RIVERSIDE, Calif. (CN) – A Southern California megachurch is in hot water amid claims it participated in an investment scheme that defrauded several members of their life savings.
Two members of the Water of Life Community Church filed a federal class action against the church on April 21, claiming negligence, unfair business practices and violations of California consumer law.
According to the 17-page lawsuit, the scheme involved “convicted swindler” and church elder Paul Ricky Mata, whom the church paid to teach members how to invest their money.
Mata is also a close friend of the church’s CEO Dan Carroll, and has been a member of the church since its founding 27 years ago, according to the complaint. Neither Mata nor Carroll are parties to the lawsuit.
The members say that as an elder and teacher at the church’s school of ministry, Mata was paid to teach fellow members how to invest and manage their money. They say they and other members were “vigorously” influenced to take these financial seminars, as Water of Life “required its members to participate in Mata’s investment and financial planning course” in order to advance in the church hierarchy and become listed in the membership directory.
Although the church put Mata out as a finance expert, the members say his securities licenses expired in 2012 and that “Mata had a host of unregistered securities and illegal investment advisory arrangements” he foisted upon trusting church members, promising “indestructible wealth” through various classes the church required members to take.
Several church members raised concerns about the legitimacy of Mata’s financial curriculum, but the church rejected their calls for a more appropriate personal finance adviser, according to the lawsuit.
The members say Mata’s scheme ended in 2015, when the Securities & Exchange Commission filed an emergency action against Mata and revealed he had conned hundreds of people out of $14.5 million. The two members say they lost the $1.24 million in their dealings with Mata, and that Carroll turned them down when they went to him for financial help.
They say Carroll’s response to their request for help was that he “did not get involved in money matters.”
The members note in the lawsuit that Water of Life is one of the wealthiest and fastest growing businesses in the Inland Empire, and is currently building itself a $20 million campus.
They have since left the church, according to the lawsuit.
A phone call to the church seeking comment was directed to the human resources department, which has not returned a voicemail as of press time.
The members seek class certification and actual, compensatory and statutory damages.
They are represented by Joshua Kons of Chicago, who did not return an email seeking comment.
According to the church’s website, it operates three branches in the Inland Empire: its main campus in Fontana and two others in Upland and Rosena Ranch. Its membership numbers in the “thousands,” a video on the website says.