Tips(How To)  |   Christian News  |   Church Gist  |   Ministry
Prayer Points  |  My Story  |  Ratings  |  Talk Show Church Insider  | Church Jobs


ADVERTISE YOUR BUSINESS

OUR BIG UPDATE! 
 

« | »

Lawsuit Claims Self-Dealing by Billionaire’s Christian Foundation


A lawsuit claims that a wealthy benefactor used his Christian foundation to engage in self-dealing.

Grace and Mercy was allegedly utilized as a “financial escape pod,” according to a former director of Bill Hwang’s investment firm, who is demanding millions of dollars in compensation.

A lawsuit filed by a former managing director at Archegos Capital, a family office at the center of one of Wall Street’s largest white collar crime investigations in decades, claims that the Grace and Mercy Foundation, the Christian nonprofit associated with the company, engaged in fraudulent activity. He is requesting millions of dollars in damages, claiming that part of the $800 million in assets held by the foundation was money intended for the salaries of Archegos employees.

Bill Hwang, the millionaire founder of Archegos who is open about his Christian beliefs, was accused by federal prosecutors in April of racketeering and “vast fraud.” Prosecutors claim that in 2021, banks that provided loans to Archegos lost $10 billion, and the company’s demise caused the stock market to lose $100 billion. On a $100 million bond, Hwang is currently unrestricted while awaiting trial.

Brendan Sullivan, who began working at Archegos in 2014 and left amid the company’s demise in March 2021, is suing for millions of dollars in back pay. He claims Archegos management pushed staff members to reinvest their bonus money into a company fund, which Archegos allegedly invested in equities and transferred to Grace and Mercy. He said that the charity afterwards sold the stocks and received the proceeds. In doing so, Archegos would receive a tax benefit for the donation and valued shares would be shielded from taxation.

The lawsuit claims that the Archegos Fund, which contained employee deferred compensation, was used to transfer all of these shares to the foundation without the employees’ knowledge or approval. According to Sullivan, the employee fund lost a total of $500 million. At the time of his resignation, Sullivan was due $30 million in deferred compensation, and he claims he hasn’t gotten any of it. The complaint against Archegos, its executives, and the foundation claims that he was one of the company’s 27 full-time workers.

Read Also
6 International Christian Celebrities Who Are Not Ashamed Of Jesus Christ(PHOTOS)

The tables in the case, according to Bloomberg columnist Matt Levine, showed that Sullivan had only contributed $3.8 million to the deferred compensation fund; he had calculated the $30 million value based on Archegos’ overstated revenues in March 2021. Regarding the lawsuit for $27 million in paper profits, Levine referred to it as “a combination of chutzpah and thorough contract interpretation.”

Sullivan, a member of the Manhattan Christian community who participated in a fellowship through Redeemer Presbyterian Church, claims Hwang handled the fund like a “cult” and used religion to coerce staff members into reinvested their income in Archegos. He claimed that performance appraisals included inquiries about an employee’s religious beliefs and that the foundation, which had lunchtime Scripture readings, put pressure on staff to attend.

Although there are several errors throughout, Sullivan’s expansive 99-page lawsuit is loaded with emails and chats precisely outlining his complaints. He is suing as a dissatisfied former employee and outlines job chances Hwang promised him but never materialized. Enron employees who lost millions in retirement after the company’s collapse filed comparable cases in the early 2000s and ultimately prevailed in a class-action settlement.

Mr. Sullivan’s case against the Grace and Mercy Foundation is “laden with unfounded and frivolous charges, all of which will be convincingly refuted in court,” according to Christopher Porrino, an attorney for the foundation. He also said that the foundation would keep up its grantmaking activities, which it has been doing since 2006.

In 2019, the most recent year for which data is available, Grace & Mercy gave away around 5% of its assets, or $30 million, to a range of Christian groups including the Bowery Mission, Prison Fellowship, and Fuller Theological Seminary. According to Sullivan, Hwang used the monies for his own gain under the guise of the grants to Christian organizations.

