Monday, February 26, 2018

Should Cornerstone Ministries Investments Have Existed? – Part Two

Tuesday, October 4, 2011, 20:05
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The Role of the Presbyterian Church in America (PCA) Stated Clerk and Administrative Committee in the Establishment of the Presbyterian Investors Fund (PIF) and Cornerstone Ministries Investments (CMI)


Part Two


by Bob Wildrick


In Part One of this article, published August 15, 2011 in the Christian Observer, it was shown from Presbyterian Church in America (PCA) minutes of five General Assembly (GA) meetings the disregard for the members of the GA by the Stated Clerk and the Administrative Committee, who refused to provide the members of the 1993 and 1994 GA’s with the results of the Legal Audit ordered by the 1992 GA. As a result, the members of the 1994 GA were not provided with the information necessary to make reasoned and proper decisions in regard to the Investors Fund for Building & Development (IFBD) and its principals, the Rev. Cecil Brooks and the Rev. John Ottinger.  Consequently Brooks and Ottinger were allowed to escape discipline and start the Presbyterian Investors Fund (PIF) and Cornerstone Ministries Investments, Inc. (CMI), while still maintaining connectivity to the PCA by retaining their credentials as Teaching Elders.

In Parts Two and Three, from Internet-accessible documents, from bankruptcy court documents, from CMI documents, and from information given to the author by other investors, it will be shown that the principals and other employees of PIF/CMI to this day  retain their connections with the PCA.  The Bankruptcy Court Documents (BCD) referred to in the article are available at the BMC Group web site ( From the BMC Group web site, find case number 08-20355.  It is recommended that you first read BCD’s 437  [1] and 530. [2]

Cecil Brooks as Chief Executive Officer (CEO) and John Ottinger as Chief Financial Officer (CFO) founded PIF as a nonprofit 501(c)3 company to sell state registered bonds to fund the construction of churches and church related facilities. Later on, Brooks and Ottinger founded CMI as a for-profit company which allowed more latitude in their endeavors.  Brooks and Ottinger were making loans to retirement homes, low-income housing, and eventually to a high-end retirement development in Texas with developer John Lowery and fitness guru Ken Cooper.

Brooks and Ottinger never severed their connections to the PCA. The Mission to North America (MNA) magazine, ‘Multiply’, winter issue for 1999/2000 [3] lists its contents on the first page, the last “article” being titled “PCA Investors Fund”.  The PCA had theoretically dissolved the Investors Fund in 1994.  The “article” is an advertisement for Fixed Rate Certificates of Participation.  The author often wonder how many people bought these certificates thinking they were investing in a PCA sponsored investment.

An examination of prospectus filings with the U.S. Securities and Exchange Commission (SEC), which can be found on the SEC’s EDGAR Internet site, provide some interesting reading. A prospectus for Series B stock and bonds, [4] shows nothing out of the ordinary.  In several of the submissions filed in later years the following statement is made: “We began operations in 1986 as Presbyterian Investors Fund”. [5] Again, the connectivity to the PCA is communicated.  CMI did not begin operations in 1986 as PIF.  IFBD began operations in 1986, [6] as a PCA agency.

PIF/CMI was required to file form 10-KSB year-end reports with the SEC. In the report filed for the fiscal year ending December 31, 2001, the following statement is made:

Securities registered under Section 12 (b) of the Exchange Act:

Common stock, without par value Chicago Stock Exchange (approved for listing) [7]


This was another falsehood that caused quite a stir in several state securities divisions. CMI entered into consent orders to cease and desist selling investments in several states because the company was never approved for listing on the Chicago Stock Exchange.  Some of the states that Brooks and Ottinger had to sign orders for were; Colorado, [8] Texas, [9] Minnesota, [10] Ohio, [11] New Jersey, [12] Michigan, [13] North Carolina, [14] and if the author’s memory is accurate, Indiana, Maine and Tennessee, for whom original cease and desist orders were not found during research for the article.  In two of the states listed, Colorado and North Carolina, the company had to offer to refund the investors’ money, and as well were barred from selling CMI stock and bonds.

In 2002, another PCA Teaching Elder and CMI Director, Jayme Sickert, came on board as National Sales Director, and eventually became VP for Investor Relations.  As an investment broker/financial advisor, Sickert additionally had been the author’s broker and financial advisor as well as a trusted friend since the early 1990’s. His advice and direction up until this time had been very good concerning Kemper and Lord Abbett mutual funds investments.  In 2001, Sickert asked to move the author’s wife’s Individual Retirement Account (IRA)  into CMI stock because the stock was paying a nine percent return. The author questioned Sickert about this change, especially since the author knew there had been problems with IFBD.  The author and his wife were assured that all the problems that were found had been corrected.  So over the years, the author’s wife’s IRA grew, and the author eventually invested part of his IRA in CMI.  A large mistake was made in trusting Mr. Sickert’s advice and buying CMI stock and bonds.

