Former Israelite House of David member launches--and loses--lawsuit over the sect's remaining assets

As reported by Mike Martindale of the Detroit News, March 6, 2018 (bold in original):

Pontiac — An excommunicated member of a century-old west Michigan religious group is alleging a few “interlopers” have conspired to loot more than $50 million in assets from the organization.

Charles W. Ferrel, 59, who lives in Hawaii, claims in his 27-page Oakland Circuit Court lawsuit that a few members of the Benton Harbor-based Israelite House of David have diverted funds from the organization’s purpose, endangered its favored federal tax status as a nonprofit and exposed it to potential tax liabilities.

Ferrel, a former trustee and director of IHOD, said he was wrongfully excommunicated five years ago but is still faithful to the church’s doctrines and wants to prevent its destruction. Ferrel seeks reinstatement and control of assets he alleges have been diverted to at least 10 limited liability companies.

Short of that, he believes the organization’s sizeable assets should be turned over to the state of Michigan.

“It is the most bizarre lawsuit I have seen in my entire career,” said Ferrel’s attorney, David M. Black, who has been practicing law for 43 years. “The group itself is a very interesting chapter in Michigan’s history involving communal life, even an entombed leader. There was the purchase of Australian real estate, and a way station in Hawaii.

“And now persons here who have had little to do with the church are now attempting to enrich themselves with its assets.”

Ferrel names Gregory Eversole of Bridgewater and Brian Ziebart of St. Joseph as part of the alleged conspiracy.

Eversole, 66, could not be reached for comment. A social media posting described him as a retired accountant from St. Joseph who had taught college-level accounting classes.

When reached for comment, Ziebart, 55, described himself as an “employee of the House of David” but declined to elaborate. Ziebart, who on a personal website listed his work history as a “scooper” at an ice cream business, is now described as an IHOD archivist and historian.

He referred questions to his attorney, Eric Nemeth, a Novi tax attorney and resident agent for the IHOD companies.

“No one has even been served with this (lawsuit) yet but from what I know Ferrel is making some exaggerated, fabricated, inaccurate accusations and we will be vigorously defending our clients, including Eversole and Ziebart,” Nemeth said.

“It baffles me why (Ferrel) is doing this,” Nemeth said. “He signed an agreement several years ago in which he irrevocably surrendered his membership and interests. Irrevocable is irrevocable.”

Nemeth declined to detail the 2013 agreement or confidential settlement made out of court to Ferrel, whose attorney, Black, described it only as a “large check.”

Ferrel was living on the island of Maui in Hawaii, which had been envisioned as a “way station” between Benton Harbor and Australia, a country that figured prominently in IHOD’s formation and present-day finances.

Ferrel was partly responsible for managing the church’s Hawaiian center and overseeing assets in Australia between 2010 and 2013, when he, his mother and Ferrel’s male partner were excommunicated by IHOD.

How it began

To help understand complex matters with the IHOD group, it is helpful to review its colorful history. A thriving Christian communal colony, the Israelite House of David was started in southwestern Michigan in 1903 by Benjamin and Mary Purnell, two Ohio preachers who joined the “Visitation Movement.”

According to court and historical records, by 1906, the IHOD colony owned about 1,000 acres where members harvested fruit and grain. By 1916, the group numbered around 1,000 members who lived communally, shared property, practiced vegetarianism and abstained from tobacco and alcohol.

The colony had its own carpentry shop, cannery and orchestras. It created a miniature railroad, zoo, amusement park and traveling baseball team with players who sported long hair and beards.

Because of such nonreligious activities, the IHOD drew the attention of the Michigan attorney general, who in 1907 determined it was holding and using real estate in excess of its charter.

This led to the original corporation being dissolved and a new group being formed under the leadership of Brother Benjamin Purnell.

According to the Ferrel lawsuit, in 1904, Brother Benjamin had traveled to Australia to recruit IHOD members and obtain property.

An Australian colony was envisioned, where IHOD members would “ingather” as the world collapsed as predicted in the New Testament’s Book of Revelation. The faithful would live on vast tracts of Australian property outside Sydney before returning to Benton Harbor and repopulating the world.

According to court records, after allegations of financial impropriety were made against Brother Benjamin, IHOD split into two factions in the 1930s — one led by Purnell, another by his wife, Mary — and property was set aside in a trust for the benefit of members.

