In a post on Thursday, I documented an investigation into a large number of real estate transactions centering around Terry Jones and Dove World Outreach Center in Gainesville, Florida. More information has now emerged in my study of publicly available information. In this post, I will show that a large mortgage taken out on the Dove World Outreach property in 2006 was mis-represented in the Form 990 that was filed with the IRS for that reporting period. The executed mortgage agreement on file with the Alachua County Clerk of Court website indicates that the mortgage was for $285,000, while a mortgage with the same agreement date and from the same bank was reported on the Form 990 as being only for $113,885.
The legal entity which operates Dove World Outreach Center is Dove Charismatic Ministries, Inc. Here is a portion of the cover page of a mortgage agreement which has a recording date of June 1, 2006, with signatures on the agreement dated May 19, 2006:
Because the county’s “copy” text overlay has an unfortunate overlap with the “2” of the $285,000 value of the mortgage in the view above, here is a screen capture of confirmation that the mortgage was recorded by the county for that value:
Despite the fact that this mortgage clearly is for $285,000, it is reported as only $113,885 in the IRS Form 990 filed by Dove Charismatic Ministries (pdf) for the fiscal year in which the transaction took place (I am indebted to Peterr for providing the link to the Form 990):
Note that mortgage number two on the schedule shows a loan from Millennium Bank, dated May 19, 2006. However, the mortgage is recorded here in the Form 990 (annual filing of Form 990 with the IRS is required for tax-exempt non-profit organizations) as only for $113,885, while Alachua County records clearly show it is for $285,000. Also note that on the schedule, it is stated that this particular mortgage was taken out for the purpose “Pay off old 1st mtg”. Yet, just a couple of lines lower on this same schedule, it is disclosed that this old first mortgage had only $46,500 outstanding at the beginning of the reporting period. While taking out the reported loan of $113,885 to pay off $46,500 should have triggered alarms, taking out the actual $285,000 loan when the stated reason is to pay off a loan with only $46,500 outstanding becomes impossible to believe. [cont’d.]
Note also on the cover page that this mortgage has a very large balloon payment of $248,991.93 due at the end of the loan period. The interest rate and term of the loan are not disclosed in the document on file with the county, but in the Form 990, Dove states that the term is five years and that the interest rate is 7.870 percent, with monthly payments of $952.62. Multiplying out 60 payments of $952.62 yields payments totaling $57,157.20, only about half of the claimed $113,885 amount of the loan. This means that the claimed payment rate in the schedule does not fit with the claimed loan amount without assuming some sort of balloon payment at the end.
Filing false information on Form 990 is subject to federal penalties. Will the IRS address this clear case of false information? Or has the IRS already started addressing it? More on that interesting possibility in the next post, later today.