BAA and the Bryants gave an appraisal of the property of $9,090,000, according to the suit. “A subsequent IRS analysis of the BAA Appraisal noted that the appraisers were biased and had produced an appraisal to fit the needs of Welfont,” said Godley.
Rock Hill North Carolina sold the property to the charity for $1,500,000 on Aug. 4, 2017, and took a deduction on its 2017, 2018, 2019, and 2020 tax returns. On Aug. 4, 2017, Rock Hill Texas, which Godley alleges “is affiliated with and/or the alter ego of Welfont,” purchased the property for $1,750,000.
The IRS audited Rock Hill North Carolina and Godley’s tax returns and determined that there had not been a legitimate qualified appraisal; the agency also invalidated the deductions. “Rock Hill NC will suffer actual damages in the amount of at least $3,690,494.13 in tax deficiencies, interest, and continuing penalties that Rock Hill NC and Godley will be required to pay to the IRS,” the suit stated.
An amended complaint in the Godley case filed on June 18 adds “Sean Marcel” and Joseph Johnson as defendants. “Defendants Johnson and Marcel were senior corporate officers of Welfont who exercised substantial control over its operations and policies concerning the promotion of so-called ‘bargain sales,’” said the complaint.
In a court document filed in the Godley case on Oct. 27, the plaintiffs asked the court “to take judicial notice of other instances of similar conduct by Welfont and many of the other defendants named herein.” They went on to list and summarize the J&A, Sterling, Gibbs, and AMPCO lawsuits, noting that the Gibbs case also took place in South Carolina.
“All the cases either resulted in judgments against the defendants or [voluntary] dismissals close to the proposed trial dates which normally suggests that a settlement was reached,” said the filing.
The latest filing in the Godley case as of this writing was issued on Nov. 13. In it, Welfont seeks to dismiss the case, arguing that Godley’s argument “remains speculative, conclusory, and legally insufficient.”
“The alleged injuries flow from an unsuccessful tax strategy…not from actionable conduct by the Welfont Defendants,” said the defendants.
Dr. Joseph Johnson’s Statement to ChurchLeaders
In a lengthy statement to ChurchLeaders, Dr. Joseph Johnson pointed out that the previously mentioned lawsuits have nothing to do with Life Surge. “While this is not a Life Surge issue, Life Surge stands firmly with Johnson as he continues to successfully defend these factually unsupported claims,” the statement said.
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“Welfont, Johnson, and/or Marcell have been wrongly targeted and are innocent,” said Johnson. He blamed appraisers of the bargain-sale properties for the value discrepancies.
“All cases stem from the same issue: the valuations in the appraisals conducted by a specific appraisal group retained by the ‘sellers’ in these transactions,” he said. “Neither the sellers nor this appraisal group were clients of Welfont and had no business or personal relationship with Johnson or Marcell.”
Johnson also denied the lawsuits’ allegations that he and/or Welfont had created a network of businesses and charities to conduct bargain sale transactions, and he denied setting up the property appraisals.
“Welfont represented nonprofit buyers in these real estate transactions. It didn’t represent the sellers. It didn’t conduct appraisals. It didn’t determine property values,” Johnson said. “The sellers in these transactions—experienced and sophisticated business owners—were responsible for hiring their own certified appraisers to value their properties.”
