BENTONVILLE -- Ecclesia College faces foreclosure on land at the center of a federal corruption investigation.
E.C. Funding LLC, a newly formed Rogers investment firm, filed a foreclosure lawsuit Thursday in Benton County Circuit Court against the private Christian college that seeks more that $1.8 million. The investment firm claims that Ecclesia defaulted on two loans for which a majority of the 240 acres it owns was put up as collateral, according to court documents.
"It may be a one day story," James Baxter, the attorney for E.C. Funding, said Thursday. "Today's Bank reached out to my client about a payoff amount. They are interested in helping Ecclesia out of the foreclosure."
Today's Bank is chartered in Huntsville and has 11 branches. Larry Olson, president and CEO of Today's Bank, did not immediately return a message left for him late Thursday afternoon.
Travis Story, an attorney representing Ecclesia, provided a statement from the college confirming a potential new loan.
"Earlier this summer E.C. Funding, LLC, a local group of investors in Rogers purchased our loans from Centennial Bank. Less than a week ago, we were informed that E.C. Funding, LLC would discontinue the normal annual practice of automatically renewing our loans," according to the statement. "However, in just four days we were able to find a local bank that will be refinancing all of Ecclesia's loans in the coming days."
Ecclesia took out loans of $1 million and $1.3 million in February 2014, when it was also seeking the state grants. The loans underwent several modifications over the years and were due Tuesday.
Filings that changed ownership of the mortgages from Centennial Bank to E.C. Funding were recorded May 18 with the county clerks in Benton and Washington counties.
Arkansas secretary of state records show E.C. Funding was incorporated on May 21 and lists Robert Powell McKinney as the lone officer.
Ecclesia has an outstanding balance of $1 million on the first loan and $855,218 on the second loan, according to the complaint.
The foreclosure lawsuit also names former Ecclesia College President Oren Paris III and Cari Paris as defendants.
Oren Paris resigned as college president April 3. He pleaded guilty the next day in federal court to paying kickbacks to former state lawmakers Jon Woods and Micah Neal in return for state grant money used to purchase some of the land sought in the foreclosure.
The kickbacks involve $550,000 of the more than $717,500 in state General Improvement Fund grants Ecclesia received from 2013 through 2014, the U.S. Department of Justice contends.
Duane "Dak" Kees, U.S. attorney for the Western District of Arkansas confirmed during court proceedings that the federal government has no method to recover any of the money, which was issued by the state.
The school said it used the state grant money to help purchase two parcels of land: Ecclesia purchased a tract at 4095 Arkansas 112 on Nov. 7, 2013, for $500,000; and a tract at 3870 Als Drive on Dec. 2, 2013, for $675,000. Both parcels are included in the foreclosure lawsuit.
Less than a year later the school was failing to raise enough money to cover expenses, said Seth Duell during April 13 testimony in Woods' corruption trial. Duell is the college's former professional fundraiser.
Ecclesia had no record of any donations greater than $15,000 when he came on board, Duell testified. The college's enrollment was too small to cover its expenses with tuition, he testified.
A jury found Woods guilty of money laundering, wire and mail fraud and conspiracy in May. Neal pleaded guilty in January 2017 to a conspiracy charge.
Also convicted in May was Randell Shelton Jr., a consultant formerly of Alma. Federal prosecutors argued during trial that Paris disguised the kickbacks as consulting fees to Shelton, who then passed money along to the former legislators.
The four men will be sentenced in the next two weeks.
Metro on 08/31/2018
Print Headline: Foreclosure seeks land bought by Arkansas college linked to corruption case