The news involving Staley’s fraud case has become a talking point for many Messianics in the HRM. Yet there are many false reports being circulated by Staley supporters that have have no basis in fact. Such reports lack substance based on what has already been established as truth based on extensive Federal investigation, public records and court documents that have been notarized by government officials.
Without properly weighting the facts, Monte Judah, in what I can only liken to the crazy rantings of a senile old man, stood to Staley’s defense this Friday, going on about how secular judges are corrupt and can’t be trusted to make a “righteous judgement.” These inflammatory statements do nothing but feed the anti-government narrative, similar to the baseless rhetoric that the “I am Mike Brown” group rallied behind after the Darren Wilson Grand Jury verdict was announced.
Update: On Aug 28, Monte Judah retracted his statements regarding Staley's case saying that they were not entirely accurate. He went on to say: "In the case of Jim Staley, it is very clear that the Government was as fair as they could be, they were impartial in how they went about it, they followed the due process procedure, he was fully represented with legal council, he was confronted with the evidence against him. He made the decision to plead guilty. And the court has rendered a sentence for him commensurate with his misbehavior, his crime."
Despite the assumptions and lack of confidence in due process, I will attempt to address some of the false claims in circulation in an attempt to set the record straight. I encourage you to do your own fact checking. Take the time to reference the Chronology of Significant Events and examine the public records for yourself.
I would also encourage you to read Jim Staley’s guilty plea if you haven’t already.
“The state of MO found no finding of guilt in criminal intent and cleared his name.”
That is irrelevant, Federal investigations always have jurisdiction over state or city. The state case was civil and the federal case was criminal. The state informed Staley that the Fed’s would be questioning him. THE STATE OF MISSOURI DID NOTHING WITH THE CRIMINAL CHARGE BECAUSE OF THE PENDING FEDERAL INVESTIGATION. Thus the state found him neither innocent nor guilty.
“None of this matters, it all happened long ago before Jim Staley was a pastor.”
False. According to the Wayback archives, Staley began posting teachings on the Passion for Truth website in 2004. The Passion for Truth Website states that Staley started the Passion for Truth bible study in his basement in 2007. And he began filming his teachings in 2008 and 2009 while the investment scheme was taking place.
In April 2008 Staley incorporated Passion for Truth Ministries as a 501c3, just a few short months after he formed Wealth Financial and participated in the B&B securities scheme bilking investors out of millions of dollars.
Despite a 2009 cease and desist from the state of Missouri, Staley continued to sell his securities product 4 more under a different name. According to public record, these additional 4 sales took place in 2009 and 2010 during his time serving in ministry.
“No one got to hear Jim’s side of the story!”
In Staley’s guilty plea, he agreed that “the government would prove these facts beyond a reasonable doubt if the case were to go to trial.” So if you want to hear “Jim’s side of the story” read the plea. Any post-plea claims made by Staley that would suggest innocence or deny personal responsibility is nothing more than last ditch effort to save face. Either Staley is guilty of the crimes listed in his plea, or he is guilty of perjury for lying about his guilt. No one can plead guilt and innocence simultaneously, it is impossible.
“Pastor Jim Staley wouldn’t intentionally defraud anyone.”
During the cease and desist, the State of Missouri notified Staley that he failed to disclose facts to his investors and that he’d been making false statements of material facts. YET STALEY CONTINUED TO SELL THE PRODUCT 4 MORE TIMES (UNDER ANOTHER NAME) UP UNTIL 2010, admitting that he knew his clients would lose their money. In court, Staley also admitted that he continued to make the same fraudulent statements to secure these additional investors. Again, Staley admitted to having criminal intent to defraud and agreed that “the government would prove these facts beyond a reasonable doubt if the case were to go to trial.”
“Jim Staley has been making restitution to his clients.”
Diana Collins, the federal prosecutor, told the judge that although the state in 2011 ordered Staley to pay $2.9 million in restitution, he never demonstrated a willingness to abide by it. Staley, who was making more than $120,000 as pastor and has lived for free in a million-dollar home rented by his church, has repaid just $1,950, including only $50 this year, in May. The prosecution stated that Jim Staley has an income from PFT of $10K per month, but that he has set up mechanisms so that he can use the money but it is never officially his, just so he will not have to pay restitution. She also mentioned that PFT pays the rent on his mansion.
