February 15, 2013
No Charges Filed in $148 Million Cornerstone Bankruptcy Case
Statute of limitations expires on PCA-linked failure that wiped out 3,500 investors.
It appears that no criminal charges will be filed against officers in a Presbyterian Church in America-linked investment company that declared bankruptcy in 2008, causing 3,500 investors to lose $148 million.
The federal statute of limitations expired on Dec. 31, and at least two states have indicated they won't pursue further action after issuing cease-and-desist orders.
Atlanta-based Cornerstone Ministries Investments (CMI) blamed its troubles on devaluated properties caused by the plunging real estate market. However, securities filings revealed the vast majority of CMI's loans were in risky second mortgages.
Although investor Bob Wildrick of Blairsville, Ga., and fraud investigator Jim Wanerski had prodded federal officials to pursue charges, Wildrick wasn’t surprised by the lack of action.
“As for due diligence, you wouldn’t think that the thieves mentioned in Matthew 6:20 would also be ordained teaching elders in the PCA or deacons in a Baptist church,” said Wildrick, who wrote a four-part series about CMI for a Presbyterian publication in 2011. “Yes, we were laying up treasure on earth for our retirement, just like many of the other 3500 investors in CMI, and we were all taken by their smooth tongues.”
Wildrick and others claim that principals Jack Ottinger and the late Cecil Brooks, and others, profited handsomely before the scheme collapsed. They say not only have leaders (who reached civil settlements with the bankruptcy court trustee) escaped criminal charges, several returned to the pulpit.
“Numerous examples of faith-based schemes exist,” Wanerski said. “These are hideous schemes, as they likely take the ‘soul’ out of people.”
Attempts to reach Ottinger through his attorney for comment were unsuccessful.