Read Also
China Bans Online Church Services

According to Sullivan, Hwang referred to the foundation as his “escape pod” and repeatedly informed worried workers that if Archegos failed, he could relocate them to the foundation and utilize its funding to launch “Archegos 2.0,” a new investment company. According to Sullivan, Hwang thought about giving Archegos the assets from Grace and Mercy but decided against it after learning that it would be against the law.

According to Sullivan, “Hwang suggested that some Archegos workers might receive foundation funding to launch their own investment vehicles, from which the foundation could earn management fees.”

The fact that Archegos, Grace and Mercy operated as one organization even though they were legally separate is at the heart of Sullivan’s complaint. The two organizations shared office space and staff, and according to Sullivan, they frequently had “firmwide” meetings with participation from staff from both Archegos and the foundation.

The lawsuit states that Hwang “used Archegos staff, administrative functions, and resources to administer the foundation” by “routinely and informally moving money and shares from Archegos accounts to the foundation, and his family’s own private non-fund accounts.”

Patrick Halligan, chief financial officer of Archegos, was identified as the foundation’s bookkeeper on its most recent tax return. Along with Hwang, Halligan is accused of racketeering and fraud in the Archegos case. The case filed by Sullivan claims that “Halligan…was crucial to the intermingling of assets, shares, and money.”

Andy Mills, an official with Archegos and a former president and board chair of The King’s College, a Christian university in New York, is also named in the complaint. In the federal case, Mills wasn’t given a charge.

Read Also
Why There is a Decline in the Number of White Southern Evangelicals Attending Church

According to Sullivan, Hwang and Mills allegedly promised workers compensation through Archegos, Hwang’s personal funds, or the foundation when Archegos was having financial difficulties. According to him, Mills threatened workers who were considering quitting by stating that they would no longer receive any of their deferred compensation if they left.

To CT, Mills refused to comment.

According to David Shapiro, a financial crimes expert at the John Jay College of Criminal Justice, if the foundation engaged in self-dealing similar to that of Archegos and operated as a single unit, authorities might be more inclined to pursue it.

He made it apparent that he didn’t know the truth regarding claims made against Hwang and Archegos, but added, “If I’m dishonest with my left hand, that’s probably significant evidence that I’m dishonest with my right hand.”

Shapiro noted that the foundation’s rate of return exceeded the amount it was dispersing, suggesting that it was managed with more prudence than risk-taking Archegos.

Shapiro stated that he might “fear more” for the foundation if the 990s were being completed by a smaller company as opposed to a big accounting firm like KPMG because the latter has greater financial independence from a single client and is better equipped to point out ethical transgressions. According to Grace and Mercy’s 2019 990, its accounting firm has three members.

“ERISA infractions” and tampering with employee remuneration are very serious matters, according to Shapiro. Fraud under the Employment Retirement Income Security Act (ERISA) is one of the claims made in the complaint. “The situation is just awful.”

The federal case against Hwang and Halligan is still ongoing, and by July 20, the prosecution must submit discovery—evidence that the defense can examine.


Share this post below ??


Want To Advertise On Nobelie? Click Here Or Chat Us On Whatsapp +2349028041964 | Send a mail to realnobelie@gmail.com


Get Latest Christian Stories From Nobelie In Your Inbox

* indicates required
No Responses Yet

Leave a Reply



NOTE:- After Dropping Comment Wait A While, Your Comment Will Appear After Moderation!!




Go Back To The Top

« | »


Looking for something? Search below




About Nobelie | Online Christian Publishing Platform

Nobelie – About Nobelie Meaning 👉 “The Gospel is Not A Lie” is an Online Christian Publishing Platform That Focuses On Happenings Around The Christian World. Our Editorial Process Our editorial team is committed to bringing you Happenings in the Christendom information that you can trust. We want you to feel confident that NoBeLie provides […]more →



Pages