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Megachurch Gets Another Shot at $5 Million

LOS ANGELES (CN) - A federal judge gave a New Jersey-based megachurch 15 days to amend its claim that a California-based accountant for the Western States Golf Association embezzled $5 million from it.

Agape Family Worship Center, of Rahway, N.J., sued Donald Gridiron Jr. and the Western States Golf Association in 2015, in Riverside, Calif. Federal Court.

Agape said it hired Gridiron, an "expert in church-related accounting matters," in 1992 at $5,000 a month, and raised it to $5,500 a month plus expenses in 2009.

Agape, "a large, nondenominational church with approximately 4,000 members," was founded in 1990 as The Love Church by the Rev. Lawrence Powell.

Gridiron, of California, traveled monthly to the Agape campus in Rahway, to work with its bookkeeper, review books and records, and meet with Powell and others. Agape's chief financial officer left in 2007, and was not replaced. Gridiron began embezzling money that year, Agape claimed.

"In 2007, Gridiron began writing unauthorized checks to himself and third parties drawn on AFWC's bank accounts, and sending unauthorized wire transfers to himself from AFWC's bank accounts," Agape said.

It claimed Gridiron made 800 unauthorized transactions from Agape bank accounts from 2007 to 2014.

"Unbeknownst to AFWC," Gridiron also was accountant and treasurer for the Western States Golf Association, and had "exclusive access and control" of its bank accounts, Agape said.

The WSGA, of Corona, Calif., is an association of golf clubs in Arizona, California, Colorado, Nevada, New Mexico, Oregon, Utah and Washington. Launched in 1954, the WSGA provides college scholarships and sponsors an annual golf tournament for members.

Agape claimed that Gridiron transferred $3 million from Agape accounts to himself, $1.9 million to the WSGA, and $40,000 to Gridiron's personal American Express account.

The lawsuit did not state why Gridiron sent money to the WSGA.

Gridiron allegedly confessed the thefts to the Rev. Powell in March 2014, "but significantly misrepresented the total amount stolen."

Gridiron filed for bankruptcy weeks later, Agape says. He claimed more than $4.8 million in gambling winnings, according to a financial affairs statement, "almost the exact amount that AFWC identified as funds stolen from it by Gridiron," the church said.

Gridiron was arrested in Los Angeles in December 2014, and charged with wire fraud.

Agape said it was "shocked and disheartened" by the embezzlement.

"We were betrayed by a trusted certified public accounting professional who without authorization, secretly accessed our church financial accounts, improperly took millions of dollars, and then took systematic steps to cover up his dishonesty," Powell said.

"I feel betrayed because this man used to be my friend," he added. "It hurts, but we serve a God who will get us through this."

Agape sought punitive damages for breach of fiduciary duty, fraud, negligence, civil theft, money had and received, unjust enrichment, and receipt of stolen property.

U.S. District Judge Otis Wright II granted in part and denied in part the golf association's motion to dismiss, on Feb. 16.

Wright denied WSGA's motion on all claims but negligence, unjust enrichment, and punitive damages.

He dismissed the negligence and punitive damages claims with leave to amend.

"Given the allegation that WSGA entrusted Gridiron with its own bank accounts, the more plausible inference would be that WSGA had no knowledge of Gridiron's untrustworthiness," the ruling states. "Therefore, the court grants the motion to dismiss Agape's negligence claim with leave to amend."

Wright said that under a direct liability theory, punitive damages may be awarded for conversion if a plaintiff makes a "required showing of malice, fraud, or oppression."

The judge found that Agape failed to allege facts showing malice, fraud, or oppression on the part of WSGA.

The FBI said in a statement that Gridiron spent the embezzled money on luxury cars, gambling and a his mortgage.

Agape may filed an amended complaint by March 2.

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