Cecil Brooks appeared to continually desire to impress investors and potential investors about just how great was CMI.  The author often received letters and glossy advertising material including brochures and DVD’s.  One of the glossy brochures touted: “Expand Your Investment Earning to 9% while EXPANDING GOD”S KINGDOM!” [15] Further down on the left hand side of the brochure, it states that PIF/CMI has financed more than 170 churches and worked with hundreds of others across America over a “17-year” history of ……Excuse me, if PIF/CMI had only been in business since 1994 and this glossy brochure advised that the offer can only be made by Prospectus dated 2001, how could PIF/CMI have had a seventeen year history?   In a November 2005 letter to investors and friends, Mr. Brooks said he missed writing his monthly newsletters. In this letter he states, “Our overall vision stays the same”. [16] Wasn’t the vision originally to fund churches and church related projects?  Brooks lists a group of places that CMI investments were being made in order to serve senior citizens, one being The Northshore @ St Petersburg, Florida. This is the same Northshore that is written about in Bankruptcy Court Document 530 as one of the Certus Management homes that was renovated. [17] Near the bottom of the first page of Brooks’ letter is the statement: “We have two major developments in this type of new seniors market that we are financing.”  The author’s opinion is that the loans to John Lowery and the Lowery Company were not faith-based. More on John Lowery later.

The author and his wife had direct personal experience with Northshore.  Mr. Sickert told the author and his wife to consider Northshore as a residence for the author’s wife’s mother.  She was in her nineties, living in her own home in St. Petersburg, Florida, but was totally devoid of human contact other than an occasional taxi driver and visits from her grandson and family who were working in Miami.  The author and his wife first visited Northshore and later took the author’s wife’s mother there to see it. She refused to consider living at Northshore, stating in no uncertain terms that she was not going to live in that place.  Had she agreed to move to Northshore, within a few months a new residence would have had to be found for her because, with very little notice, Northshore residents were told to move due to the fact that Northshore was to be converted into condominiums.  Certus never completed the renovation, and today Northshore is owned by a Presbyterian Church (PCUSA)-affiliated retirement community and has been renovated.

Another employee, John Wehmiller, came on board at CMI sometime in the 2000’s.  Wehmiller, a series seven registered representative and a Baptist deacon, was given the job of creating CMI’s own broker-dealer corporation called Wellstone Securities. Mr. Wehmiller found out that securities laws prevented CMI from distributing their own securities through an affiliated broker dealer, so another non-profit company was injected into the mix, the African-American Church Growth Foundation Inc., to own and manage Wellstone Securities.  Again, alphabet soup-named companies were being used in a similar manner as to when Brooks and Ottinger were involved with IFBD.

In November 2006, Brooks wrote another of his folksy newsletters giving his farewell message and handing the leadership of the company over to Wehmiller. [18] This was a combined letter which included Brooks’ farewell, and beginning on page two, Wehmiller’s statement saying: “I hope to move us towards an increased emphasis of financing churches.”  Further down Wehmiller writes, “Cornerstone has experienced tremendous success in lending for the acquisition of Independent Senior Retirement Communities.”  The particulars of the Northshore loan were not addressed. Wehmiller lasted one year at the helm of CMI, with Ottinger, who had retired in 2006, then returning as CEO.

The author’s mother-in-law died in November 2006, and the author’s wife, being an only child, inherited the entire estate. After the estate settlement, there was a significant amount of money to invest.  In May 2007, the author called Mr. Sickert and asked him to find an investment in lieu of putting the inherited funds in a bank.  The author’s wife wanted to put the money under the mattress. To this day the author’s wife still wishes that the money had gone into the mattress, and the author agrees with her.

Mr. Sickert returned the author’s call and said that the best place for the inherited funds was in CMI. The author disagreed because of the lack of sufficient investment diversification.  At a meeting with Sickert at the CMI offices in Cumming, Georgia, on June 1, 2007, Sickert insisted that CMI was the only appropriate place to invest. The author and his wife  reluctantly gave in, and regret the decision to this day.  The author is in total agreement with Mr. Pat Huddleston who wrote the article for the Christian Observer published August 3, 2011, titled “Protecting What God Has Given You From Those Who Use His Name.” [19] What remaining assets the author and his wife  have today are in the care of a family investment firm not associated with the PCA. The author recommends that every reader of this article also read Mr. Huddleston’s article. The author now believes that as stated in BCD 530 page 37, [20] CMI was severely cash strapped commencing in the summer of 2007,  and that the author’s and his wife’s funds that were invested on June 1, 2007, were used to pay maturing bonds and the interest that other investors were receiving each month to supplement their Social Security and other income, in other words, a Ponzi scheme.

