In an extraordinary ending to an $85 million Ponzi scheme, a federal judged has ruled that victims of the Church of God fraud will receive 70% of the money returned to them, the Associated Press reports.
Normally in a Ponzi scheme, where money from new investors is used to pay interest to older investors, victims are usually cleaned out entirely.
The amount returned to investors will be almost $60 million, taken from them during the scheme run by the fundraising arm of the Church of God, called the Church Extension. The investor/church members thought they were investing in church construction projects. Instead, they were funding a classic Ponzi operation.
The ruling was made in an Indianapolis federal court, where U.S. District Judge David Hamilton formally ended the case, which began in 2002 when the Securities and Exchange Commission filed suit against the church.
More than $70 million has been recovered from the liquidation of church assets, and other funding such as private contributions. Part of the $70 million has been used for professional fees, like attorneys.
The Church of God is headquartered in Anderson, Indiana, and has more than 230,000 members nationwide, and more than 2,000 affiliated congregations. The Church established the Church Extension in 1921 to operate its fundraising, along with another Church subsidiary, United Management Services, Inc, an Indiana non-profit corporation.