CARSON : Church Gets Property Back After Loan Scam

A Carson church finally got ownership of its property back recently after being tricked in a business deal and nearly evicted--all while trying to help a congregation in Samoa.

In 1985, members of the Samoan Congregational Church were looking for a way to raise money for a building project in Samoa. One of the leaders of the church signed what he thought were preliminary loan documents, but among the papers he signed was a quitclaim deed, which relinquished title to the property, said Richard Lyman, attorney for the church. That document gave the church property to Gwendolyn Joseph and her company, Contractor’s Surety Bonding Co.

Joseph took the deed to two lenders and borrowed more than $1.2 million against the property. Although Joseph eventually gave the church some of the money, she never made payments on the loans, Lyman said.

After foreclosure on the unpaid loans, title to the property was sold again, this time to Holm Inc., which served the Carson Street church with an eviction notice in 1988. That’s how the congregation found out the ownership of the property had changed.

Because the quitclaim deed was signed by only one member of the church, and not two as required by church bylaws, the court later found that the deal was invalid. But in the meantime, the company that bought the unpaid notes had the right to demand payment for the church’s use of the property.

The congregation agreed to pay Holm Inc. $25,000 a month until the lawsuits were resolved.

Through bingo games, other fund-raisers and the contributions of its members, the 500-member church scrambled to pay the money, which added up to $575,000.

Finally, when the judge presiding over the last lawsuit said he would probably rule in favor of the church, a settlement was reached. The church got back title to the property, and Holm Inc. kept the money the church had paid.

Because of the lawsuits, church leaders say, the project in Samoa never got off the ground.