was to be the beginning of the ministries' plan to plant a network of churches around the globe, the site said. Their mission: "to teach and preach the gospel of our Lord Jesus Christ as we seek and save the lost through bridges of outreach that span the gap between the Body of Christ and the world." The husband-and-wife team offered five-day "prophecy training" seminars, which cost $45 for individuals and $65 for families.

Investigators are examining whether Midkiff owned the church building, King said, as the court-appointed receiver tries to find and secure the defendants' assets and report them to the federal judge handling the case. Depositions will then begin to seek facts from all the purported players, he said. If the court finds any wrongdoing, the frozen assets could be used to pay back some of the money owed investors. "It's like a big jigsaw puzzle," King said. "It's going to take a while to piece together."

The original article appears here, via the Twin Cities Pioneer Press.

-- MDT

Labels: ponzi scheme