Additional Notes: On an August 1st, 2015 Live Stream, Staley asked for donations to go to his victims in order to help reduce his sentencing. If you donated specifically to Jim's fraud repayment fund (After 08/01/15) please contact the FBI or Federal Prosecutors office to ensure your donation was indeed used towards repaying the defrauded elderly.
“Jim was a victim, he didn’t know what he was getting himself into.”
In his guilty plea, Staley admitted that he knew B&B was unable to sell the bundled policies in the secondary market (meaning his investors would lose their money), yet he continued to recruit agents to market and sell the B&B premium financing product. In recruiting agents for B&B, JAMES STALEY made the same or similar materially false and fraudulent statements, representations, and promises to the agents regarding the B&B premium financing product, by stating the product was risk free with a guaranteed return (despite the fact that the type of product he was selling made Missouri’s list of top 10 threats to investors in 2007).
During Staley’s sentencing, the prosecution said that the lack of other’s names on these particular indictments against Jim was no accident. If this case had gone to trial, the others would have been brought forward, and much more would have been explained and revealed. She then said that the Eberles were indicted and were both convicted of one count of Securities Fraud, and that they received the statutory maximum penalty for their crime. She said that Jim Staley “was not a minor participant” in this scheme like the others were.
“Jim Staley has long since repented of his past sin.”
At Jim sentencing, Judge Webber mentioned Jim’s salary of $10,000 per month, the circumstances of the offense, and the lack of previous remorse. He said that “today is the first day that Mr. Staley has expressed any remorse,” and that Jim had previously repeatedly downplayed his role in the offense.
Diana Collins also referenced the PFT live stream on Aug. 1, 2015, in which Jim claimed that he was “like Joseph, in the wrong place at the wrong time.” She then turned to Jim and said, “No the VICTIMS were in the wrong place at the wrong time.” She then read a list of the victims, identified by initials only, and the amount of money each lost. She said the Jim has been unremorseful from the beginning until now, and when he was approached by his victims with questions as to why they weren’t receiving promised returns, he lied and said that everything was fine, long after the scheme had unraveled.
Back in 2014 Staley denied personal responsibility for his actions by blaming his clients losses on the sub-prime mortgage crisis. However, the product that he was offering was not market-based, it was a product based on the purchase of a life insurance product, something which gives a return upon the death of the policy holder, after which time, the investors are paid the death benefit, being listed as the beneficiaries. Those investment dollars enable the policy holder to ‘use’ the investors’ money in place of the money they don’t have access to since their policy won’t pay until after their death. The ‘market’ has nothing to do with that.
Does that sound like a man who is repentant?
“None of the others involved in the scheme were punished as severely as Jim.”
This claim is false. Many of the big players have already been sentenced to prison. Few were granted parole because they are seniors in their 80’s.
“Staley’s clients are just bitter and angry that they lost their money.”
During the sentencing, the victims were referred to by initials for privacy. Almost all of the speakers were middle-aged children of elderly parents, many of whom were unable to attend, due to advanced age, dementia, illness and infirmity.
Victim N.S. said Jim Staley had been characterized by the defense as a good Christian and good family man, “but he is neither.” She said that Staley had asked her to lie to the FBI to cover up his misdeeds, but she refused. She lost over $600,000 and has to date received only $407 in restitution.
Victim C.B. said her parents lost $325,000, which was their entire life savings and now cannot provide for themselves, cannot provide for their food, housing, or their medical expenses. They are on food stamps and Medicaid.
Victim W.F. talked about the fact that Jim Staley targeted seniors, with devastating impact, that his actions were no accident, but were calculated to prey upon the elderly.
Another victim talked about that she had recently been widowed when Staley approached her and told her he was “there to help.” She now suffers from anxiety issues and total lack of trust of other people.
All the speakers spoke of the devastating effect of losing their life savings, the huge taxes they were assessed for cashing in annuities and IRAs before they were supposed to, and said that Staley never mentioned what they would be losing by doing so.
