News From Downtown Concord New Hampshire: Pastorgate?


loan documents lead to site behind church

By DANIEL BARRICK  (Concord Monitor)

Lawyers investigating an alleged financial scam in the Lakes Region say the father of the man accused of orchestrating the fraud received $2 million in bogus loans with his son’s help.

Robert Farah, pastor of Center Harbor Christian Church, says he’s a victim of the alleged scam run by his son, Scott Farah. But in Belknap County Superior Court yesterday, lawyers investigating Scott Farah and his former business partner said Robert Farah profited from his son’s alleged fraud.

Attorney Thomas Donovan, who’s representing several former investors of Financial Resources Mortgage in Meredith, said he and the trustee overseeing Scott Farah’s bankruptcy recently uncovered loan documents, signed by Robert Farah, that detail money collected from investors, supposedly to finance a housing development behind Robert Farah’s church more than three years ago. But only two houses have been built so far, and lawyers say they don’t know where the rest of the money is.

“If that doesn’t implicate Robert Farah, I’m not sure what will,” Donovan told Judge Kathleen McGuire yesterday.

Jim Donchess, a lawyer for the trustee overseeing Scott Farah’s bankruptcy, said his records confirm Donovan’s claims.

“There is a total of $2 million in loans guaranteed by Robert Farah. And there doesn’t seem to be anything close to $2 million in assets to back that up,” Donchess said.

Outside of court yesterday, Robert Farah said those claims were news to him. He did not deny signing the loan documents and guarantees but said, “I didn’t know what I was signing.”

“I did not know that,” Robert Farah said of the loans he’s alleged to have guaranteed. “I know this is going to sound stupid, but I did not know that.”

Robert Farah said he wanted to review the documents with his lawyer. Asked where his son was, Robert Farah said, “He’s somewhere,” and walked away.

Robert Farah’s attorney, Erland McLetchie, did not return a phone call yesterday.

According to the trustee overseeing the case, Scott Farah used his business, Financial Resources Mortgage, as a front for a massive Ponzi scheme that swindled as many as 500 people out of at least $80 million. The company closed its doors without warning in early November, and Farah’s former investors say they have no idea where their money is.

State officials have forced Financial Resources Mortgage and a related company, CL&M, into bankruptcy, and the FBI and Securities and Exchange Commission are investigating the matter. Neither Farah nor his former business partner, Donald Dodge, have been charged with a crime.

Yesterday’s hearing was the latest court proceeding to tie the elder Farah to his son’s alleged scam. At least one former investor has sued Robert Farah claiming that the pastor induced him to invest with Scott Farah, a charge Robert Farah has denied. The trustee overseeing Financial Resources Mortgage has also been granted permission to question Robert Farah and gather information about his ties to his son’s business.

The property Robert Farah is alleged to have solicited loans for sits behind his church, on the Center Harbor-Moultonboro border. According to Donovan, the land was donated to Robert Farah several years ago.

The property is divided into 14 lots of about 1 acre each. A quarter-mile road, called Colonial Drive, runs through the property. Just two of the lots have houses on them; several others have foundations or piles of dirt, or are covered with thin woods.