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The Actual Lawsuit
IRS Criminal Investigation

A Save 3ABN Exclusive


The IRS Criminal Investigation of 3ABN

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-------- Original Message --------
From:  G. Arthur Joy
Subject:  IRS Criminal Investigation
Date:  Fri, 30 Nov 2007 12:19:27 -0700

REAPING THE WHIRLWIND: The IRS Criminal Investigation of 3ABN

Recently there has been much discussion on Black SDA Forums, etc, regarding the source of information that led to the IRS Criminal Investigation. The inference has been made that the source of the investigation, and therefore the beneficiary of any financial reward, was either Robert Pickle or Gailon Arthur Joy.

We have watched the unfolding of this investigation for over a year now and have repeatedly warned various directors and even the New President of the pending process, each time suggesting they be pro-active, open and transparent. Later, as the investigation gained steam we went so far as to suggest that they contact the IRS to work out a consent decree and fine. That list included a conference President, the Chairman of the board, and the New President, and we have borne the ridicule of each one, with disdain in some cases. They now REAP THE WHIRLWIND.

In the Lawsuit brought against this journalist and Robert Pickle they have made the allegation of Defamation Per Se, on the basis that we have made certain allegations regarding transactions that constitute criminal activity. The transactions are real and documented, the question of criminality is left with the prosecutors who have apparently found sufficient cause to open a criminal investigation.

The entire story really begins in April of 2006 in the trust services department of 3ABN in balmy southern California, just outside the gates of Loma Linda University, to some us still stubbornly known as CME (College of Medical Evangelists). There, the Director of 3ABN Trust Services, Leonard Westphal, is reported to have had a significant falling out with the entire staff of the Trust Services division. The issues related to concerns regarding the interpersonal skills of Mr Westphal with Trust Services Clients, certain processes and procedures which the staff found questionable and ultimately some rather rash statements attributed to Leonard Westphal that would lead to an EEOC (Equal Employment Opportunity Commission) complaint by some staff members.

The staff is said to have coalesced into a team determined to correct the issues. They put together packages of documentation providing evidence to support their concerns with various documents and appropriate cover-letters, sending them to Mollie Steenson, Danny Lee Shelton and Chairman Walter Thompson. Leonard was recalled to the Illinois Campus in April and while there shot some film footage promoting trust services. When he arrived back in sunny Southern Cal, he was followed by Mollie Steenson. Mollie spent most of a week interviewing all the staffers and at the end of the week Mollie Steenson is said to have summarily dismissed the support staff, leaving the alleged perpetrator, Leonard Westphal, in place.

At least some of the alleged victims / disaffected / dismissed employees filed complaints with the California Dept of Fair Housing and Employment in Los Angeles which opened a case file # 37A-AS-10394. The allegations are said to have included Racial Discrimination, Sexual Harassment and Retaliation and sought compensation for lost wages and emotional distress. Two staffers are said to have kept a log of abuses and made these available to Investigators.

A hearing was scheduled for Sept 21, 2006, before the Hearing Examiner and just before the hearing, attorneys for 3ABN claimed exemption from State regulation as a religious organization and the Dept. counsel concurred and referred the file to the Federal EEOC office, that months later accepted jurisdiction.

In the interim, an attorney for one of the complainants became certain that some of the activity described and documented may be violation of the Federal Internal Revenue Service IR Code and is said to have arranged a meeting with former 3ABN staffers and an IRS Special agent in the criminal investigations unit in San Bernadino. There were several meetings as statements were taken and documentation given. Less than a month later, Special Agent CS of San Bernadino had transferred the file to Special Agent CM of Fairview Heights, Illinois, just outside Saint Louis, Missouri.

In October, CM opened a file and began taking statements from various persons, mostly former 3ABN staffers, and collecting documentation of various transactions. As their investigation was under way, I crossed paths on several occasions. Based upon reports from various people who gave statements or documents, the reported designation of this particular Special Agent was C--M--, IRS.CI, a clear reference to the criminal investigations unit.

Shortly after discovering the trail of people who had been interviewed by IRS.CI we made several efforts to contact the Illinois Conference President and 3ABN Board member, --- Denslow. During one contact in late 2006 when the IRS Criminal Investigation came up, Denslow clearly was skeptical at the notion and indirectly contacted 3ABN's business office to see if there was any IRS investigation going on and was assured that there was no such thing. Danny made reference to it later in broadcasts and scoffed at the notion.

Noticeably, the IRS Investigative trail went cold in mid-December and I did not cross paths for months until late March of 2007. The reason is unknown, although, the time frame co-incidentally coincided with the firing of the US Attorney for Illinois by AG Gonzales and the confirmation of her replacement.

The investigation maintained a steady pace and rumors were afoot throughout Southern Illinois for several months. The lawsuit was brought by 3ABN and Danny Lee Shelton against this journalist and Robert Pickle in April of 2007. And the IRS criminal investigation plodded on.

Sometime in the late spring we received word that a local politician was stating that the IRS was after Danny Shelton, but gave no specifics. It was not until summer 2007 that the investigation moved from phone statements to the field phase and they began visiting various former staffers and taking formal statements. However, there were key parties that had not been interviewed and we were fairly certain that until those statements were in hand they would not be complete enough for an actual charge.