In December  2007, two CMI-investor friends of the author’s, who each had a CMI bond that was maturing on January 1, 2008, were sent letters informing them that they could roll their bonds over at nine percent for another five years.  The investors wrote separate letters requesting a check for the principal and interest to be sent to their respective Merrill Lynch accounts.  In January 2008, they each received a letter from their Wellstone broker thanking them for their business and friendship along with a form needed to renew their bond.  Wellstone Securities was shut down on December. 31, 2007.

On Jan. 31, 2008, Jack Ottinger sent a letter to the two investors  thanking them for their investments and stating “we value our relationship with you and want to take a moment to update you on your investment with us.”  Skipping ahead to the first two lines of the third paragraph, “It has been our practice and habit to pay interest or principal on the first day it is payable and to avoid delays. Unfortunately the market is not cooperating with us at this time and we are not currently able to make payment of principal and interest to investors.”  Ten days later, Ottinger filed Chapter 11 bankruptcy.

After the author received Ottinger’s letter dated February 20, 2008, [21] he called Mr. Sickert and inquired about what was going on. Ottinger’s letter basically said that: “CMI will have an opportunity to seek to redress the imbalance that has occurred in its operations.”  The last paragraph is an interesting one when read in hindsight: “…our primary interest at this time is you, our investors.  Again, we are pledged to serve you as best we can as the law allows.  We will keep you informed of our progress in doing so. Thank you for your patience.” Mr. Sickert stated that it appears that CMI investors would get ninety six cents to one dollar and six cents back on each dollar invested.

On March 18, 2008, the 341 meeting was held in Gainesville, Georgia. [22] The 341 meeting is in compliance with bankruptcy law and is named after the applicable section of bankruptcy law.  This meeting is where the creditors (investors) get to question the principals of a company that has filed bankruptcy and to hear what they have to say.  The author did not go to this meeting but received a copy of the transcript from the Office of the United States Trustee, James Morawetz.

Q., Jack when you add up the assets, revalued assets, liabilities, what will we have left?

A. I can’t give you the exact dollar amount off the top of my head but at this point I think all of us agree that it’s more than the principal amount of bonds invested.

Q. Repeat that.

A. It’s more than the principal amount of the bonds that we owe….

Later on another investor asked Ottinger:

Q.  …of the assets you said which exceed the total loans how much of that asset pool do you think is actually realizable by many of the people obligated or will it perhaps bankrupt their own business?

A. “I think we’ve answered that question.  We are trying to finalize values but at this point our loan values on a conservative what I call a slash and burn approach …loan values exceed the principal of the bonds, okay, today, this minute.


On July 15, 2008  the Periodic Update to Unsecured Creditors was published. [23] This letter was from the creditors committee that was appointed by the bankruptcy judge. The first line of the next to last paragraph says, “Finally the committee is in the final stages of preparing a plan of liquidation (the “Plan”) for CMI and its bankruptcy estate.”

Sometime in the middle of December, 2008, the author received a call from another investor, who asked: “…have you read the latest bankruptcy court document, BCD 437, Disclosure Statement Describing Plan of Liquidation?” [24] The caller suggested the author read BCD 437, as there were things in it the author wouldn’t like, especially after being previously advised of a supposed ninety six cents to one dollar and six cents per dollar invested bankruptcy settlement rate.  The caller was correct. CMI investors had already been told that CMI stock was worth nothing, but on page  thirteen under the Bondholder Unsecured Claims, recovery of nine percent to thirty-six percent was stated on an estimated  $142,879,770.00.  Where had all the money gone? Didn’t Jack Ottinger state on March 18, 2008, that loan values exceeded the principal amount of the bonds?  On page twenty-two of this same document, it is stated that “of the $183,611,517 in scheduled real property assets, $116,477,319 (or sixty-three percent of the total listed real property assets) consists of interests in second priority mortgages.

What kind of businessmen were the CMI executives?  Did they understand anything about second mortgage loans, particularly that the first mortgage holder always is paid first?  What were they thinking when investing retirement funds in such risky ventures?  Where was the board of directors in all of this?  Didn’t they understand that they had a moral, legal, and fiduciary obligation to the investors to see that the principals knew what they were doing?

The web site of Christ Presbyterian Church in Sharpsburg, Georgia, includes a biography of the Rev. Jayme Sickert, [25] who was called as the church’s full time pastor in December 2010.  Part of one statement is interesting; “He…then went into the area of church finance.”  A more accurate statement would be that the pastor went into the area of assisting investors in losing $148 million in the Cornerstone Ministries Investments, Inc. bankruptcy.

And there is still unfinished business in the Presbyterian Church in America.

Part Three of this article will be published at a later date.


[6] Minutes of PCA General Assembly 1986 Pages 170-173 and Attachment B pages 261ff.

[16] Ibid.




Our Guest Editor Bob Wildrick is one of 3500 CMI investors still waiting to receive settlement proceeds from the February 200Chapter 11 bankruptcy of Cornerstone Ministries Investments, Inc., a.k.a. the “$140 million Ponzi scheme.”








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