Pastor's properties still subject to suit
December 09, 2009
LACONIA — The properties of a local pastor named in one suit against Financial Resources Mortgage, Inc. and CL and M will remain attached to the suit though a judge has ordered it to be proven that those properties will be sufficient.
Judge Kathleen McGuire made the ruling in Belknap County Superior Court on Friday.
Robert Farah, the father of Financial Resources manager Scott Farah and the pastor of the Center Harbor Christian Church, was named in a suit by Robert and Chris Furgerson and RBF Investments against Financial Resources, CL and M, and related parties seeking an ex parte attachment of $1.288 million. McGuire said all parties named in the suit had no objection to the attachments but Robert Farah.
Farah appeared in court representing himself and speaking against the attachments. Farah said his and his wife's bank accounts were subject to the attachment as well as his home and cottage.
In the petition, the Furgerson's said they invested $1.6 million in 16 different investments with Financial Resources. According to the suit, Robert Furgerson was invited by Scott Farah to stay at Robert Farah's lakeside cottage in Moultonboro. There, Robert Farah allegedly encouraged him to invest in his son's company, saying it had provided many returns for members of his parish.
The suit alleges that Robert Farah was aware of schemes taking place with Financial Resources and enticed members of his church to invest.
"I didn't entice Mr. Furgerson or anyone else to invest in Financial Resources and CL and M," Farah said. "Mr. Furgerson came to my cottage as a guest. He talked to me about Financial Resources; I said 'I don't know much about it.'"
The Furgersons attorney, Chris Carter, said he had heard of Robert Farah in another lawsuit prior to this one regarding alleged fraudulent business dealings that also involved his son and Financial Resources that involved parishioners. Carter said there was joint participation between the Farahs in the allegedly fraudulent dealings.
Carter said earlier in 2008, the Furgerson's made a $60,000 investment.
"A drop in the bucket compared to what actually happened," Carter said.
Carter said Robert Farah urged Robert Furgerson to invest in the company, touting large gains made by members of the church. Carter said that Farah also allegedly said in a prayer before dinner that "God would shine on Scott Farah's successful investment and the business deal they would pursue together."
Carter said this resembles a similar pattern with the Farahs. Carter said Oskar Klenert was seeking funding for an erosion control method he had invented, and Robert Farah encouraged him to invest with Financial Resources.
Klenert allegedly invested with the promise of seeing $2.5 million in funding and, according to Carter, "never saw a nickel of it." In the agreement, Carter said paperwork showed Robert Farah would receive 45 percent interest.
Carter said the investment was done through Earth Protection systems, and on a federal SS4 form Robert Farah is listed as a president of the company. Earth Protection Systems was one of the companies the Furgersons invested in that Carter said was a fraudulent vehicle.
Farah said that he and Klenert are still friends. Klenert said he was advised by his attorney not to speak directly on the case. McGuire did ask Klenert to come up and speak on a few details, which he did. Klenert said he and Farah are still friends and he was not enticed into investing with Financial Resources, saying the arrangement was more like a financial plan.
"This is now what I knew of the Farah family," he said, but added he was not arguing that the allegations could be untrue.
Carter said there have been two other cases involving investments by members of the church. Gudrun Hanington, an elderly woman, was allegedly persuaded to give the money from the sale of her house to Robert Farah and Farah was documented to receive $10,000. When Hanington was in the hospital with cirrhosis of the liver, the suit said that Farah was made executor of her will, unbeknownst to her children.
Carter said he learned of the cases while on another case against National Inspection and Repair, which had closed down. He had been contacted by Jackie and Ron Stone, who had invested their life savings in National Inspection, and later by Hanington's attorney.
"Robert Farah was standing before the congregation on Sunday and exhorting the prowess of Scott Farah," Carter said, saying the church has allegedly received over $170,000 from Financial Resources. "We are alleging a conspiracy. We have provided the court with ample information to show how he's benefited."
Farah said the allegations are completely false, saying no one in the church has invested in the company.
"We have a poor church, most of the people are not working," Farah said.
Farah said he did not entice Hanington to invest. He was given $10,000 to hold for her that would go to her children, and he never cashed the check. Additionally her house was not sold until after her death.
Farah said the Stone case was settled out of court with sealed documents and was not supposed to be brought up in court again.
Farah did say that when one of the Stone's parents died they received $126,000 and asked him what they should do with it. Farah said he suggested they invest the money in a company like Financial Resources, but did not directly recommend that they invest in that company, though they eventually did.
He said he did not urge members of the congregation to invest.
Carter said Farah was named as one of the incorporators of Financial Resources. Farah said he got involved with the company was first getting off the ground.
"As soon as it got going I pulled out completely," Farah said, saying he never held a position in the office. "I am not in ministering and investment."
Robert Furgerson took the stand, saying he was first contacted by Financial Resources in September of 2007 and invested around $60,000 after seeing information on their investments.
In February of 2008, Furgerson said Scott Farah was calling on a regular basis. Furgerson had an investment in an apartment complex and he and his wife were expecting around $1.25 million and Scott Farah's urgings "got quite intense." He was called by Scott Farah and invited to come to New England and look at a property and stay with his father at his lakefront cottage.
He visited a property on Cape Cod and one in Sanbornton and stayed in Moultonboro at Robert Farah's cottage on Lake Winnipesaukee. Furgerson said he and Robert Farah spoke before dinner and Robert Farah urged him to invest with his son, saying that Scott Farah had brought excellent returns to people in the church.
Furgerson said he, Scott and Robert Farah, Robert and Scott Farah's wives, and Scott Farah's two teenage sons sat down to dinner and held hands in prayer. Furgerson said part of the prayer was to bless his son's business and for successful business between Scott Farah and Furgerson.
"In all my other dealings I'm a bean counter," Furgerson said. "From the first phone calls with Scott I kind of checked my brain someplace. Everybody said positive things. I visited their home; the family situation was kind of like Beaver Cleaver. When I look back on it now it was kind of like a movie set. I was sucked in."
He said he later spoke with Klenert and learned of Robert Farah's involvement in Earth Protection Systems.
He later went to visit a property on Colonial Drive in Moultonboro that was supposed to have a modular home installed after a series of investments and a loan to Lawrence Baldi.
"I found the property to be a hole in the ground that had no improvements made to it," Furgerson said, saying he learned the Baldis were told that he approved of an exchange in properties when he was not notified.
Robert Farah's properties include one property containing his home, his lakefront cottage, one property he said is being rented out to a widow, and storefront property in Franklin.
McGuire ruled that the plaintiffs had met the burden of proof for the attachments, though Farah does not have substantial assets. The attachments on the properties will remain in effect, though Farah must prove that the equity in the property is enough to satisfy the judgment against him.