Then in late August, we were informed that those key parties were scheduled for interviews and realized the case would be open to the public within weeks. We had growing evidence that people were clearly telling 3ABN administrators that something was up and one party that had been interviewed told Pastor Lomacang of the interview, and he was warned it was most likely just an impostor, that no IRS investigator would have approached him that way.

We were informed that one former director was interviewed and promptly contacted the 3ABN Board Chairman. Given the influence of that former director, it would be a safe assumption that he made other parties of interest aware as well.

As Danny was introducing 3ABN's new President, James Gilley, there was growing evidence that Danny was grossly aware of an Investigation and taking steps to disgorge assets that would be problematic such as the sale of his own 4300 sq ft home and a horse barn for a dozen horses on 18 acres. He sold the home, according to land records for a mere $290,000 and held a $220,000 mortgage from James Gilley to himself. He also was reportedly given title to a 40 acre tract by the 3ABN Board at the fall Board meeting in late September 2007, did not take title, pulled a permit to build a 2800 square foot house for $165,000, foundation poured and framed under 3ABN title. Shortly after this process, The Fjarli Foundation filed a release of the $200,000 lien taken to help Danny pay Linda for her portion of the house post divorce. We assume that it is probable that Fjarli did not know about an individual account that Danny did not disclose until rather belatedly after Linda's attorney pushed for discovery, and which Danny kept well hidden from Linda prior to the divorce, that contained an astounding $190,000. In fact it is reported to have been established and hidden well from Linda while running up her liabilities to establish credit well before Dr Arild Abrahamsen came into the picture. Was he preparing for a divorce??? Of course that sum is nothing compared to the rather healthy mid to low six figure account that he reportedly hid from the board of directors at a bank in Michigan related to Remnant Publications royalties while 3ABN ran up a $3,000,000 dollar deficit in support of his Ten Commandments Twice Removed campaign boondoggle and reportedly had to borrow from trust funds to cover the deficit.

Despite all of this activity, as late as Sept 2007, Danny on 3ABN Live scoffed at the notion of an IRS investigation and commented that the IRS doesn't go around behind your back doing investigations but comes right up to your front door. Just a few days later they did just that!!!

In Sept we had made contact with James Gilley indirectly and then directly to warn that he needed to deal with this crisis immediately. His response was classic head in the sand -- he was hired to deal with the future and would not deal with the past -- and went on to express disdain for the premise that those who were trying to destroy 3ABN would be willing to help save 3ABN. Scorned again!!! Really tough to get a date with that 3ABN board. Although we are pretty good at handling rejection by now---what's this, number ten or so???

In late September, after key statements were taken by the IRS Criminal Investigation unit, this journalist made comment that I expected that there would be an IRS visit to the campus very shortly. On Sept 28 we began to hear the first rumors of an IRS visit to the 3ABN campus and how they had taken boxes of documents. In late October, the Board held an emergency meeting in the Worship Center of 3ABN for a day and a half to deal with the IRS criminal Investigation Crisis. On Tuesday, November 27, 2007 the 3ABN Board held a special meeting in St Louis, Missouri, with rumors racing up and down the halls of 3ABN that the Board had gone to work out a deal with the IRS.

Unfortunately, the "rumors" so frequently ignored by the 3ABN Board and Executives have been largely true, and given the sums provable for personal inurement alone, the consent decree and the fine to settle such a substantial claim could run seven figures and require significant improvements in oversight, constituency and governance. Issues the Chairman has repeatedly asserted they have various clean bills of health from accountants and attorneys.

And to think that we could have addressed all this and more either directly with a "reasonable" board or via an ecclesiastical process last year leaves one dismayed and aghast at the indignant refusal to listen to the stock-holders in the pews and of course, yours truly, the nobodies.

Just who the new constituency will be is not yet clear, although the latest word from the Pacific Union is that Central California Conference President, Jerry Page, will serve as the new Chairman of the board and other sources have told us that the Upper Columbia Conference President, Max Torkelsen, has also agreed to join the board. It won't be long and the GC will have a controlling interest on the board that President Folkenberg worked so hard to achieve ten years ago and was rebuffed by Danny Lee Shelton.

Where Danny fits into the process long term is unclear. He reportedly remains on the staff as a "consultant" and still retains his office while 3ABN has put on an addition to include the new President's far more spacious office complete with his own private bath. Danny is a frequent host on 3ABN Live and has an agreement to acquire forty acres from the 3ABN Board that has "cost 3ABN tax money for several years" according to 3ABN Board Chairman Dr Walter Thompson. Many observers seem to feel it is business as usual but a board grappling with the current problems cannot possibly continue business as usual. Many observers wonder just what the directors must think about Danny's administration in retrospect with all the problems they must deal with from this period -- and one must also ask the inevitable question, is it the devil attacking 3ABN or is 3ABN simply REAPING THE WHIRLWIND???

Either way, 3ABN will need our prayers and support as never before as they weather the storm.

Gailon Arthur Joy,

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