The membership of the Australian group was largely forgotten and by the early 2000s, according to the lawsuit, only one member survived: a trustee named Joyce Jones who kept the financial affairs of the colony confidential.

Jones died in 2010 and according to the lawsuit, the Australian financial assets amounted to a fortune. The land acquired in Australia had appreciated in value over generations and accountants there had sold off the property and reinvested the proceeds.

While membership back in the U.S. had also shrunk, a few members remained in the Benton Harbor area, including Wilma Estes, who had befriended Ferrel and his mother, according to the lawsuit. Both of the Ferrels became IHOD members in 2010.

‘They are almost all gone’

Chris Siriano is the founder and owner of the House of David Museum on Main Street in St. Joseph, and has spent 30 years collecting, preserving and displaying the history of the group. The museum contains more than 10,000 photographs of residents of the commune and thousands of pieces of historical memorabilia – from musical instruments to amusement rides.

Siriano, a local historian, has written two books on IHOD and produced a documentary, “The History of the House of David, A Compelling Curiosity.”

Siriano also has taught classes on IHOD, which built more than 100 structures on church property, including a 32,000-square-foot, 102-room mansion where only one member lives today. Church members had interests in gold and diamond mines, Siriano said.

“They were a fascinating, creative, very intelligent group,” said Siriano, who has also reopened the IHOD amusement park, complete with a miniature train, which was closed for decades.

“They had a semi-pro baseball team that was the only white team to play in the Negro league. ... They had a female pitcher who struck Babe Ruth and Lou Gehrig out in the same game.

“What I could never understand is with all their knowledge and vision, how they couldn’t see they were killing themselves off — I call it race suicide.”

The IHOD congregants were celibate, he explained. And in time, members died off.

“They felt that if they followed their own rules, they would live forever,” he said. “But they didn’t believe in procreating their families.”

Siriano said he has talked with several IHOD members over the past five years and local banks that received fund transfers from Australia. He speculates assets exceed $217 million.

“Sad that they (members) are almost all gone now,” he said. “There is only one member who has been here since the ’40s and he is nearly 100 years old and in very poor health.”

The last ‘true believer’?

According to the lawsuit, Eversole was part of a group that “conspired and hatched a plan” under which Eversole, who taught accounting at a local college, ingratiated himself with Estes.

An IHOD tenet called for each incoming member to transfer his worldly goods to the community.

“Mr. Eversole did no such thing,” the lawsuit alleges. “Rather, he transferred his property and business to his family to keep it from IHOD, the very antithesis of the communal community that defines IHOD.” The lawsuit said Eversole does not live communally, refrain from alcohol or practice vegetarianism.

According to the lawsuit, Estes died in May 2016 and just three members of the sect remain: Eversole, Ziebart and an elderly man who possibly suffers from dementia.

Eversole made Ziebart, “who was or is a Baptist,” a trustee and member of IHOD, according to the complaint, which alleges Ziebart does not ascribe to the tenets of IHOD nor did he contribute his worldly goods.

“It’s our theory that (Eversole and Ziebart) learned of the assets while Ferrel was in Hawaii and convinced Estes to excommunicate him and his mother,” said Black.

Nemeth, who represents Eversole and Ziebart, disputes the suit’s contention that Ziebart is an IHOD member.

The lawsuit alleges IHOD does not conduct services nor do its remaining active members live communally. Both Eversole and Ziebart have separate addresses, neither at the group’s Benton Harbor headquarters.

According to the complaint, Eversole and others have created 10 limited liability companies “presumably to conduct secular business, or in an attempt to protect assets from forfeiture.”

Black said a copy of the complaint was just sent to the Michigan Attorney General’s Office for review.

“Our hope is that the AG will look into this matter as well,” said Black. “While no one has said any crimes have been committed, the state may take interest in funds that might rightfully belong to the taxpayers of Michigan.”

The Attorney General’s Office did not respond to a request for comment.

Black said Ferrel is concerned that “he is witnessing the destruction of a religion he believes in.” Ferrel may be the only living person who is a “true believer” to IHOD tenets and the only qualified person “with the capacity to manage its assets to advance its religious purposes.”

The lawsuit, assigned to Judge Shalina Kumar, seeks an injunction against any diversion of funds. It requests that Ferrel be returned to control of IHOD assets and property, or that a receiver be appointed to liquidate the church’s assets and turn over proceeds to the state for disposal as provided by law.