The judge had a whole stack of letters from victims who could not attend. He read from them, saying that he was only going to read excerpts:
One letter said that Jim Staley had sold this “investment” to an elderly man who had diminished mental capacity due to the onset of dementia.
Another said that Jim Staley presented that these were “no risk” investments with a guarantee of a 40% return.
Another said that Jim had claimed that he had sold these investments to members of his own family.
The judge read repeatedly that the investors were not told that they would be subject to huge capital gains taxes for prematurely cashing in IRAs and annuities.
The judge read repeatedly that the seniors now could not care for themselves and are on food stamps and Medicaid.
The prosecution had met with each and every victim and had heard over and over how they met Jim, how they trusted him, how they were manipulated and betrayed by him, and he stole from them their life savings. She said the main question they asked her was always, “When am I going to get my money back?” In answer, she clearly stated to them that she was sorry to tell them , but they were probably NEVER going to get their money back. She said she believes that Jim has never had and will never have any interest in restitution. She referenced the restitution order of 2011, which was for repayment of $2.9 MILLION and announced that to date, only $1,950 had been paid in restitution, with only $50 being paid in 2015.
The prosecution stated that Jim Staley has an income from PFT of $10K per month, but that he has set up mechanisms so that he can use the money but it is never officially his, just so he will not have to pay restitution. She also mentioned that PFT pays the rent on his house.
“Jim Staley was selling a legitimate loan product that was approved in 34 states.”
It was a “viatical settlement” scam. Federal authorities swooped in six years ago and shut it down.
In 2007, the State of Missouri put out a Top 10 Threats to Investors / Top 10 Threats for 2007 list. Here are numbers 8 and 10:
8. Unlicensed Sellers & Unregistered Products: The sale of securities by someone without a valid securities license should be a red flag for investors. Con artists try to bypass stringent state registration requirements to pitch unusual investment ideas like viatical settlements and pay telephone and ATM leasing contracts.
10. Investing in Death Benefit Contracts / Viaticals: Buying the “death benefit” of a life insurance policy, also known as a “viatical,” has become a growing issue. Brokers sometimes sell the life insurance policy of a terminally ill patient for a price below what is promised to be paid upon death. They claim the investor can collect the full value of the policy’s death benefit when the policy holder dies. Needless to say, advances in medical technology are keeping people alive longer than ever, so these schemes should not be considered to offer a guaranteed return.
This, from the original Cease and Desist document from the Missouri Secretary of State (http://www.sos.mo.gov/news.asp?id=802):
“James Staley of St. Charles County is accused of offering and selling unregistered investments in life insurance policies through Wealth Financial International, LLC, a Chesterfield company he organized. Staley allegedly told investors their money would be used to pay the premium on a wealthy person’s life insurance policy, and, in return, they would receive a percentage ownership of the policy.”
The idea behind someone investing in a policy (receiving a percentage ownership of the policy) is that when the policy holder dies, the investors collect as the beneficiaries on the policy. Classic viatical.
From a Findings of Fact Missouri State document, item 12 (http://www.sos.mo.gov/securities/orders/ap-09-14.asp):
12. In July 2008, Staley met with a Missouri resident (“MR1”) about investing in a premium financing program. Staley told MR1 that MR1 could earn 30% interest in two years, guaranteed.
Note that Staley met with the client “MR1” in 2008, offering a product which the State of Missouri labeled in an article as one of the “Top 10 Threats to Investors / Top 10 Threats for 2007”, a year AFTER the article was issued.
Jim Staley states that “The market crashed and so did this product. The Feds just don’t see it. They are over zealous, haven’t done their homework and are convinced I’m a criminal. That’s pretty much it.”
Not true. The product that he was offering was not market-based, it was a product based on the purchase of a life insurance product, something which gives a return upon the death of the policy holder, after which time, the investors are paid the death benefit, being listed as the beneficiaries. Those investment dollars enable the policy holder to ‘use’ the investors’ money in place of the money they don’t have access to since their policy won’t pay until after their death. The ‘market’ has nothing to do with that.
The Feds can see just fine; the product he was offering was either A) not legal in the State of Missouri, and/or B) determined to be a securities product, a product for which Jim Staley was not licensed to offer. The issue is not whether it was ‘fake’ or ‘real’.