Pastor remains on the hook

Pastor Robert Farah of the Center Harbor Christian Church — widely known as Pastor Bob — yesterday denied that he played any part in the financial machinations of his son, Scott David Farah, whose company, Financial Resources Mortgage, Inc. (FRM) allegedly bilked investors of as much as $100-million.

One of those investors, Robert Furgerson of Prescott, Arizona has charged that the pastor, along with son, inveigled him into investing $1.8-million, which has gone up in smoke, and has attached his real estate and bank accounts. Farah, representing himself, contested the attachments at a hearing in Belknap County Superior Court yesterday.

"I didn't induce Mr. Furgerson or anyone else to invest in FRM," Pastor Farah told Judge Kathleen McGuire. He claimed that when Furgerson asked him about the company, he replied "I don't know much about it, but I understand they pay returns of between 12 and 14-percent."

However, attorney Chris Carter, representing Furgerson, insisted that Pastor Farah "can't stand before this court under oath and say he wasn't involved in this fraud. Mr. Farah and I have met before," Carter continued, reminding the court that during the last six years he participated in four suits against FRM — "all four involving Robert Farah." He said that "he had presented the court with "documented proof that the Farahs preyed on members of the (pastor's) church, using FRM as the vehicle. For years they have drawn people into that Ponzi scheme."

Scott Farah, who attended Oral Roberts University in Tulsa, served as treasurer of the nondenominational Christian church with a congregation of approximately 100 members.

When Pastor Farah flatly denied any association with FRM, Carter handed McGuire the original articles of incorporation of the company, listing him alongside his son and Donald Dodge as one of its original directors.

"When he started his business, I loaned him some money," Pastor Farah said, insisting that he had no role in the operation of the business.

However, Carter charged that Pastor Farah advised Oskar Klenert of Mashpee, Massachusetts, the founder of Earth Protections Systems, to seek financing for his company from FRM to develop and market its technology to curb beach erosion. Scott Farah undertook to loan Klenert $2.5-million, of which $50,000 represented an investment by Furgerson. At the same time, Klenert was asked to sign a contract granting Pastor Farah a 45-percent stake in his company, where a tax document identified him as "the principal officer, general partner, grantor, owner, or trustor." Klenert never received a penny of the promised loan.

Pastor Farah explained that he and Klenert were longtime friends and that he presided at his wedding, but claimed that apart from telling Klenert that FRM loaned to enterprises like his, he took no role in the transaction.

When Klenert, who was in court, was asked by McGuire if Pastor Farah induced him to enter a business arrangement with FRM, he answered, "No. No. He didn't."

However, Furgerson, who also took the stand, said that Pastor Farah urged him to invest in Earth Protections Systems through FRM. After making one small investment with FRM, Furgerson closed a property deal in Texas that netted him $1.2-million and prompted Scott Farah to press him to raise his stakes with the company. Furgerson came to New Hampshire and visited with the Farahs at the pastor's lakefront cottage, where he said Robert Farah urged him to invest in Klenert's business.

As Furgerson sat down to dinner with the Farahs, their wives and Scott Farah's sons, he recalled that they held hands while the pastor prayed for the success of his son's business and his guest's investment. "It was like Beaver Cleaver, like a movie set," he told the court.

Ferguson said that he enjoyed a successful career in business, describing himself as "a bean counter" who did "spread sheets on everything." But, faced with the Farahs, he said, "I checked my brain somewhere. I was sucked in."

Carter told the court that Pastor Farah had persuaded parishioners to invest with FRM. In 2003, he said that Gundrun Hanington invested $140,000 in National Inspection and Repair, a company the Farahs knew had shut down. After Hanington died her family recovered the funds when the circumstances were exposed in the course of litigation. Two years later the Farahs settled a similar case with another family belonging to the church that was induced to invest in the same defunct company.

"There is a pattern," Carter said, "that will be replayed as we learn more. We will find that much of the money that disappeared in this case went to this man and his church," he charged, pointing to the pastor.

McGuire upheld the attachments with the proviso that if the value of the properties matched the value of Furgerson's claims, the attachment on the bank accounts would be lifted.