The lawsuit also seeks judgment in excess of $25,000 against the IHOD LLCs, Eversole and Ziebart.

Siriano said he was not surprised by the lawsuit because he has heard rumblings for years from different people that “something needed to be done to save the House of David.”

He’s hoping his museum can at least preserve the church’s heritage.

“Maybe this is it — I think the place is a treasure,” Siriano said. “My hope would be for someone to take it over and make it a Greenfield Village-like destination. It is a large piece of the state’s history.”

See my post See my post 90 years ago: The death of Israelite House of David leader Benjamin Purnell (December 16, 2017)

September 9, 2018 update: As reported by Mike Martindale of the Detroit News, September 5, 2018:

Pontiac — A man who argues his former church is being looted by its director of more than $50 million has no legal standing to bring a lawsuit in the matter, an Oakland County Circuit judge ruled Wednesday in dismissing the complaint.

In March, Charles W. Ferrel sued the Israelite House of David, a Christian Benton Harbor-based voluntary religious association, alleging “interlopers” had taken over the century-old church and conspired to excommunicate him and his partner and evict them from a church-owned property in Hawaii.

The church’s attorney, Kenneth Neuman, described the lawsuit during the hearing as a “shakedown” and “attempted money grab.”

Ferrel and Gregory Furstenwerth, both church members for nearly four years, obtained a $2.4 million settlement, two vehicles and property from the church after they were excommunicated in 2014. Each man and their attorney, David Black, received separate $800,000 shares.

“He (Ferrel) doesn’t have (legal) standing,” said Judge Shalina Kumar, noting how Ferrel had signed a confidential settlement agreement in 2014 with a clause he relinquished his church membership and position and any future legal claims with the House of David.

Ferrel was a former trustee and director at the church who moved to Hawaii on instructions from a previous director, now deceased.

The lawsuit alleged money had been diverted from the communal colony’s original purpose, endangered its favored federal tax status as a nonprofit and exposed it to potential tax liabilities.

The lawsuit named House of David Director Gregory Eversole of Bridgewater and Brian Ziebart of St. Joseph as part of the alleged conspiracy. Ziebert, 55, is believed to have been brought into the House of David by Eversole, 66, a retired St. Joseph accountant, but he describes himself as an “employee of the House of David.”

Both Eversole and Ziebert were in court Wednesday but did not speak during or after the hearing.

Ferrel attorney David Black argued Wednesday that the original lawsuit concerned changes and circumstances in the church — now with “all the earmarks of a corporation” — which did not exist at the time of the settlement, so the clause was not applicable.

He described Eversole as a “Johnny Come Lately” who worked his way into the church and diverted money donated by members over the years to 10 limited liability companies. Black argued Everole turned the church into nothing more than a “holding company” destined to be sold off.

Black had asked Michigan Attorney General Bill Schuette's office to look into the House of David. If his client were not reinstated to the church, Black said he hoped the state would attach all assets of the church for the taxpayers of Michigan.

Without any explanation, Schuette's office declined to get involved in the case.

The church’s members, which once numbered in the hundreds and who lived together in a communal setting, are celibate and have all nearly died off, Ferrel said. The church has allegedly stopped taking new members, holding any meetings or conducting church services.

Ferrel did not appear at Wednesday’s hearing but outside the courtroom Black expressed disappointment at Kumar’s ruling.

“We thought we had a made a good argument,” said Black, who said they have not decided whether they will appeal.

“My client and I are pleased at the ruling by Judge Kumar,” Neuman said after the hearing. “This dismisses the complaint.”

Neuman also requested Kumarto order arbitration for $10,000 in penalties and violations of the agreement he argues he and his client are due, including more than $20,000 in legal fees.

The House of David was started in southwestern Michigan in 1903. According to historical records, it owned about 1,000 acres where members harvested fruit and grain. By 1916 the church had around 1,000 members who practiced vegetarianism and abstained from tobacco and alcohol.

The group built more than 100 structures on church property, including a 102-room mansion. It also operated several commercial ventures, including an amusement park and zoo, and fielded a travelling baseball team.

The group envisioned a colony in Australia where members would gather as the world collapsed as predicted in the New Testament’s Book of Revelation. After the “ingather,” the members would return to Benton Harbor and repopulate the world.

It is believed the funds, especially from Australian real estate deals, amounted to a fortune.