Pastor & Ohio Politician Named In $1 Million Fraud Complaint
CINCINNATI (CN) - A church pastor and a state representative conspired with others to defraud investors of $1 million and funneled the money into a church and other accounts, including $15,000 to the politician's campaign fund, 14 plaintiffs claim in court.
Lead plaintiff Thomas E. Walter sued Peter Beck, an Ohio state representative; Janet Combs, a pastor; Ark By the River Fellowship Ministry; the Estate of Thomas Lysaght; TML Consulting and five other defendants, in Hamilton County Court.
Defendant Donovan Donohoo Jr. was Beck's 2010 campaign treasurer, according to the complaint. The plaintiffs claim Beck's campaign got at least $15,000 from money "invested" with TML.
CBS TV station WKRC-Cincinnati reported in November that defendant Beck, head of the Ohio House Ways and Means Committee, "is connected to an alleged fraud that caused investors to lose millions of dollars. Hundreds of thousands of those investment dollars were apparently used to fund a religious organization tied to a woman we [WKRC] profiled years ago when former followers accused her of running a cult."
Beck told WKRC: "I don't know what you're alluding to and I'm not going to answer any questions," the CBS affiliate reported in its Nov. 16, 2012 story , "Unholy Profits - Fraud May Be Connected to Church."
Beck refused to answer questions about his "connections to lawsuits from two different sets of investors alleging that a Cincinnati man, Tom Lysaght and his wife, Janet Combs, defrauded investors out of millions of dollars," WKRC reported.
Lysaght and Combs lived in a "castle purchased through their companies," including TML Consulting, the TV station reported.
The new lawsuit, filed on Jan. 3, states that "after investing nearly $1 million in TML, plaintiffs became increasingly concerned with the status of their investments, as all named defendants failed to keep them properly informed concerning TML's business operations and financial performance. Thomas M. Lysaght and Combs evaded plaintiffs' numerous requests for information concerning TML. When defendants were responsive to plaintiffs' requests, they misrepresented the status of their investments and failed to disclose the true condition of TML's business operations."
Combs is Lysaght's widow and used the money generated from TML to fund the church's operation, according to the WKRC report.
In 1992, Combs ran a church called the New Burlington Fellowship, which former members, including her own daughter, described as a cult that brainwashed its members, WKRC reported.
The article claims that defendant Beck worked as a consultant for TML and "at various times through the years, also signed checks for the Ark by the River church."
According to the 55-page complaint filed last week, after two plaintiffs received a letter stating that TML was insolvent, "plaintiffs received information demonstrating Lysaght, TML and Combs misappropriated the funds from plaintiffs' investments and used plaintiffs' funds for purposes unrelated to TML's business."
The investors claim in the complaint that "Lysaght, TML, Combs and Ark by the River misappropriated and converted plaintiffs' funds by, among other things, paying money to Ark by the River, of which Combs is listed as 'Pastor,' paying other investors, and withdrawing significant sums of cash from TML and CT's accounts for undisclosed reasons, including the payment of substantial commissions and consulting fees to Beck, Donohoo, DeMois, and various law firms."
(Defendant Donovan Donohoo Jr. and Associates Inc. is now known as Donohoo, Cupp, Beck & Associates, of Milford, Ohio, according to the complaint.
(Defendant Demois is Chip Demois, of West Chester, Ohio.
(CT stands for Christopher Technologies, a startup software company that Lysaght started with two others, and for which Beck worked as CFO, according to the complaint.)
In the complaint, the 14 investors describe the loss of varying amounts of money. They claim: "Lysaght, TML, Combs, Beck and DeMois engaged in a pattern of behavior wherein they would all solicit investments, and once the investment was paid into TML and CT's accounts, these defendants would immediately misappropriate and convert the investment. Examples of this pattern of behavior include, but are not limited to, the following:
"A. On March 8, 2010, [plaintiff] Michael Farms' [Inc.'s] $500,000 investment was deposited into TML's bank account. The next day, Combs wrote a check from TML's account to defendant Ark by the River, in the amount of $100,000. Two days later, Lysaght wrote another check from TML's account payable to Jeff Hauck in the amount of $58,300. Jeff Hauck was an investor in Christopher Technologies along with a number of the plaintiffs. His wife, Angie, is Janet Combs' assistant, and Jeff and Angie are members of Ark by the River. None of the other investors were or have been repaid. Five days later, $15,000 was wired to TML CEO DeMois's consulting company CRT Resources Inc. The following week a payment of $2,933 was made to Donohoo. The same week Beck, who was running for state representative for the State of Ohio received a check for $5,000 made payable to his campaign fund, Friends of Pete Beck, treasurer Donohoo. There was another check written to Beck's campaign from the TML investor's account on August 23, 2010, for $10,000. A check was written for $25,000 to Thompson Hine law firm to establish a TML angel fund unbeknownst to plaintiffs. The investors gave no authorization for these expenditures."
The Haucks are not parties to the lawsuit, nor is Thompson Hine.
The complaint continues: "B. On June 15, 2007, plaintiff Cook's $30,000 investment was deposited into TML's bank account. On June 18, 2007, Combs wrote a check from TML's account to Ark by the River in the amount of $10,000. The next day Combs wrote another check from TML's account to Ark by the River in the amount of $5,000. Additional checks to Ark by the River were signed by Combs out of TML's account in the amounts of $20,000 and $58,000 on August 20, 2007 and September 28, 2007, respectively. Donovan Donohoo Jr. and Associates Inc. Certified Public Accountants generated the financial statements for Ark by the River. In 2007 there were $133,000 in funds transferred from TML to the Ark by the River by checks written by Combs. These deposits were referred to as 'unknown income' on the financial statements.
"Throughout 2008, 2009, and 2010, Combs wrote multiple checks from TML's account to Ark by the River, representing hundreds of thousands of dollars."
Ark by the River's Facebook page calls it a nondenominational church on the east side of Cincinnati.
The investors say they "have not received any of their investments back from TML, nor have they received any benefit whatsoever from TML or any of the other defendants."
They seek imposition of a constructive trust and compensatory and punitive damages on 22 counts, including fraud, conversion, civil conspiracy, unjust enrichment, negligence, and breach of loan agreements.
They are represented by J. Thomas Hodges in Cincinnati.
Beck, a CPA and a former mayor of Mason, Ohio, describes himself on his website as "pro-business, pro-life conservative."