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A church elder from South Florida who sought to form a “Christian” bank in Broward County to help process checks for a nationwide Ponzi scheme has been banned from banking by the Federal Reserve System. Carl V. Thomas, an elder of the notorious Greater Ministries International of Tampa, was enlisted by followers to illegally gain control of the former First Western Bank in Cooper City, the Fed said in an order issued June 7. The Fed also issued cease-and-desist orders against Thomas and 17 followers and immediate family members for their alleged roles in a scheme that ultimately cost 18,000 investor-followers between $50 million and $60 million. In a telephone interview from his home in Lawrenceville, Ga., Thomas, 67, adamantly denied he did anything wrong. “They are just trying to blackball me,” Thomas said. He is fighting to reverse a court-ordered sale of his shares in the Broward bank, which is now a branch of 1st United Bank in Boca Raton. But the Fed order says that Thomas’ group violated federal banking laws by failing to obtain necessary approval before secretly purchasing a controlling stake — as much as 29 percent — in First Western Bank. The Fed’s conclusion was affirmed by U.S. Administrative Judge Arthur L. Shipe. First Western, according to the Fed, was seen by the leadership of Greater Ministries as a conduit for cashing illicitly collected checks even as national banks refused to do so because of pressure from federal regulators and law enforcement authorities. “Greater Ministries desired to obtain control of a financial institution and secure favorable account relationships for itself and its members,” according to the Federal Reserve order. The Fed’s disciplinary action comes six years after federal and state law enforcement officials shut down Greater Ministries in 1999 for bilking investors out of millions. The Tampa group, authorities alleged, induced 18,000 “simple, God-fearing” people to invest about $500 million in a decadelong Ponzi scheme that guaranteed to double an investment within 18 months by currency trading and buying gold mines in Liberia. Greater Ministries persuaded followers, including white supremacists and Pennsylvania Mennonites, to leverage their homes, credit cards and retirement funds to invest with the church’s fund managers. Followers were reminded of the biblical passage of Luke 6:38 that states, “Give and it shall be given unto you,” according to the Fed’s order. About 12 Greater Ministries leaders were ultimately convicted or pleaded guilty to criminal charges of conspiracy and fraud for the scheme and are serving prison sentences of up to 27 years, according to press reports. Neither Thomas nor the others reprimanded by the Federal Reserve have ever been charged criminally for their involvement with Greater Ministries International. Besides Thomas, cease-and-desist orders were issued against his wife, Eva; son, Stephen; daughter-in-law, Mary Beth; and mother, Marguerite. Orders were also lodged against church followers Charles Tomlinson, Scott and Angela Ward, Forrest Buckley, James C. Crowe, Johnny V. Jones, Harper Guinn, Jeff Guinn, Herbert Phillips, Lloyd Phillips, R.L. Phillips, Stanley Phillips and Rhonda Phillips. All of those disciplined live in the Atlanta area, except for Tomlinson, who resides near Tampa. The cease-and-desist order bars those individuals reprimanded from working or being affiliated with First Western and its successor. They are also banned from acquiring an interest in the institution. The Federal Reserve order claims Thomas’ group obtained as much as a 29 percent stake in First Western, which violates the Change in Bank Control Act. The act requires federal regulatory approval for any purchase where an individual obtains a 10 percent stake or more or where a group obtains 25 percent of an institution. Thomas is a Miami-Dade County native who worked as a banker for nearly 13 years between 1956 and 1968 at the former Riverside Bank, Midtown Bank and Bank of Coral Gables, which were controlled by the same group. He left banking for a career in religion, attending the former Florida Bible College in Hollywood. Thomas contends the regulators banned him from banking in an effort to void his First Western stock certificates, which he refuses to hand over despite First Western being sold to 1st United Bank in March 2004 for $6.6 million. The bank’s shares sold for about $17 a share, a premium over the $12 a share Thomas’ group paid. “They didn’t want to pay me for my stock from the sale,” Thomas said of the Fed. “They wanted to keep my money.” At the Fed’s urging, the U.S. District Court in Atlanta ordered the estimated $1.5 million from the sale of the Thomas-controlled stock to be handed over to the bankruptcy estate of Greater Ministries. The suit brought by the Fed to force the sale was filed in Atlanta because the Federal Reserve Bank of Atlanta has jurisdiction over institutions in Florida. Greater Ministries creditors are scheduled to receive more than they were originally supposed to because of a reversal by the Fed. Regulators had originally requested nearly $500,000 in civil fines be assessed against Thomas’ group. The money was to come from the sale of their stock. But the Fed decided to drop the fines so that more money would flow to creditors. Trustee Kevin O’Halloran of the U.S. Bankruptcy Court in Tampa said the funds from the stock sale will mean a few extra pennies on the dollar for creditors, who claim they are owed between $50 million and $60 million by Greater Ministries. Returns to creditors stand at between 10 cents and 15 cents on the dollar. “Given the losses that they have suffered already, any recovery, especially one of this magnitude, is going to be extremely helpful and beneficial for creditors,” O’Halloran said. “We are grateful that the Federal Reserve made the decision that it did. While I don’t know what the internal thinking was, they certainly were cognizant of the losses that these individuals have suffered.” Regulators say Thomas’ group acquired shares of First Western stock between 1997 and 1998, using Greater Ministries’ funds. As a former banker, Thomas was asked by Greater Ministries’ leadership to identify “banking relationships” because its existing ones at Bank of America and the former First Union Bank were being curtailed. He was paid $535,000 by Greater Ministries to buy the stock. According to the Fed order, Thomas sought to rally members to buy First Western stock at the conclusion of Bible study meetings. In the interview, Thomas denied the claim. He said he never ran any Bible study meetings. The bank purchase effort came as regulators moved to shut Colorado-based BestBank in 1998, where Greater Ministries had a reported $35 million on deposit. The loss proved difficult to overcome since the alleged Great Ministries Ponzi scheme suddenly had much less money at its disposal to pay off existing obligations, according to press reports. As Thomas searched for a bank, he learned that First Western Bank was for sale. Thomas told the Daily Business Review that he was familiar with the institution because it was located about a mile from his mother’s home. Regulators said that Thomas and his son, Stephen, quietly solicited First Western shareholders willing to sell and match them with followers of Greater Ministries who were willing to buy. “The purchasing group was motivated to take part in the acquisition scheme by their religious conviction and their desire to promote Greater Ministries’ mission,” according to the Fed order. “Moreover, virtually all of the funds used by purchasing group members to acquire First Western shares were provided by Greater Ministries, and were presumably derived from the victims.” Thomas conceded that he privately arranged the purchase of First Western shares in his name and those of others in the hopes of saving money for all. Thomas said that by reaching private agreements with stockholders, the prices were more open to negotiation. “We didn’t go through the regular channels because we were able to buy stock for less money,” Thomas said. He added that he did notify regulators of his purchases and even took out newspaper advertisements disclosing the purchases as required by law. Thomas said he has a letter from the Fed to prove it. But the Fed’s order rejects that assertion. “This simply misstates the content of the letter, which in fact informed respondents that they needed to provide additional information concerning, among other things, the source of funds for their purchases of shares,” the order says.

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